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All employers know how important it is to treat your employees well as they are the backbone of your business. In 2025, ensuring your team is paid accurately and on time is more critical than ever, both for maintaining morale and staying compliant with the latest legislation.
Paying employees isn’t always as simple as sending them a cheque. With the latest digital payroll systems now widely available, there are numerous factors to consider, such as:
- Is my employee permanent or casual?
- What are their current working rights?
- Do I have adequate record-keeping obligations in line with 2025 standards?
- How does superannuation work now (with contributions recently updated to 12% of earnings)?
- What about insurance obligations?
- What obligations do I have according to Fair Work Australia’s latest guidelines?
So, when you pay your employees, you also have to consider your employer obligations and ensure that all minimum entitlements are met. If you’re not sure how much you should be paying your employees, you can use Fair Work’s updated calculator here.
This article will guide you through all the key things to consider when paying your employees (and share ways to streamline the process with modern digital tools)! In 2025, embracing technology with tools like automated payroll and Single Touch Payroll (STP)-enabled software can significantly reduce errors and make compliance easier.
What Is A Payslip?
When employees receive payment, it isn’t always the same for everyone. For example, some employees might have additional deductions or earn more for overtime. Since each payment is personalised based on various factors, each employee receives a detailed payslip.
What Is Included On A Payslip?
While most payslips are customised, they should generally include the following details:
- Employer and employee’s name
- ABN
- Pay period details
- Gross and net pay
- Applicable hourly or salary rates along with the number of hours worked
- Any other paid entitlements (for example, casual loading)
- Authorised deductions such as superannuation and health insurance contributions
- Superannuation contributions (employees are now entitled to a contribution of 12% of their earnings).
- Employee’s employment status (for instance, part-time or full-time)
- Any applicable Award details
- Employee’s bank account details
Despite any small differences in each employee’s payslip, it must show the final amount they take home. It’s also important to note that payslips must be provided to employees within 1 working day of the pay date – this requirement applies even when an employee is on leave.
Fair Work has detailed the rules around payslips further here.
Do I Need To Register For PAYG Withholding?
Employers typically collect PAYG withholding amounts from employees’ wages to help cover their end-of-year tax liabilities. Therefore, you’ll need to register for PAYG withholding if you make payments to:
- Employees
- Contractors
- Businesses that don’t provide their ABN
Once registered, you will collect the relevant withholding amounts and remit them to the Australian Taxation Office (ATO). If you’re operating as a sole trader, our guide on operating as a sole trader can provide further clarification on your obligations. If you’re unsure how to calculate the tax to withhold, you can use the ATO’s PAYG calculator here.
In 2025, Single Touch Payroll continues to be an invaluable tool for employers, enabling seamless and automatic reporting of payroll details directly to the ATO.
Single Touch Payroll (STP)
As mentioned earlier, employers must report the amounts withheld to the ATO. This is achieved through Single Touch Payroll, which is mandatory for all employers registered for PAYG withholding.
So, what kind of information do you need to send?
- Salaries and wages
- PAYG Withholding amounts
- Superannuation contributions
Thankfully, this reporting process is automated when using STP-enabled software.
It’s important for employers to understand their obligations around PAYG withholding, as non-compliance can result in significant penalties. The ATO has provided detailed guidelines on how to use STP here.
How Do I Generate Payslips For My Employees?
Each employer may have their own preference for issuing payslips. For example, you might choose to provide an electronic version to keep all your important records accessible online.
In 2025, many businesses have transitioned to cloud-based payroll systems, which make it easier to generate and distribute electronic payslips that integrate directly with Single Touch Payroll. If you opt for electronic payslips, remember that Fair Work requires they be sent via email or made available in an electronic personal account and be in a printable format. This ensures that all employees can easily access and print their records when necessary.
- Are sent via email or into an electronic personal account, and
- Are in a printable format
Some employers still prefer printed payslips. However, electronic payslips tend to be more efficient, saving physical space and making it easier to retrieve records when reporting payslip details to the ATO.
Regardless of the method, having a standard payslip template can speed up the process and ensure you include all the correct information.
Do I Have An Obligation To Keep Payslips?
Fair Work clearly states that employers must retain employee records, including payslips, for a minimum of seven years. This includes maintaining records that are:
- Accurate and free from false or misleading information
- Unaltered since issuance
- Stored in a format that is readily accessible to a Fair Work Inspector
Remember, payslips are just one type of record you should be keeping. Fair Work provides a list of all the records employers are obligated to retain, which you can review here.
What If I Don’t Have The Correct Information On The Payslips?
While mistakes can happen, it’s essential to double-check every payslip, as it details each employee’s entitlements and serves as evidence that they are being compensated properly.
If incorrect information appears on a payslip, you might face an infringement notice – essentially a fine. In 2025, these fines can be as high as:
- Up to $1,500 for an individual
- Up to $7,500 for a company
Matters become even more serious if the payslip information is false or misleading and the employer is aware of it. In such cases, penalties in 2025 can reach up to $13,320 for an individual and $66,600 for a corporation, with the potential for legal action in severe or repeated breaches of record-keeping obligations.
How Can I Avoid This?
To mitigate these risks, it’s important to encourage open communication with your employees so that any inaccuracies are flagged immediately. When an error is identified, notify the employee and rectify the mistake as soon as possible.
For instance, if an employee is inadvertently underpaid, promptly inform them and arrange for the outstanding amount to be paid without delay. Additionally, if an employee requests access to their records, it is your duty under current legislation to provide this information quickly.
Need Help?
Payslips are a crucial part of employers’ obligations to their employees, and errors can lead to hefty fines that you certainly want to avoid. Ensuring all payroll records are accurate not only protects your workers but also safeguards your business from potential compliance issues.
To avoid these pitfalls, always ensure that:
- You verify that employee details are up to date (for example, confirming whether a casual worker is receiving the correct pay rate).
- Payslips are issued promptly and in the correct format.
- Wages are calculated accurately, particularly for those covered under an Award.
- Payslips adhere to all current requirements, including providing accessible records.
- You maintain duplicate copies of each payslip for your records.
If you need assistance with managing payslips or any other important employee records, our team at Sprintlaw is here to help. You can reach out to us at team@sprintlaw.com.au or call us on 1800 730 617 for an obligation-free chat. Additionally, our contract review services can help ensure that your employment agreements and payroll systems are fully compliant with 2025 regulations.
Embracing digital solutions in 2025 not only simplifies the administrative burden of payroll but also enhances transparency and accountability. By investing in reliable payroll software and regularly reviewing your processes against the latest Fair Work requirements, you can focus more on growing your business and less on administrative hassles.
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