Why are payslips provided?
Pay slips ensure that employees receive the correct pay and entitlements and help employers keep accurate and complete records.
When should pay slips be given
Pay slips have to be given to an employee within one (1) day of pay day, even if an employee is on leave.
How pay slips should be given
Pay slips have to be in either electronic form or hard copy. Electronic pay slips must have the same information as paper pay slips.
What a pay slip should have on it
Pay slips have to cover details of an employee’s pay for the period. Below is a list to include:
- Employer’s and employee’s name;
- Employer’s Australian Business Number and name (if applicable);
- Pay period;
- Day of payment;
- Gross and nett pay;
- If the employee is paid an hourly rate;
- The ordinary hourly rate;
- The number of hours worked at that rate;
- The total dollar amount of pay at that rate;
- Any loadings (including casual loading), allowances, bonuses, incentive-based payments, penalty rates or other paid entitlements that can be separated out from an employees ordinary rate. (For Example, a note could be included on a pay slip that the hourly rate incorporates the relevant casual loading);
- The pay rate that applied on the last day of employment;
- Any deductions from the employee’s pay, including;
- The amount and detail of each deduction;
- The name, or name and number, of the fund / the account was paid into;
- Any superannuation contributions paid for the employee’s benefit, including;
- The amount of contributions made during the pay period (or the amount of the contributions that the employer intends to make);
- The name, or name and number, of the superannuation fund the contributions were (or will be) made to.
When an employer is required to give a new employee a play slip within 14 days of their first pay day, they do not have to include the superannuation fund name and number if:
- The employee has not notified the employer of their choice of superannuation fund; or
- The employer has been unable to obtain the employee’s stapled superannuation fund details from the Australian Taxation Office (ATO).
Leave balances on pay slips
While it is best practice, to show an employee’s leave balances on their pay slip, it is not a requirement.
Leave that can be shown on a pay slip includes:
- Annual leave;
- Personal (sick) /carer’s leave; and
- Long service leave.
Employers do need to tell employees their leave balances if they ask.
Paid family and domestic violence leave on pay slips
There are rules about information about paid family and domestic violence leave must be reported on pay slips and what information must not be included. This is to reduce the risk to an employee’s safety when assessing paid family and domestic violence leave.
Employers need to keep a record of leave balances and leave taken by employees. However, pay slips must not mention paid family and domestic violence leave, including any leave taken and leave balances.
From 4 February 2023, an amount paid to an employee for taking paid family and domestic violence leave as to be recorded on a pay slip as;
- Ordinary hours of work; or
- Another kind of payment for performing work, such as an allowance, bonus, or overtime payment.
If an employee has taken a period of paid family and domestic violence leave, it is best practice for their employer to record this on their pay slip in a way that makes the pay slip look as close as possible to how it would have looked if the employee had not taken the leave.
Transitional Arrangements
Until 4 June 2023, a period of paid family and domestic violence leave can be recorded on a pay slip as an amount paid taking another type of leave (for example, other leave).
This grace period is intended to give employers time to update payroll systems to comply with the requirement to report paid family and domestic violence leave on pay slips as ordinary hours or another kind of payment for performing work.
Record Keeping
Time and Wages Records
Employers have to keep time and wages records for 7 years.
Time and wages records must be:
- Readily accessible to a Fair Work Inspector (FWI);
- Legible; and
- In English.
Time and wages records cannot be:
- Changed unless the change is correct an error; or
- False and misleading.
What records have to be kept and what needs to be in them?
Certain information needs to be kept for each employee. If an employee is paid an annual wage under an award, employers are required to keep extra records for these employees e.g., where salaries are annualised.
Here is a list of the records that an employer has to keep and what information has to be in the record.
General
- Employer’s and employee’s name;
- Employer’s ABN (if any) and business name;
- Employee’s commencement date;
- Whether the employee is full-time; part-time; or casual; and
- Whether the employee is permanent or temporary.
Pay
- Pay rate paid to the employee;
- Gross and nett amounts paid;
- Any deductions from the gross amount;
- Details of any incentive-based payment, bonus, loading, penalty rate, or other monetary allowance or separately identifiable entitlement paid.
Hours of Work
- any penalty rates or loading paid for overtime hours worked, including;
- the number of overtime hours worked by an employee during the day;
- when the employee started and finished overtime hours;
- the hours an employee works if the employee is a casual or irregular part-time employee who is paid based on time worked;
- a copy of the written agreement if an employer and employee have agreed to an averaging of the employee’s hours.
Leave
- any leave taken; and
- how much leave an employee has.
If an employee is able to cash out annual leave, the employer has to keep;
- a copy of the agreement to cash out the amount of leave; and
- a record of how much was paid, the amount of leave cashed out and when payment was made.
Under an award, if an employer agrees for an employee to take annual leave in advance, the employer has to keep a copy of the agreement. The agreement has to state the amount of leave taken and the date the leave started.
Superannuation Contributions
- amount paid;
- pay period;
- date(s) paid;
- name of super fund; and
- reason the employer paid into the fund (E.g. a record of the employee’s super fund choice and the date they made that choice).
If employers pay a defined benefit interest into a defined benefit fund, employers do not have to include these contributions in the record.
Individual Flexibility Agreements
If an employer and employee agree to an individual flexibility agreement under an award or registered agreement., a record must include both:
- a copy of the written agreement; and
- a copy of any notice or agreement to terminate the flexibility agreement.
Guarantee of Annual Earnings
- the guarantee; and
- the date the guarantee was cancelled (where applicable).
Ending Employment
- how the employment was terminated e.g., by agreement; summarily, or in some other way (specify the details);
- If notice was provided and, if so, how much; and
- The name of the person who terminated the employment.
Transfer of Business
Where there has been a transfer of business, the old employer has to give the new employer records of any transferring employee. The new employee also has to ask for employment records from the old employer for any employee who becomes an employee within three (3) months of the sale.
For any further information or assistance please contact the office on 0412 587 577.
