Keeping your staff records
As an employer, the Australian taxation office (ATO) requires you to keep staff records for a minimum of five years. There are no rules around whether they must be kept as a digital or hard copy, however they must be easily accessible upon request. As well as being a legal requirement, having your documents in order will mean that your processes will be far smoother come tax time.
For full-time, part-time, casual employees and contractors, the following records must be kept on file:
- copies of tax file number declarations or withholding declarations
- copies of any contracts you have with contractors
- records of wages, allowances and other payments made to workers
- copies of payments and reports provided to the ATO
- copies of payment summaries
- super records, including payments you made and records that show you have met your choice of super fund obligations
- records of fringe benefits provided, tax calculations, worksheets, declarations, elections and supporting details.
To protect the privacy of employees and contractors, fitness business owners must have adequate security around these personal records. If stored digitally the files should be backed up regularly to avoid loss or damage.
In addition to the above information, employers are required to store all documents relating to their employee’s superannuation. As well as keeping a record of what was paid, employers need to be able to provide proof around how the super contribution was calculated. The purpose of these records is that you are able to prove to the ATO that you have met your choice of super fund obligations. The ATO provides a list of these obligation on their website:
- details of employees who do not have to be offered a choice of super fund (for example, if an employee is not eligible to choose a fund because the certified agreement they are employed under requires super support to be provided to a specified super fund, you need to keep this information)
- records confirming that the super fund meets the insurance requirements (these could include a copy of the product disclosure statement provided by the fund or a record of a phone conversation with an authorised representative of the fund about the level of insurance it offers)
- records showing that you have provided the Choosing a super fund – How to complete your Standard choice form (NAT 13080) to all eligible employees.
- written information an employee provided when they nominated their chosen fund or retirement savings account
- receipts or other documents issued by funds showing that you have made super contributions for employees to their chosen fund.
The ATO provides a free tool to help new business owners understand the types of records they need to keep, and existing businesses to evaluate their record keeping processes. This tool can be accessed here.
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