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  • Employees

    As a business operator, you have four main record keeping obligations when it comes to your employees:

    You can maintain your payroll records using manual systems, such as wages books. However, many commercially available software packages will calculate payroll, tax, super and other amounts automatically.

    Payments to employees

    When you pay your employees' salaries, wages, bonuses, allowances or other kinds of payments, including tips and gratuities, your records must reflect those payments.

    If you pay wages with cash, record this in your reconciliation of daily sales and cash payments book.

    If your employees receive tips and gratuities we recommend you develop and apply a written policy to deal with, at a minimum, how you:

    • collect and record tips you receive from customers
    • distribute tips to your staff (and how often)
    • will resolve any disputes about the policy.

    To meet your record keeping requirements, you must keep records that show what tips have been paid to your employees and contractors and what tips you retain.

    PAYG withholding

    Under the PAYG withholding system, you must withhold amounts from payments such as:

    • salary, wages, commissions, bonuses and allowances paid to employees
    • remuneration to company directors
    • retirement payments, termination of employment payments, annuities and benefit or compensation payments.

    Your records, whether they are manual or electronic, must record the amounts withheld.

    You will then report wages amounts on your activity statement and pay the withheld amounts to us.

    For PAYG withholding purposes you must keep:

    • Tax file number declarations (send one copy to us) and Withholding declarations, including withholding variation notices, you obtain from employees
    • worker payment records
    • payment summaries or income statements for employees
    • annual reports of amounts you have withheld.

    If you lodge your annual report using paper forms, include the original of each payment summary with your report.

    See also:


    You must make super contributions to the correct super fund, by the cut-off dates, for all your eligible employees.

    You must keep records that adequately explain your super transactions, including:

    • how you worked out the amount of super you contributed for each employee
    • factors that affect the amount of super you must contribute, such as advice you have received from trustees about the funds to which you contribute.

    If you fail to meet your super obligations and are liable to pay the super guarantee charge, you must also keep details of how you worked out the amounts shown in your super guarantee charge statement.

    If you make super contributions under an award or employment agreement, this may impose additional record keeping obligations, so check your relevant award or regulation.

    Correct super fund

    Most employees can choose which super fund they want you to pay into. You will need to determine if they are eligible to choose:

    • If they are eligible, provide them with a Standard choice form. You will need to keep records showing that you have offered eligible employees the choice (for example, you may issue this form by email and retain copies of the emails)
    • If they are not eligible, keep records of why employees have not been offered a choice.

    Find out about:

    Other records you will need to keep include:

    • records confirming that the super fund meets specific requirements and obligations under super law
    • completed Standard choice forms
    • written information provided by an employee nominating their chosen fund or retirement savings account
    • receipts or other documents issued by the super funds showing that you have made super contributions for employees to their chosen fund.

    Find out about:

    • Record keeping, where to pay super contributions and claiming a tax deduction by visiting Super for employers.

    Fringe benefits tax

    A fringe benefit is a non-cash benefit (such as private use of a company car) that you provide to an employee because that person is an employee. Benefits can be provided by you, your associate or by a third party under an arrangement with you.

    'Employee' can refer to a current, future or former employee. You must obtain all employee declarations no later than the day your FBT return is due to be lodged with us; or, if you don’t have to lodge a return, no later than 21 May.

    You need to keep records that show:

    • the taxable value of the fringe benefits
    • where an associate has provided a fringe benefit
    • if any exemptions or concessions apply.

    Find out about:

    Last modified: 11 Jul 2019QC 43040