When you run a business, that’s exactly what you should be doing, running your business. Not drowning under a sea of admin. And one of the most time-consuming admin tasks is payroll and creating payslips.
With our BrightHR Software now integrated with Xero Payroll, these two powerful platforms enable you to accelerate payroll and save time by syncing employee information directly between systems. This can eliminate the need for you to duplicate data entry across systems.
Do I have to provide payslips?
As an employer, it is a legal requirement to provide each of your employees with a payslip every pay cycle, whether that’s weekly, fortnightly, or monthly. Payslips must also be provided within one workday of the employee being paid.
A payslip provides each employee with a breakdown of important pay-related information. It outlines an employee’s total wages earned, as well as any overtime, holiday pay, bonuses, or commission. It also shows the amount of income tax deducted.
It’s essential all the information included on payslips is up to date and accurate, which can help to avoid any pay disputes with your employees.
What information should be on a payslip?
There are several important pieces of information every payslip must include:
- Names: The payslip should include the full legal name of the employer, whether it’s a business, individual, or partnership rather than just a trading or business name, along with the employee's full name. This helps ensure the payslip clearly identifies the employing entity and is issued to the correct employee.
- Your ABN: Your Australian Business Number (ABN), if applicable.
- Pay period: The start and end date of the pay period the employee is being paid.
- Hours and rates: If the employee’s pay is calculated based on an hourly rate, the payslip must show how many hours the employee worked and the normal hourly rate.
- Gross pay: The employee’s total earnings for the pay period before any taxes or deductions are made.
- Tax: This is the amount withheld from an employee’s pay as tax under PAYG for the ATO.
- Net pay: This figure is the ‘take home’ amount the employee receives after taxes and deductions.
- Additional earnings: This covers overtime pay, bonuses, commission, or extra entitlements for the pay period.
- Superannuation: This specifies the amount paid into to the employee’s nominated super fund.
- Leave balances: The number of annual and personal/sick leave days an employee has accrued. While not mandatory, it is helpful for employees to know how many leave days they have available.
It’s important to keep all the details of an employee’s payslip strictly confidential. As a business owner you are required to retain employee payslips for at least seven years.
How should payslips be provided?
Payslips can be issued on paper, electronically, or both. Most businesses today supply them via an email or through the company’s HR platform. In terms of how you format and lay out the information in your payslips, the order shown above should work perfectly.
Payslips contain a lot of sensitive and private information. In the interest of data privacy, it’s important to ensure paper copies of payslips and any financial data are securely stored throughout the payroll process.
Creating payslips with all the critical information can help your payroll staff with record keeping, ensuring they have accurate and complete data for each pay cycle.
Payslips also ensure employees receive the correct pay and entitlements, helping you avoid unnecessary disputes, underpayments or overpayments. If there is anything about the information on a payslip an employee does not fully understand, you must explain it to them thoroughly is they ask.
If you’re unsure of modern award or enterprise agreement wages, pay entitlements and your employer obligations, call the specialist team at Peninsula for advice 24/7.
Peninsula works with over 24,000 Australian businesses supporting them with pay information and tailored documents and resources.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.