If your business has employees, it’s important to have a thorough understanding of managing your payroll. By law, you must ensure you are paying your employees correctly plus following all the requirements regarding paperwork and record keeping.
A common question asked by small and medium business owners, is what the requirements regarding payslips are? Pay slips are used for record keeping and reporting for both employees and employers. For employees, a payslip ensures they have received the correct pay and entitlements. For employers, it helps to keep accurate and complete records.
- Am I obligated to issue a payslip to all employees?
- What information is included on a payslip?
- Should payslips be issued as a hard copy or electronically?
Am I obligated to issue a payslip to all employees?
Pay slips must be issued to each employee within one working day of pay day, even if an employee is on leave. They can be issued in electronic form or hard copy. Payslips should be legible and be written in plain and simple English. The Fair Work Act 2009 prohibits a person from making or keeping employee records, or giving pay slips, which they know are false or misleading.
What information is included on a payslip?
Pay slips must cover details of an employee’s pay for each pay period. Most payroll software will create an employee’s payslip based on the information entered. A payslip should include
- employer’s and employee’s name
- employer’s Australian Business Number (if applicable)
- pay period
- date of payment
- gross and net pay
- if the employee is paid an hourly rate- the ordinary hourly rate, the number of hours worked at that rate and the total dollar amount of pay at that rate.
- any loadings (including casual loading), allowances, bonuses, incentive-based payments, penalty rates or other separately identifiable entitlement paid that can be separated out from an employee’s ordinary hourly rate. A note could be included on a payslip 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 details of each deduction and the name, or name and number of the fund / account the deduction 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 contributions that need to be made) and the name, or the name and number, of the superannuation fund the contributions were made to.
Should payslips be issued as a hard copy or electronically?
Payslips can be issued to employees as a hard copy or electronically. Either way, they must both show the same information, be formatted so they are easy to read and be issued securely and confidentially. If sent electronically, employers should also ensure employees can print their electronic payslips in private.
Bookkeeping Matters in Adelaide can manage the payroll requirements for your small or medium business including Single Touch Payroll (STP) reporting.
At Bookkeeping Matters, we are in business because we’re driven to see yours succeed. We genuinely want the best for you and will go above and beyond to bring order to your finances, so you can spend time on the things that matter most.
Find out more about how we can help you by calling June on 0423 003 552.
Disclaimer: The information in this article is general information only.