Payroll Record Keeping: Why It Matters More Than Ever

If you employ staff, now is the time to review and verify your payroll records. The Fair Work Ombudsman (FWO) has been conducting unannounced spot checks across six major cities to ensure businesses are meeting their legal obligations. The focus? Proper record-keeping.

Spot Checks Are Happening

The FWO recently visited around 50 small businesses in Sydney, Melbourne, Perth, Hobart, Adelaide, and Cairns. Inspectors targeted retailers and service-based businesses such as:

• Butchers

• Florists

• Bakeries

• Phone repair shops

• Beauty salons

• Car washes

These businesses often employ younger workers or people from migrant backgrounds - workers who may not fully understand their rights or feel confident raising concerns.

Inspectors reviewed pay slips, timesheets, and whether employees were given the Fair Work Information Statement and the Casual Employment Information Statement. When records were missing or incomplete, employers were hit with on-the-spot fines -ranging from $1,878 for individuals to $9,390 for companies.

This isn’t about punishing honest mistakes. The FWO is focused on protecting vulnerable workers and ensuring all businesses play by the rules.

Why Good Records Matter

Missing or poor records are often a red flag for underpayment or broader compliance issues. In the last financial year alone, the FWO issued 760 fines, totalling nearly $1 million.

Beyond compliance, good record-keeping protects your business. It makes payroll simpler, audits less stressful, and helps you quickly resolve any disputes or errors.

What Records Must Employers Keep?

If you have employees, you’re required by law to keep specific records, including:

• Employee details (name, start date, employment type)

• Pay rates and amounts paid

• Hours worked (including overtime)

• Deductions and allowances

• Leave balances and leave taken

• Superannuation contributions

• Copies of agreements (e.g. leave in advance, flexible work)

• Termination details if employment ends

These records must be:

• Kept for at least 7 years

• Accurate and up to date

• Readable and in English

• Confidential, but available to the employee upon request

Falsifying records is illegal, and even accidental non-compliance can lead to significant penalties.

The Role of a Bookkeeper

A professional bookkeeper can take the guesswork out of compliance.

They’ll help you:

• Set up reliable systems for timesheets, pay runs, leave, and super

• Identify gaps in your current processes

• Ensure the correct statements are provided to new employees

• Keep records properly stored and accessible

• Rectify past errors without compounding the problem

With a bookkeeper on your team, you can feel confident that your records are accurate, your systems are solid, and you're ready if Fair Work comes knocking.

Payroll Record Keeping Resources from Fair Work

The FWO offers free templates, checklists, and online training to help small businesses stay compliant:

• Record-keeping and payslip templates

• Small Business Showcase

• Free online learning centre

• Record My Hours app (for employees)

Need support or have questions? Visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94. Interpreters are available on 13 14 50.

Need help with your payroll compliance?

We help small business owners stay compliant and confident. Get in touch to find out how we can support you with stress-free record-keeping and payroll.