Payroll records are essential for any business. It’s crucial to ensure that your employee’s information is accurate and up-to-date, including wage and salary details, deductions, leave entitlements, superannuation contributions, and other payments. But how long should you keep payroll records? In this blog post, we will answer this question in detail.
The Inland Revenue Department recommends keeping payroll records for at least seven years. This document includes timesheets, wages, salary records, and leave entitlements. Depending on the record type, you may need to keep them longer. For instance, if your company operates under an industrial agreement or award, it may be necessary to keep those records for seven years after the termination of that agreement or award.
The Inland Revenue Department (IRD) requires employers to retain certain documents relating to employee payments for at least seven years after the end of the financial year in which you made the payment. These documents include payment summaries for employees leaving their employment and records of superannuation contributions made on behalf of employees. It’s also important to note that some countries require employers to keep different types of payroll documents for various lengths of time so check with your state government’s regulations before disposing of any payroll documents or information.
Finally, it’s worth noting that if you have set up an employee share scheme, you must maintain certain records associated with it indefinitely, as they will be required if an employee claims to you. Again, double-check your state government’s regulations before disposing of any employee share scheme-related documents or information.
Keeping accurate payroll records is extremely important, so make sure you know exactly what needs to be maintained and how long those documents need to be stored, both from a legal perspective and from a good practice point of view. Although there are some differences between states regarding payroll record retention requirements, most employers should generally keep their payroll documents for a minimum period of seven years after the end of the financial year. If you have set up an employee share scheme, you must keep these related documents indefinitely. Failure to do so could result in hefty penalties, so ensure you understand your obligations before discarding any documentation or information.