Why record keeping matters more than it used to
Most employers think about records only when something goes wrong: an employee says they were underpaid, or a Fair Work Inspector asks to see your time and wages records. That is exactly when a missing timesheet or a lost pay slip hurts most.
Under section 557C of the Fair Work Act 2009 (Cth), if an employee makes a claim about their pay or conditions and you did not make, keep or provide a record or pay slip the law required, the burden shifts to you. Instead of the employee having to prove they were underpaid, you have to disprove it - without the records that would have done the job. A reasonable excuse can change that, but you should not plan on needing one.
The record keeping and pay slip rules are also civil penalty provisions, so failing to follow them can lead to penalties on their own, separate from any underpayment.
The 7-year rule for time and wages records
Section 535 of the Fair Work Act requires employers in the national system to make and keep employee records, and the Fair Work Regulations 2009 (Cth) set out what they must contain and how they must be kept. The headline rule is that time and wages records are kept for 7 years. They must also be:
- In English and legible.
- Readily accessible to a Fair Work Inspector - in a form you can actually produce when asked.
- Not altered, except to correct an error.
- Not false or misleading to your knowledge.
The Fair Work Ombudsman reviews its record keeping guidance from time to time, so check the current version on fairwork.gov.au, along with your award or enterprise agreement, which can add its own record keeping requirements.
What every employee record must contain
The Regulations break employee records into categories. In summary, for each employee you should be able to show:
| Record | What it must show |
|---|---|
| General details | Employer's name and ABN, the employee's name, start date, and whether they are full-time, part-time or casual, permanent or temporary. |
| Pay | Rate of pay, gross and net amounts paid, deductions, and any loadings, penalty rates, allowances or bonuses shown separately. For hourly pay, the hourly rate and hours paid at that rate. |
| Hours worked | Overtime hours (or start and finish times). Hours each day for casuals and irregular part-time employees. Fair Work recommends keeping hours for everyone. |
| Leave | Leave taken and the balance of each leave entitlement. |
| Superannuation | Contributions made, the fund they went to, the period they cover, the date paid, and the basis of the choice of fund. |
| Individual flexibility arrangements | A copy of any arrangement agreed under the award or agreement, and when it was terminated. |
| Guarantee of annual earnings | For high income employees with a guarantee, the guarantee itself and its terms. |
| Termination | How the employment ended (for example by notice or pay in lieu) and who ended it. |
There are also rules for records when a business is transferred to a new owner. Treat this table as a summary - the Regulations and the Fair Work Ombudsman's record keeping page have the exact wording.
Pay slips
Section 536 of the Fair Work Act requires you to give each employee a pay slip within one working day of pay day, even if they are on leave. Pay slips can be electronic - emailed or available online - as long as they contain the same information as a paper one.
A pay slip must show, among other things:
Who and when
The employer's and employee's names, the employer's ABN (if any), the pay period and the date of payment.
How much
Gross and net pay, and any loadings, allowances, bonuses, penalty rates or other separately identifiable entitlements.
Hourly pay
For employees paid by the hour, the ordinary hourly rate, the hours worked at that rate and the amount paid at that rate.
Deductions and super
Each deduction with its amount and recipient, and the super contributions made and the fund they went to.
The other clocks: tax, super and WHS
Fair Work is not the only regulator with a retention period, and they do not all line up:
- Tax and payroll (ATO). The ATO generally asks businesses to keep records of payments, tax withheld and super for at least 5 years, and longer in some cases, such as while an assessment can still be reviewed.
- Super. Records of super contributions and choice of fund are kept for at least 5 years, and the ATO recommends keeping them for as long as the person works for you.
- Work health and safety. Periods vary by record and by state or territory. Some, such as health monitoring records for workers exposed to certain hazards, must be kept far longer than payroll records. Check with your state WHS regulator for the records your work creates.
Because the clocks differ, many businesses simply keep the whole employment file for at least 7 years after the person leaves. That is a practical safe default, not a legal rule - some records need to be kept longer, and privacy obligations mean you should not keep personal information you no longer need forever.
Contracts, policies and signed acknowledgements
Not every document on an employee's file is an "employee record" under the Regulations. But the signed employment contract, the acknowledgement that they received the Fair Work Information Statement, and the policies they agreed to are what you will rely on if there is a dispute about what was agreed.
A paper contract in a filing cabinet proves less than you might think: it can be lost, the signature page can go missing, and it says nothing about when it was signed or by whom. An electronically signed copy keeps its signing history and certificate of completion with the document, so you can show who signed and when.
Electronic signatures are valid for most employment documents in Australia. See are electronic signatures legal in Australia for the detail, and our employee onboarding checklist for the documents to collect when someone starts.
Paper vs digital records
Nothing in the Fair Work rules requires paper. Electronic records are fine, provided they meet the same tests. In practice a good digital record system makes those tests easier to pass:
- Searchable. You can find one person's hours for one week in seconds, not after a day in the archive boxes.
- Hard to change quietly. Approved records are locked, and corrections leave a trace of who changed what.
- Exportable. You can hand an inspector or your accountant a file, not a stack of photocopies.
- Stored securely. Access is limited to the people who need it, and the records do not disappear with a lost laptop.
How AirSign keeps these records
On every AirSign plan, signed documents are stored in your account with their signing history and certificate of completion, and you can download the signed documents and audit certificates from many sessions at once as a single zip.
For hours, leave and compliance, AirSign Staff Management (Enterprise plan) adds:
- Approved hours are locked. Once a timesheet entry is approved it is locked for everyone and cannot be deleted. If an approval was wrong, Unapprove reopens it and a note on the entry's timeline records who reopened it. Rejecting an entry requires a reason. See Approving Timesheets.
- Clocked vs keyed hours. Staff clock in and out from their phone, with optional location, photo and geofence checks. Hours typed in afterwards are marked "Added by hand", so you can tell the two apart.
- Payroll-ready weeks. Approved time is split by your award rules into ordinary, overtime and penalty hours, then pushed to Xero Payroll (AU) or exported as CSV.
- Leave allowances and balances per person.
- Compliance documents tracked to expiry. Licences, checks and certificates sit on each person's record, with reminders before they lapse.
To be clear about the boundary: AirSign prepares the hours, it does not run payroll or issue pay slips. Your payroll system (for example Xero Payroll) still pays wages, calculates tax and super, and produces the pay slips.
Record keeping checklist
- Every employee has a record with name, start date and employment type
- Pay rates, gross and net pay, deductions, loadings and allowances are recorded each pay
- Hours are recorded for casuals, irregular part-timers and overtime (ideally for everyone)
- Leave taken and balances are up to date
- Super contributions are recorded with fund, period and payment date
- Pay slips go out within one working day of pay day
- Flexibility arrangements and guarantees of annual earnings are on file
- Termination records show how employment ended and who ended it
- Signed contracts, information statement acknowledgements and policies are stored together
- Records are in English, legible, and can be found and produced quickly
- Corrections leave a trace instead of overwriting the original
- Time and wages records are kept for at least 7 years, tax and super records for at least 5
This article is general information only and is not legal, tax or financial advice. Record keeping obligations depend on your award, agreement, industry and state. Check the current requirements on fairwork.gov.au and ato.gov.au, your award, and your state or territory WHS regulator, or get professional advice for your situation.