Payroll record-keeping may not be the most exciting aspect of running a business, but it’s undeniably one of the most essential components of compliance and financial stability. This is particularly true for businesses operating in Australia and New Zealand, where strict regulations are in place. For example, employers in Australia must keep employee payment records for five years, while employers in New Zealand must keep records for seven years, all the while ensuring that they are accessible, legible, and meet legal requirements.
Making, keeping or providing false or misleading information and records on pay, leave, superannuation contributions, termination, hours-of-work records, and more, can lead to substantial financial penalties and even legal proceedings. The good news is that you can avoid these issues as you implement best practice record-keeping.
Maintaining accurate records
Keeping updated, accurate records is an important legal obligation, as well as a critical way to prevent future litigation from previous employees. It’s also necessary for meeting tax obligations, including calculating and reporting on employee income tax, PAYG withholding tax, and superannuation contributions. Furthermore, accurate records can provide you with valuable insights into the financial health of your business, and help you make informed decisions about budgets, expenses, and growth strategies.
Regularly backing up records
Don’t wait until disaster strikes to discover that your team hasn’t regularly backed up critical employee records. It’s important to plan ahead and put backup systems in place to prevent data loss due to unforeseen events such as natural disasters, hardware failures, and cyberattacks. In the event of a data loss, having a backup ensures that your business can continue its operations without significant interruption, minimising the risk of financial loss.
You have several options when it comes to backing up payroll and employee records, including cloud-based storage, on-premises storage, or a hybrid approach.
Establishing data-retention policies
In Australia and New Zealand, every business must retain certain employee documents for a particular length of time. Establishing a data-retention policy is the best way to ensure that you comply with these obligations. Data-retention policies specify how long records must be kept, the type of data that must be retained, and how data should be stored and disposed of once it is no longer needed. There are many benefits to establishing data-retention policies, including legal compliance, reduced storage costs, data security, improved accessibility, and reduced legal risks associated with disputes, litigation, and compliance violations.
Training employees effectively in record-keeping
Payroll is at the heart of your organisation, and ensuring your employees understand the importance of maintaining accurate and up-to-date payroll records is essential to contributing to its success. Businesses can develop comprehensive training programmes that cover legal requirements, best practices, and the use of technology and tools to manage payroll records effectively. Alternatively, you can outsource your payroll and benefit from the expertise and technology of payroll vendors, who maintain efficient and secure employee records to ensure legal compliance.
Can outsourced payroll benefit you?
When it comes to payroll records, it pays to be thorough. Incomplete or disorganised records are a recipe for disaster, and it’s only going to get messier without implementing best practices for record-keeping. Maintaining accurate records, regularly backing up data, establishing data-retention policies, and training employees can help avoid such issues.
But staying compliant through effective record-keeping isn’t as easy as it looks. Unless you have specialised knowledge and expertise in payroll regulations, the resources and the time to maintain compliance, it might make more sense to outsource your payroll functions.
Payroll vendors have the expertise to manage and maintain employee records, ensuring that they meet legal requirements and are kept secure. By outsourcing payroll, your business can focus on its core operations knowing that the accuracy, security, and compliance of your payroll data is in safe hands.
Affinity Payroll is committed to protecting your payroll information and records. With our expertise and advanced technology, we can ensure that your employee records meet legal requirements and are kept secure, while you focus on your core operations.
To find out how Affinity Payroll can ease your payroll burden, contact the team today.
For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.