From XU Magazine, 
Issue 22

Good record keeping is good for business

It is important for your clients to understand their record keeping obligations, as well as ensuring that records are stored safely and securely. With the introduction of Single Touch Payroll (STP) in Australia and Payday filing in New Zealand, the Australian Taxation Office (ATO) and Inland Revenue (IR) now have immediate visibility over what is being paid to employees at the time of each payday.
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In Australia, the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 is in effect. This means a reverse onus of proof can now apply when the Fair Work Ombudsman pursues legal action in relation to underpayments that have occurred since the commencement of the Act. If an employer does not meet record keeping obligations, including pay slip obligations, and they cannot give a reasonable excuse, they may need to disprove allegations in wage claims made in a court.

ATO have five rules for record keeping;

1. The requirement to retain all records related to starting, running, changing and selling, or closing your business.

2. The records must not be changed and must be stored in a way that protects the information being changed or damaged.

3. The requirement to retain most records for five years, for FBT, Super contributions and Super choice forms are from lodgement, contribution or received choice fund details.

4. The ability to show the ATO your records if they ask.

5. Your records must be in English, or able to be easily converted to English.

Opting for a Human Resource and Payroll system which provides digital record keeping will save your clients valuable time and money. It will also help them to meet their tax, superannuation and employer record keeping obligations.  They will also have the added benefit of being able to retrieve relevant records/documents quickly and easily and run reports on changes making the audit process less stressful.

Clients who do not have a digital solution may find it difficult to keep records orderly, making them hard to find as well as being less private and secure.   Using the CloudPayroll payroll system in Australia and the iPayroll payroll system in New Zealand, can greatly reduce the burden of record keeping for your clients.   These well established payroll systems have the following features:

Upload documents – keep employment documents secure and easy to access for each employee.  

Create HR custom fields – including next of kin, probation expiry dates, certification expiry dates (e.g. first aid, drivers’ license, Visa, training records etc).

Diary Notes – record activities for each employee. For example, record date and action of a disciplinary discussion, a promotion, or wage increase.

Audit trail – you can view who made a change to which employee and what the change was. There is also a pay rate audit trail which will show when a pay rate change has occurred.

As your clients’ trusted adviser, you can recommend record keeping methods best suited to the business needs to ensure they are keeping the required records.

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