If only paying your employees was as simple as writing cheques or sending electronic payments. While the “payment” part could be that simple, the pay slip that goes with an employee’s payday is more complicated.
The Fair Work Regulations requires these documents to contain very specific information. Paying employees is one thing, but providing prompt pay records with the correct information is a separate issue that companies must address.
Do you know what goes into the perfect pay slip? Keep reading to learn more.
What is a Pay Slip?
Your company’s pay slips are the personalised documents that accompany each employee’s payment within one working day of making payment. This document notes an employee’s wages over the pay period. The document can also include itemised deductions and contributions.
With each slip, an employee understands, amongst other things, their gross pay amount and the amount deducted from the total payment. The slip also shows an employee’s final net amount, or their “take-home” pay for the current pay period.
How Do Employers Generate Pay Slips for Employees?
Employers can provide printed or electronic versions to employees. If you choose electronic delivery, it is a good idea to notify your employees when their pay has been actioned. If your employees prefer printed payments, you can provide a printed version.
To keep good records and make sure you don’t forget anything on your employee pay slips, use a template. Electronic templates make it simple to follow the pay slip information requirements.
Print or deliver pay slips electronically using your template. When using a template, make sure each employee’s information is accurate. Review critical personal and wage information for accuracy before saving and sending it to an employee. You never want the wrong employee’s information to go to a different employee.
No matter what template you use to generate pay notices, be sure your template includes all of the required information.
Make sure you file each slip for each employee. Electronic templates make it easy to keep accurate records without taking up space in file boxes or cabinets. Be sure to keep these records for a minimum of seven years as per the legislation. Missing information can lead to fines.
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What Must Employers Include on a Pay Slip?
A template helps you include all of the required information on each employee’s slip. The Fair Work Regulations are very clear, and all employers must provide this information for each pay period to each employee.
Required information includes:
The employee’s legal name (the office nickname doesn’t count)
Your business name and Australian Business Number (ABN), if applicable
Date of payment
The pay period covered by the payment (day, month, and year)
The number of hours worked by the employee
The employee’s hourly rate (if applicable)
The employee’s salary rate (if applicable)
The gross payment amount
The amount of any loadings, allowances, overtime, allowances, or bonus/commission payments
Types and amounts of all deductions from the employee’s gross pay (taxes, penalties, etc.)
The net amount of the payment (after deductions and additions)
Details of any superannuation contributions involved in the pay period
Any relevant Modern Award that applies to the employee
Each employee’s employment status (full-time, part-time, or casual)
An employee’s classification under the Award/Agreement
The employee’s bank details
The employee’s accrued leave balanceAfter those requirements, consider if it is appropriate to add a few more items below that are helpful to employees and for your record-keeping. The law doesn’t require these items, but they’re a good idea.
Using pay slips to provide a combined location where employees can check their current pay, YTD income, and their amount of leave is an excellent benefit for employees. It’s also an efficient way to keep your records up to date.
When Should Employers Issue a Pay Slip?
The Fair Work Regulations are very clear about when you must deliver a pay slip to each employee. Whether electronically or in print, employers must send these documents within one day of the pay date.
Any delay in delivering slips for a pay period can result in a fine.
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Frequently Asked Questions
Do I have to provide a pay slip for my employees?
Yes. The Fair Work Act outlines the obligation of employers to provide pay slips to all employees. Employers who fail to deliver them on time for each pay period can face penalties and fines.
Why is a pay slip important to a worker or employee?
Pay slips ensure that employees receive the correct wages and entitlements per pay period. Each employee’s pay record also confirms legal deductions from each pay period.
A pay slip also helps employees apply for a home or other type of loan. The documents serve as proof of employment and income verification for loan applications or housing rental applications.
Are pay slips confidential?
Yes. Employers must deliver pay documents to an employee’s private electronic account or in a sealed envelope. Pay slips contain an employee’s confidential pay rate, details about their entitlements and may also contain their current leave balances. Since the slips also contain private information, including banking information, employers must deliver them securely.
How long do I have to keep wage records?
Employers must keep time and wage records for seven years to stay compliant with the legislation. All records must be in English, readily available to a Fair Work Inspector (FWI), and easy to read and understand.
Are handwritten pay slips legal?
Yes, however, most businesses prefer electronic or printed documents. If an employee uses a pay slip when applying for a loan, many banks and lenders don’t accept handwritten pay records.
Whether handwritten or done electronically using a template, pay slips must be legible. Employees and Fair Work Inspectors must be able to read each slip without issue.
Can I email pay slips to employees?
Yes. Sending pay slips electronically is an excellent way to deliver these documents to employees. Be sure you send pay slips to an individual email account for each employee. Do not post a link to access electronic slips publicly or on a server with unsecured access.
Should I include sick leave on employee pay slips?
While it’s not required, including an employee’s accrued sick leave is helpful for employees. It is important to note that employee’s being able to view their accrued balance sometimes leads to employee’s using their sick leave entitlement when it is not genuine. However, it’s convenient to have year-to-date income, deductions, and accrued leave in one central document for both employees and employers.
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