Last updated: 24 October 2026. Written by the FreeMyCloud team.
Checked against the Fair Work Ombudsman pay slips, record-keeping, infringement notice, litigation and labour hire pages, the Fair Work Ombudsman joint media release of 22 October 2026, and the ATO record-keeping and phoenix activity pages on 24 October 2026.
- Payslips have to reach an employee within 1 working day of pay day, even if the employee is on leave.
- Time and wages records have to be kept for 7 years, legible, in English and readily accessible to a Fair Work Inspector.
- Most tax and super records have to be kept for 5 years under the ATO’s five record-keeping rules, so two clocks run side by side.
- A Fair Work Inspector can issue an infringement notice of up to $2,184 per breach for an individual and $10,920 for a corporation.
On 22 October 2026 four regulators walked onto berry farms in the Nambucca Valley and Coffs Harbour. Nothing has been found yet, and the agencies said so. What is useful for every other Australian employer is the list of things four agencies turned up to look at, because almost all of it is payroll compliance, and almost all of it lives in records a business either has or does not have on the day someone asks.
What happened when four regulators inspected NSW berry farms?
The Fair Work Ombudsman announced the operation in a joint media release on 22 October 2026 with the ATO, the Australian Border Force and SafeWork NSW. Officers from all four agencies spent two days inspecting berry farms and interviewing growers, pickers, packers, supervisors and labour hire intermediaries.
The Fair Work Ombudsman said investigations are ongoing and no findings are yet available. Targets were selected because of a known or alleged history in their labour supply chain of problems familiar to any employer: non-payment for time worked, underpayments including piece rate issues, the wrong penalty rates or casual loading, unpaid overtime, payslips not issued, breaks not given, and tax and super obligations not met. The agencies were also looking for phoenixing by labour hire businesses.
Fair Work Ombudsman Anna Booth said the horticulture sector remains a priority given its significant number of visa holders. The region has history: the Fair Work Ombudsman said its 2025 Horticulture Compliance Report found 61 per cent of all employers assessed in the combined Coffs Harbour and Grafton region were not meeting their obligations under the Fair Work Act, rising to 74 per cent among labour hire employers.
What does payroll compliance in Australia mean for a small business?
It means the chain from the hours a person works to the records that prove what they were paid for them. Nothing on the regulators’ checklist is specific to berries, and each item has a record behind it.
| What the regulators said they were checking | The record that answers it |
|---|---|
| Non-payment for time worked | Timesheets or rosters showing start and finish times |
| Underpayments, including piece rate issues | Pay rate paid, gross and net amounts, hours worked |
| Wrong penalty rates or casual loading | Loadings, penalty rates and allowances itemised separately |
| Unpaid overtime | Overtime hours worked each day, with start and finish times |
| Payslips not issued | A payslip within 1 working day of each pay day |
| Breaks not given | Rosters and hours records read against the relevant award |
| Tax and super obligations not met | Super amounts, pay periods, dates paid and fund names |
Penalty rates, casual loading and overtime pay: what the records have to show
Under the Fair Work Ombudsman’s record-keeping rules, any incentive based payment, bonus, loading, penalty rate or other monetary allowance has to be recorded as a separately identifiable entitlement. Overtime goes further: the record has to show the overtime hours worked during the day and when the employee started and finished them. Award interpretation and payroll records are really the same job, as our guides to penalty rates and award coverage in hospitality and annual leave loading show.
What is a payslip, and what has to be on it?
A payslip is the record that tells an employee what they were paid and how it was worked out. The Fair Work Ombudsman’s pay slips guidance sets out the timing and the contents, drawing on sections 536 and 539 of the Fair Work Act 2009 and regulations 3.45 to 3.48.
When payslips have to be given
Payslips have to be given within 1 working day of pay day, even if the employee is on leave. They can be electronic or hard copy, and an electronic payslip has to carry the same information as a paper one.
| On every payslip | Detail required |
|---|---|
| Parties and period | Employer and employee name, employer ABN if applicable, pay period, date of payment |
| Pay | Gross and net pay |
| Hourly employees | Ordinary hourly rate, hours worked at that rate, total dollar amount at that rate |
| Extras | Loadings including casual loading, allowances, bonuses, incentive based payments and penalty rates that can be separated from the ordinary rate |
| Deductions | Amount and details of each deduction, and the name or name and number of the fund or account it was paid into |
| Super | Contributions made or intended for the pay period, and the name or name and number of the fund |
One trap sits outside the table: paid family and domestic violence leave must not be named on a payslip at all, and is instead recorded as ordinary hours or another kind of payment for performing work. Because the super fund name and amount belong on the payslip, the payslip and the super ledger have to agree, which ties into the super guarantee rate and Single Touch Payroll reporting.
Which employee records must an Australian employer keep?
Employee records are a bigger set than payslips. Time and wages records have to be kept for 7 years, readily accessible to a Fair Work Inspector, legible and in English, and cannot be changed except to correct an error. The source reference is sections 535 and 539 of the Fair Work Act 2009 with regulations 3.31 to 3.44. The categories run from commencement date and employment type through pay, hours, leave, super, individual flexibility agreements and how employment ended.
Record keeping: the ATO clock runs for a different length
Under the ATO’s five rules for record keeping, last updated 18 June 2026, most records have to be kept for 5 years from when the record was prepared or obtained or the transaction completed, whichever is later, and have to be in English or easily convertible to English.
| Record | How long | Who sets it |
|---|---|---|
| Time and wages records | 7 years | Fair Work Act 2009, s 535 |
| Most tax and super records | 5 years | ATO record-keeping rules |
| Super fund choice records | 5 years from engagement or the choice | ATO record-keeping rules |
| Company records | 7 years | ASIC, as noted by the ATO |
The longer period wins in practice: payroll records kept for 5 years are short by two on the Fair Work side, so one 7 year policy is simpler than two. It is the sort of housekeeping that disappears once someone owns it week to week, as our guide to what a bookkeeper does sets out.
What happens if the payroll records are not there?
A Fair Work Inspector can issue an infringement notice, which works like an on the spot fine, for not making or keeping time and wage records, not including the right information on a payslip or employee record, or not issuing payslips within 1 working day. It can be issued the first time a problem occurs, and within 12 months of the breach.
| Outcome | Maximum amount |
|---|---|
| Infringement notice, individual | Up to $2,184 per breach |
| Infringement notice, corporation | Up to $10,920 per breach |
| Court penalty, individual | Up to $21,840 per contravention, or $218,400 for some serious contraventions |
| Court penalty, company with fewer than 15 employees | Up to $109,200 per contravention, or $1,092,000 for some serious contraventions |
| Court penalty, company with 15 or more employees | Up to $546,000 per contravention, or for underpayments the greater of $546,000 or 3 times the underpayment, and $5,460,000 for some serious contraventions |
Only a court can decide a penalty amount. A serious contravention is one where the court finds the person or business knew they were contravening a workplace obligation or was reckless about whether it would happen, and the higher band expressly covers record-keeping and payslip requirements, not only underpayments.
Where an employer has not met its record-keeping or payslip obligations and cannot give a reasonable excuse, it has to disprove allegations in a wage claim brought in court. The ordinary position, where the person making the claim has to prove it, no longer applies.
That rule has nothing to do with whether anyone did anything wrong: an employer who paid correctly but cannot show it is in a worse position than one who can. Since 1 January 2025 intentionally underpaying an employee can also be a criminal offence, while honest mistakes are not. Our explainer on what a bookkeeper, BAS agent and accountant each do draws the lines on who handles which part.
Who is responsible when a labour hire business underpays?
This is the part of the operation that reaches furthest beyond horticulture. The Fair Work Ombudsman’s guidance on labour hire and supply chains is explicit: employers must ensure all employees engaged in their supply chain receive the correct minimum entitlements, or they could be responsible for not following the law.
The mechanism is accessorial liability. A person or company involved in a contravention can be legally responsible, and the regulator names company directors, human resources managers, other managers, accountants and other businesses in the supply chain. Its worked example is a business paying a contract price it suspects is too low to cover overtime and penalties, and not raising it. That makes the commercial question a records question: a host holding the labour hire agreement, the invoices and the hours charged is in a very different position from one that kept nothing. Businesses engaging subcontractors face related questions, covered in contractor versus employee and bookkeeping for contractors.
What does the Horticulture Award cover?
The Horticulture Award summary [MA000028] states that it covers employers whose business is importantly in the raising of horticultural crops, and their employees who fit the award classifications. It also covers labour hire businesses and their employees placed with a horticulture organisation, which is why a labour hire operator cannot treat award obligations as the grower’s problem.
What is phoenix activity, and why were four agencies looking for it together?
Phoenix activity is a deliberate attempt to avoid paying debts owed by a company by transferring its assets and continuing the same or similar business through a new entity, leaving employees, creditors and the community to bear the cost. The ATO’s phoenix activity guidance, last updated 18 September 2026, puts the annual economic impact at an estimated $4.89 billion, including $3.3 billion from unpaid creditors and $155 million in unpaid employee entitlements.
That is why four agencies arrive together. A labour hire business that closes owing wages usually also owes PAYG withholding and super, so the workplace, tax and migration questions sit in one file. The ATO lists warning signs for other businesses, including directors previously involved with liquidated companies, and changes to a company’s directors and name while the management and staff stay the same.
The super guarantee rate has been 12% of ordinary time earnings since 1 July 2025, and for employee earnings paid from 1 July 2026 the payday super rules apply. See our notes on payday super.
What can a small business do about payroll compliance this week?
Six checks, and none of them is a project: that payslips go out within 1 working day of every pay day, that each payslip itemises loadings and allowances separately, that hours and overtime are recorded with start and finish times, that super amounts and fund names on payslips match what was paid, that records are retained for 7 years rather than 5, and that there is a copy of every labour hire or subcontractor agreement with the hours charged against it.
Where that falls over is usually capacity rather than knowledge. FreeMyCloud has placed university-qualified graduate accountants based in the Philippines with Australian businesses since 2010, from individual operators to ASX-listed companies, working Australian business hours and able to work with Xero, MYOB, QuickBooks, Reckon or the client’s own software. Our outsourced payroll services cover the pay run, the payslips and the records behind them, inside the wider outsourced bookkeeping and accounting service. For smaller teams, bookkeeping for small business is the usual starting point, and the savings calculator shows the cost difference, which is about 50% less than employing a bookkeeper locally. FreeMyCloud is not a registered tax or BAS agent and does not lodge: this is back office support alongside your own registered agent.
Want the payroll records kept properly every week?
A graduate accountant can take the pay run, the payslips and the record keeping off your desk and keep them ATO-ready.
Or call 1300 66 88 14, or try the savings calculator. No lock-in contracts.
Frequently asked questions
What is wage theft under Australian law?
Wage theft is the common term for underpaying employees. Since 1 January 2025, intentionally underpaying an employee can be a criminal offence under Australian workplace law. The Fair Work Ombudsman can investigate suspected criminal underpayment and refer matters to the Commonwealth Director of Public Prosecutions or the Australian Federal Police. Honest mistakes are not treated as criminal offences, though they can still lead to back pay and civil penalties.
What happens in a payroll audit?
A Fair Work Inspector can ask for time and wages records to work out what an employee is entitled to and whether they were paid correctly. Records have to be readily accessible, legible and in English. A payroll audit is therefore mostly a document exercise: rosters, timesheets, pay rates, loadings, overtime hours, leave, super amounts and fund names. Where the records answer the questions, the audit is short.
How long do payslips and pay records have to be kept?
Time and wages records have to be kept for 7 years under the Fair Work Act 2009. Most tax and super records have to be kept for 5 years under the ATO’s record-keeping rules, measured from when the record was prepared or obtained or the transaction completed, whichever is later. Because the two periods differ, keeping payroll records for 7 years satisfies both without running separate retention rules.
Do employers have to record hours for salaried staff?
The Fair Work Ombudsman says employers should keep records of hours worked for all employees, including pieceworkers, and are required to in some circumstances. Hours have to be recorded for casual and irregular part-time employees paid on time worked, and overtime hours have to be recorded with start and finish times. Where an employee is paid an annualised wage under an award, extra records are required.
Can a bookkeeper or accountant be held liable for an underpayment?
Yes, in principle. The Fair Work Ombudsman states that a person involved in a company’s contravention can be taken to court, and lists company directors, human resources managers, other managers, accountants and businesses in the supply chain. This is called accessorial liability and it applies to anyone knowingly involved in a breach. It is a reason for payroll work to be documented rather than informal.
Is super part of payroll compliance?
Yes. Superannuation contributions are one of the record categories employers have to keep, covering the amount paid, the pay period, dates paid, the fund name and the reason for paying into it. Super amounts and fund details also belong on the payslip. The super guarantee rate is 12% of ordinary time earnings, and payday super rules apply to employee earnings paid from 1 July 2026.
This article is general information about Australian bookkeeping, payroll and reporting obligations, current as at 24 October 2026. It is not tax, financial or legal advice. FreeMyCloud is not a registered tax or BAS agent and does not prepare or lodge tax returns. Rates, thresholds and dates change. Confirm your own position with your registered tax or BAS agent.
