Pay slips ensure that employees receive the correct pay and entitlements and help employers to keep and maintain accurate records.
Employer obligations in relation to pay slips
Employers must give a pay slip to each employee within one working day of pay day. Pay slips must also be given to employees who are on leave.
Pay slips may be given electronically (by email for example) or in paper form.
What information must be included on a pay slip?
Pay slips must specify:
- the employer’s name
- the employer’s Australian Business Number (if any)
- the employee’s name
- the pay period that the pay slip relates to
- the date on which the payment was made
- the gross amount of the payment
- the net amount of the payment
If the employee is paid an hourly rate:
- the ordinary hourly rate
- the number of hours worked at that rate
- the total dollar amount of pay at that rate
Any amount paid that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement – for example, if the employee is a casual, then the casual loading rate and amount would be shown separately.
If any deductions have been made, the pay slip must specify the amount and details of each deduction as well as the name or number of the fund/account the deduction was paid into. An example of a deduction would be union fees, if applicable.
The pay slip will also need to specify any superannuation contributions paid by the employer, including the amount of contributions made during the pay period and the name of the superannuation fund the contributions were made to.
There is no requirement under the FW Act or the Fair Work Regulations to display an employee’s leave balance on their pay slip, but an employer must tell the employee what their leave balances are if the employee asks for it.
What are the consequences if an employer fails to give pay slips, or the pay slips do not have the correct information shown?
An employer may receive an infringement notice from the Fair Work Ombudsman if a pay slip does not include the correct information, or pay slips are not issued at all or within 1 day of the employee’s pay day.
It is also unlawful for employers to give pay slips that are false or misleading.
The maximum civil penalties for providing false or misleading information on a pay slip is $13,320 per breach for an individual or $66,000 per breach for a corporation.
Best practice tips for employers
For employers to meet their pay slip obligations, it is recommended that they:
- issue pay slips in an easily printable format
- make sure employees can access and print their pay slips in private
- write pay slips in plain English that is simple to understand
Other developments to be aware of
Legislation has been passed by Parliament removing the requirement for an employee to earn at least $450 in a month in order to qualify for superannuation guarantee (SG) contributions. This change takes effect on 1 July 2022.
This means that all employees, including those who earn less than this amount per month will be entitled to SG contributions.
Employers are also reminded that the SG percentage will increase from 10% to 10.5% on 1 July 2022.