A basic guide to Payslips
Do I need to give my employees a pay slip?
The Fair Work Act 2009 (Cth) (FW Act) makes it a legal requirement to give your employees a pay slip within one (1) working day of paying an amount to an employee in relation to the performance of work.
Employers must also keep employee records, in accordance with the Fair Work Regulations 2009 (Cth) (Regulations) for a period of at lease seven (7) years. This includes copies of pay slips.
How must a pay slip be given?
In accordance with a pay slip must be issued in either hard copy or in electronic form. However issued, the pay slip must be given to an employee in a confidential manner, suitable to their employment and in a way where an employee can easily access the pay slip. Access is particularly relevant for employees who are in remote locations and perhaps do not have ready access to the internet where a hard copy pay slip may be more appropriate.
Where electronic pay slips are issued, employers should ensure the pay slip is provided to a secure email address nominated by employee, to a personal account or via a platform where can be downloaded and retained by the employee post-employment.
What must a pay slip include?
A pay slip must be in the form proscribed by the Regulations and include any information proscribed by the Regulations.
All pay slips must, at a minimum, include the following:
- the employer’s name; and
- the employer’s ABN; and
- the employee’s name; and
- the period to which the pay slip relates; and
- the date on which the payment to which the pay slip relates was made; and
- the gross amount of the payment; and
- the net amount of the payment; and
- any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement.
For employees paid an hourly rate, the pay slip must also include:
- the rate of pay for the employee’s ordinary hours (however described); and
- the number of hours in that period for which the employee was employed at that rate; and
- the amount of the payment made at that rate.
For employees paid an annual salary, the pay slip must also include the rate as at the latest date to which the payment relates.
Superannuation contributions must also be recorded in accordance with the Regulations.
Most importantly, an employer must not give an employee a pay slip that the employer knows is false or misleading.
Breaches of the pay slip provisions of the FW Act and Regulations could result in the imposition of civil penalties against the employer. Further, there is a risk that is an employer fails to comply with the FW Act and an employee makes a claim or the issue is investigated, the employer may bear the burden of disproving allegations in proceedings relating to a contravention of certain civil remedy provisions.
From a business perspective, provision of pay slips ensures transparent accounting an promotes trust between employers and employees. They can also assist in ensuring mistakes in pay are quickly identified and rectified.
If you require assistance, Adams & Partners Employment Law Team can help you. Contact us on (02) 4721 6200.
Written by Amelia Hatton.