Payslips: Fair Work are auditing & compliance is critical!
Incomplete and incorrect payslips are still one of the most common problems identified by Fair Work Inspectors during workplace audits.
It’s absolutely vital your payslips meet the current legal requirements because Fair Work Inspectors have the power to issue you with on-the-spot infringement notices for failing to meet your record keeping and payslip obligations under the Fair Work Act 2009.
An infringement notice can be issued within 12 months from the day the contravention(s) is alleged to have occurred. Generally, you’ll have just 28 days to pay the penalty shown on the infringement notice. The maximum infringement notice penalties are:
- For an individual: $510 per breach
- For your business: $2,550 per breach.
If your failure to meet the legal obligations appears serious, willful or repetitive, Fair Work Inspectors can recommend you be taken to court.
To help you avoid costly penalties and damaging court action, make sure you comply with all of the following minimum payslip requirements:
- Issue payslips to employees within one working day of the payment being processed. Even if an employee is on leave, you’re still required to issue them with a payslip.
- Payslips can either be in hard copy or electronic form. The same mandatory information must be included regardless of how you produce the payslip.
- The following information must be included on your payslips:
- The name of your business and the employee’s name
- Your Australian Business Number (if applicable)
- The start and end date of the relevant pay period
- The date the payment is being made
- The gross and net payment amounts
- If the employee is paid an hourly rate, the payslip must show the employee’s ‘ordinary hourly rate’ (generally the rate excluding loadings, penalties, and allowances), the number of hours worked at that rate, and the total dollar amount of pay at that rate
- All loadings (such as the casual loading), allowances, bonuses, incentive-based payments, penalty rates, or other paid entitlements that can be separated out from an employee’s ordinary hourly rate
- If the employee is paid an annual rate of pay, the rate as of the latest date to which the payslip relates
- All deductions taken 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
Remember that deductions which are not permitted by law should never be made from an employee’s pay.
- All superannuation contributions paid for the employee’s benefit
- The amount of super 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 (or will be) sent to.
- Lastly, it’s worth noting that leave balances don’t need to be shown on an employee’s payslip. However, it’s a good idea – and consistent with best practice – to show them because this allows employees to keep track of leave balances and can make dealing with leave requests easier.
Take the time to double check your payslips now to avoid serious problems down the track!
By David Bates
Originally published, April 10 2015 for the ADPInsider