Keeping employment and contractor records is an essential part of running your business and helps you to claim all your deductions.
All employee and contractor records must be kept for five years. Records may be paper or electronic and must be in English.
If you decide to keep records electronically, you may want to consider Standard Business Reporting (SBR) enabled software. SBR is a standard approach to online or digital record keeping that simplifies business reporting obligations. Talk to your adviser or software provider to find out more.
For employees and contractors, you need to keep:
- copies of tax file number declarations and withholding declarations
- copies of any contracts you have with contractors
- records of wages, allowances and other payments made to workers
- copies of payments and reports provided to the ATO
- copies of payment summaries.
You must keep records showing:
- how you calculated the amount of super you contributed for each employee
- that you've met your choice of super fund obligations.
If you make super contributions under an award or employment agreement, you may have additional record keeping obligations. Check your relevant award or regulation.
Fringe benefits tax
You must keep records that are adequate to assess your fringe benefits tax (FBT) liability. Your records need to show:
- the taxable value of each fringe benefit provided to each employee and how it was determined
- the justification of claims for exemptions or concessions that reduce your FBT liability
- the fringe benefits provided by an associate (that associate is required to supply these records within 21 days of the end of the FBT year).
Keeping employment and contractor records is an essential part of running your business and helps you to claim all your deductions. You must keep your records in an accessible form (either printed or electronic) for five years.