Are your payslips compliant?
Employing staff is serious business with many responsibilities between employer and employee. One of them is the issuing of payslips. It may seem like a simple little thing, but there are specific rules regarding payslips and not complying can lead to serious consequences under the Fair Work legislation.
What information should be on payslips?
Employees must be provided with their payslip within one working day of their pay day, either in hard copy or electronically, even if that employee is on leave.
- The name of the employer. E.g. XYZ Pty Ltd, trading as XYZ Café.
- The employer’s Australian Business Number (ABN).
- The employee’s name.
- Date of payment.
- The pay period. E.g. xx/xx/20xx to xx/xx/20xx.
- The gross and net amounts of pay.
- Any loadings, allowances, bonuses, incentive-based payments, penalty rates or other entitlements paid that can be singled out, must be shown separately.
- If the employee is paid on salary, the rate as at the last day in the pay period must be shown.
- Any deductions made from the employee’s pay, including the amount and details of each deduction (including superannuation) including the name, or the name and number, of the fund or account the deductions are paid into.
- If you are required to pay superannuation contributions for your employee’s benefit, you should include: The amount of each superannuation contribution made during the period to which the payslip relates, or the amounts of contributions that you are liable to make; and the name or the name and number of the superannuation fund you put or will put superannuation contributions into.
Deductions on payslips
Generally speaking, an employer is allowed to make a deduction from an employee’s pay if:
- The employee agreed in writing and the deduction is principally for the employee’s benefit, or
- The employee authorised the deduction in accordance with an enterprise agreement; or
- The deduction is authorised by or under an award or an order of Fair Work Australia; or
- The deduction is authorised by or under a law or an order of a court.
However, an employer generally cannot make a deduction from an employee’s pay even if it is authorised by an award or an enterprise agreement if:
- The deduction is for the benefit of the employer or a party related to the employer and is unreasonable in the circumstances, or
- If the employee is under 18 years of age and the employee’s guardian or parent hasn’t authorised the deduction in writing.
Fair Work Inspectors can issue employers an infringement notice for failing to meet payslip and record keeping requirements. This is an alternative to taking employers to court. However, if an employer’s failure to meet the requirements is serious, wilful or repetitive, Fair Work Inspectors may take the employer to court.
Electronic payslips must list the same information as hard copy payslips. Employers must:
- Give electronic payslips to each worker via email or into an electronic personal account, etc. rather than simply storing them on a company database. They must be delivered securely and confidentially.
- Issue payslips in an easily printable format. E.g. PDF.
- Ensure that workers can access and print their payslips in private (e.g. it would be inappropriate to issue an electronic payslip to a factory worker who doesn’t have access to a computer terminal to privately read and print their payslips).
As you can see, payslips are an important part of your record keeping requirements, and your employee/employer relationship. It’s not good enough to scribble something on a piece of paper and hand to your employee, or give them nothing at all. With the end of financial year coming up, take the time to review your systems and make sure your payslips are compliant!