Why Payroll Records Are Important for Businesses?

Why Payroll Records Are Important for Businesses?

Table of content

  1. What are payroll records?
  2. What payroll records must be kept?
  3. How long to keep payroll records?
  4. What can happen if payroll records are not kept?
  5. How can Workstem help on your record keeping?

What are payroll records?

Payroll records are the collection of payroll-related paperwork that companies are required to keep on file for each employee. This covers pay scales, overall remuneration, tax deductions, number of hours worked, and more.

What payroll records must be kept?

Information your records need to show:

  • payments of your employees
  • salaries and wages
  • bonuses
  • allowances or other kinds of payments
  • tips and gratuities (you need to show what amounts have been paid to your employees and what you retain)
  • termination payments
  • redundancy payments
  • leave payments

Examples of types of records:

  • Tax file number declarations or employee tax details summary printout from ATO online services
  • Withholding declarations, including withholding variation notices, you obtain from employees
  • Worker payment records
  • Records of wages, allowances and other payments made to workers
  • Single Touch Payroll reports
  • Records of payments made to all payees
  • Payment summaries or income statements
  • Reconciliation of daily sales and cash payments book, if paying wages in cash

How long to keep payroll records?

You need to keep these records for five years. The five years starts from when you prepared or obtained the records, completed the transactions or acts those records relate to, whichever is later.

You should keep records long enough to cover the period of review (also known as the amendment period) for an assessment that uses information from the record. For records connected to an assessment that’s amended, the period of review for that amended assessment starts from the day after we give you the notice of amended assessment.

What can happen if payroll records are not kept?

If payroll records aren’t kept or are incorrect, FWIs can give employers a fine, called an infringement notice.

It is unlawful for employers to make or keep employment records that they know are false or misleading.Employers can also be penalised if we choose to take a matter to court. In some cases employers who haven’t kept records or made records available for inspection may have to prove to a court they didn’t underpay an employee.

How can Workstem help on your record keeping?

Workstem is a one-stop payroll & HR platform with an award interpretation module hat ensures employers stay compliant with Fair Work. Meanwhile, the clock in/out data, timesheets, leave applications and payroll records will be automatically synchronised to the cloud. The platform simplifies HR processes, reduces administrative burdens, and offers a user-friendly interface for small businesses and large enterprises alike.

The automated payroll processing helps businesses generate payslips and reports without the need for complex Excel spreadsheets, and reduces the unnecessary administrative burdens. Our STP reporting feature also enables businesses to comply with ATO requirements, while the auto-generation of ABA files allows employees to self check and download payslips on App anytime, anywhere.

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