If you employ people in Australia, your payroll produces two overlapping sets of obligations. One is tax-facing: what you withhold under pay as you go (PAYG) withholding and the records that support it, administered by the Australian Taxation Office (ATO). The other is workplace-facing: the employee records and pay slips required under the Fair Work system, administered by the Fair Work Ombudsman (FWO).
They come from different laws and exist for different reasons, but they draw on the same underlying data. This guide separates the two, shows where they meet, and flags the specifics you need to confirm directly with the ATO and the Fair Work Ombudsman before you rely on them.
Two obligations, one payroll system
The ATO's concern is that the right amount of tax is withheld, reported and paid, and that the records behind those figures can be checked. Its guidance on employment and payroll records sits within its business record-keeping material and covers records of wages, allowances and other payments made to workers.
The Fair Work Ombudsman's concern is different. According to its fact sheet on record-keeping and pay slips, these obligations are designed to ensure that employees receive their correct wages and entitlements. That is an employee-protection purpose, not a revenue purpose.
The practical consequence is that one payroll system has to satisfy two audiences. A record set that is adequate for your activity statement may still fall short of what the Fair Work Ombudsman expects, and vice versa.
PAYG withholding records
The ATO treats PAYG withholding record-keeping as its own topic. Its employment and payroll records guidance states that record-keeping requirements for PAYG withholding are covered in "Pay as you go (PAYG) records". Treat that ATO guidance as the controlling reference for what to keep and for how long, rather than relying on a summary like this one.
What the broader employment and payroll records page does establish is that employers need records of wages, allowances and other payments made to workers. Allowances and irregular payments are the usual weak point, because they often sit outside the standard pay run and are recorded informally.
A practical reading: withholding records are only useful if they reconcile. The amounts you withhold should tie back to the wages and allowances actually paid, and then to what you report and pay. Most problems surface as mismatches between those three figures, not as missing documents.
Super fund choice records
The ATO's employment and payroll records guidance separates employees into two groups for super records. For employees who are eligible to choose which super fund they want you to pay into, you need to keep one set of records. For employees who are not eligible to choose their fund, you need to keep records of something different.
This article deliberately does not list those items, because eligibility rules and the specific records attached to each group are exactly the kind of detail that changes. Read the ATO page directly and separate your super records by employee eligibility, rather than keeping one undifferentiated file.
Employee records and pay slips under Fair Work
The Fair Work Ombudsman's position is broad: employers must make and keep accurate and complete records for all of their employees, including employees on an annual wage or salary. The examples given include time worked and wages paid.
Two points deserve emphasis.
First, "all of their employees" includes salaried staff. A common gap is timekeeping that only covers hourly or shift workers. Under the FWO framing, employees on an annual wage or salary are expressly within scope, so time and attendance records for salaried staff cannot simply be assumed unnecessary.
Second, pay slips are a distinct obligation, not a by-product of paying someone correctly. The FWO publishes a fact sheet on record-keeping and pay slip requirements; that fact sheet is the place to confirm what a pay slip must contain, when it must be given, and in what form. The detail matters and should be read at source.
Why the records matter in a dispute
This is the most consequential point for anyone deciding how much effort to put into record-keeping.
According to the Fair Work Ombudsman, if the person bringing a claim shows that the employer did not comply with the record-keeping and/or pay slip requirement, the employer will be required to disprove the person's wage-related allegation in court.
In plain terms: non-compliance can shift the burden of proof onto you. Instead of the claimant having to prove what they are owed, you may have to disprove it. At that point your exposure depends on whatever other evidence you happen to have, which is a far weaker position than contemporaneous records made in the ordinary course of business.
That is the argument for treating records as a control function rather than an administrative chore.
Settled points, interpretation, and what you should verify
| Area | What the sources state | What you should verify |
|---|---|---|
| PAYG withholding records | Requirements are set out in the ATO's "Pay as you go (PAYG) records" guidance | The full list of required records, retention periods, and any rules on electronic storage |
| Employment and payroll records | ATO guidance covers records of wages, allowances and other payments made to workers | How allowances, bonuses and irregular payments should be recorded for your situation |
| Super fund records | ATO requires different records depending on whether the employee can choose their fund | Which of your employees are eligible to choose, and the specific records for each group |
| Employee records | FWO requires accurate and complete records for all employees, including those on an annual wage or salary | What "complete" means for time records in your industry and for your employment arrangements |
| Pay slips | FWO publishes a fact sheet on record-keeping and pay slip requirements | Required content, timing and format, and any award or agreement rules that add to it |
| Non-compliance | FWO states the employer must disprove a wage-related allegation where record-keeping or pay slip requirements were not met | The current wording, and whether any exceptions or defences apply |
A practical checklist for setting up or reviewing payroll
- Confirm which workers are employees rather than contractors, since worker classification drives whether these obligations apply at all.
- Keep one authoritative payroll record set that can produce both ATO-relevant and Fair Work-relevant outputs, rather than two reconciled-by-hand versions.
- Record time worked for salaried employees, not only for hourly and shift staff.
- Keep super records separated by whether the employee is eligible to choose their fund.
- Capture allowances and one-off payments in the same system as ordinary wages, not in side spreadsheets or email trails.
- Issue pay slips in the form and at the timing the FWO requires.
- Store records so they stay complete and retrievable for the whole period you are required to keep them.
- Periodically reconcile amounts withheld against wages paid and against what you report and pay.
Next steps
- Read the ATO's employment and payroll records page, then its "Pay as you go (PAYG) records" guidance, and list every record type named.
- Read the Fair Work Ombudsman's fact sheet on record-keeping and pay slips for the pay slip requirements specifically.
- Map your current payroll output against both lists and note the gaps, paying particular attention to salaried time records and super records.
- Fix storage and retrieval before you fix anything else — a record you cannot produce is functionally the same as a record you never made.
- If you are facing an actual dispute, an audit, or an unusual employment arrangement, get help from a registered tax agent, a payroll professional, or an employment lawyer, or contact the ATO and the Fair Work Ombudsman directly.
General information only. This article is general information about Australian payroll record-keeping. It is not legal, tax, accounting or financial advice, and it does not account for your industry, the award or agreement covering your staff, your employment arrangements, or your circumstances. Obligations can differ between businesses and change over time. Confirm the current requirements with the Australian Taxation Office and the Fair Work Ombudsman, or with a qualified adviser, before acting. Australian Ltd is an independent information publisher and is not a lender, broker, employer of record, government body or regulator.