Are You Required to Give Your Employee a Payslip?

As an employer, you may be wondering whether or not you need to give your employees a payslip when they receive your pay. It is now more common for employers to issue payslips electronically and via email, rather than as a hard copy the old-fashioned way. Therefore, it is important to ensure that payslips are correct every time you issue your pay to employees, as you may be easier to forget to check over an electronic email than a physical document. By law, you must give your employees a payslip.

At the end of the financial year (30 June), employers must also give employees a PAYG (Pay As You Go) summary. This payment summary is an extra payslip that the Australian Taxation Office requires, and it records your full year’s worth of pay to your employee. If your employee’s PAYG withholding payment summary is missing or lost, they should request a copy from you. This article sets out key information about how employers must give payslips and what a payslip must include.

How Employers Must Give Payslips

All employees should receive a payslip, either electronically or in printed form, within one working day of receiving pay. If you pay your employees electronically, you need to send it via email or into a personal account.

Moreover, the employer should issue the payslip in a manner that the employee can easily access.

What a Payslip Must Include

A payslip must include the following information:

• the amount of pay, both gross (before tax) and net (after tax);
• the date of receiving the pay;
• the pay period;
• any loadings, bonuses or penalty rate entitlements;
• deductions;
• superannuation contributions including the name of the super fund;
• the employer’s name and ABN if they have one; and
• the employee’s name.

If you pay your employees at an hourly rate, the payslip should also contain the employee’s ordinary hourly rate and how many hours they worked at that rate. If an employee is paid an annual salary, the rate should be as on the last day of the pay period. Wages cannot be deducted unless there has been written consent or is required by law. These deductions include tax, superannuation and court-ordered deductions.

Most modern accounting systems, including MYOB and Xero, also include leave balances on payslips. While this is not a legal requirement, it is best practice to include the balance on each payslip.

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Further Employer Obligations

The Fair Work Act, as well as any relevant state legislation, are the legal foundations for your employer’s obligations regarding payslips. These employer obligations include issuing payslips to your employees within one day of receiving pay in a confidential manner suitable for their employment. In addition to payslips, employers must also record any leave taken by a worker and the balance of leave which they have not taken.

The Fair Work Ombudsman (FWO) may conduct inspections and fine employers for failing to meet the requirements for issuing correct payslips or keeping the right records. In 2014, the FWO announced plans to visit over 350 businesses across Australia to inspect payslips and record keeping processes.

Therefore, you must do your due diligence when you are issuing payslips and pay particular attention to ensuring that you are paying any loadings, bonuses or penalty rates as well as your normal tax and superannuation obligations. The Fair Work Commission can apply additional penalties of up to $63,000 per breach of your relevant modern award.

Key Takeaways

Payslips are an important employee record that an employer must provide either electronically or in hard copy. You must provide payslips at least one business day after payday.

If you are an employer and have any questions about issuing payslips or record keeping, call LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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