Payroll Software Costs, Pricing Models and 2026 Rules
Payslip and employee record rules under the Fair Work Act: what your software must produce
What payslips must contain under Fair Work Regulations reg 3.46, the one-working-day rule, the 7-year employee record requirement and how to check your payroll software meets them.
Under the Fair Work Act 2009, employers must give each employee a payslip within one working day of paying them (s 536), and must keep prescribed employee records for 7 years (s 535 and the Fair Work Regulations 2009). The payslip content is set out in regulation 3.46 of the Fair Work Regulations: the employer's and employee's names, the employer's ABN, the pay period and date, gross and net pay, any loadings, penalties, allowances and bonuses as separate amounts, hourly rates and hours (for hourly employees), deductions and where they went, and superannuation contributions and the fund. Payroll software produces payslips and stores records, but you need to check that its templates include every required item and that you can still access records after you stop using the product.
This guide is part of the payroll and HR software comparison overview. It is general information; the Fair Work Ombudsman's payslip and record-keeping pages are the authority.
What a payslip must contain
| Item (reg 3.46) | Software check |
|---|---|
| Employer's name and ABN (if any) | Correct legal entity for each pay schedule, especially in groups with several entities |
| Employee's name | As per employment records |
| Pay period and date of payment | Matches the pay run |
| Gross and net amounts | Correct totals after all deductions |
| Any separately identifiable loading, monetary allowance, bonus, incentive payment, penalty rate or other separately identifiable entitlement | Each shown as a separate line, not merged into gross |
| For hourly-rate employees: ordinary hourly rate, hours worked at that rate and the amount | Rates and hours shown for each rate, including penalty rates |
| For annual-salary employees: the annual rate at the last day of the pay period | Shown on the payslip |
| Deductions: each amount, and the name (or name and number) of the fund or account it went to | Salary sacrifice, union fees, garnishee orders, voluntary deductions |
| Superannuation: the amount of each contribution made (or liable to be made) and the name, or name and number, of the fund | Fund names and contribution amounts per pay |
There are limited exceptions, for example for the superannuation fund details in a new employee's first payslips when no fund has been chosen yet. Payslips can be in electronic or paper form. Email, an app or an employee self-service portal is fine if employees can access them.
The one-working-day rule
A payslip must be issued within one working day of pay day, even if the employee is on leave. For software, check:
- payslips are released automatically when the pay run is finalised, not when someone remembers to click "publish";
- employees who have left still receive their final payslip (for example by email if their portal access was disabled);
- off-cycle payments (back pay, termination pay, bonus) produce their own payslips.
Employee records: what to keep and for how long
Employers must keep employee records for 7 years. Required records include:
- general details: employer and employee names, ABN, commencement date, employment basis (full-time, part-time, casual);
- pay: rate of pay, gross and net amounts, deductions, loadings, penalty rates, allowances and bonuses;
- hours of work for casual and irregular part-time employees, and overtime hours;
- leave taken and balances;
- superannuation contributions, fund and the basis of the amount;
- individual flexibility arrangements and guarantees of annual earnings where relevant;
- termination details: who terminated and how.
Records must be in plain English, readily accessible to a Fair Work inspector, and must not be false or misleading. Employees (and former employees) can ask for a copy.
The 7-year problem when you change software
Seven years outlasts many software subscriptions. If you switch payroll products, you still need the old records. Options include:
- Read-only access from the old vendor (often a reduced fee) — check the term and price.
- Full export of pay history, payslips, timesheets and leave history in a usable format (CSV for data plus PDF payslips).
- Migration of historical data into the new system, which is often limited to year-to-date balances rather than full history.
Illustrative example. A business switching after four years exports four years of payslips as PDFs (about 30 employees × 26 pays × 4 years = 3,120 payslips) plus CSV pay history, timesheets and leave transactions. It stores them in an access-controlled folder with a retention date seven years after each record's creation. Doing this before the old contract ends avoids paying for read-only access later. See contracts, exit terms and data export.
Tax records have a separate retention rule: the ATO generally requires business records to be kept for five years. Keeping payroll records for seven years covers both.
Penalties and enforcement
Failing to issue payslips or keep records can lead to civil penalties under the Fair Work Act, and in a dispute about wages, missing records can shift the burden of proof to the employer: if you cannot produce a required record, you may have to disprove the employee's claim. Records are also central to any underpayment investigation, see underpayment and wage theft.
Checklist for your payroll software
| Check | Done? |
|---|---|
| Payslip template shows every reg 3.46 item | ☐ |
| Penalties, loadings and allowances itemised, not merged | ☐ |
| Payslips released automatically within one working day | ☐ |
| Former employees can receive or download payslips | ☐ |
| Records of hours kept for casual and irregular part-time staff | ☐ |
| Leave history and balances exportable | ☐ |
| Full data export available on exit, with cost stated in the contract | ☐ |
| Records retained for at least 7 years | ☐ |
The full selection checklist includes these and other compliance checks.
Related: STP reporting runs alongside payslips but does not replace them, see STP Phase 2; super lines on payslips now follow each pay under Payday Super.
Frequently asked questions
Can I give payslips through an app?
Yes. Electronic payslips are permitted. Make sure employees can access them, including after they leave.
Do I need to show super on every payslip?
Yes, the amount of super contributions and the fund. Under Payday Super, the contribution should correspond to the pay it relates to.
Do I need records of hours for full-time salaried staff?
The hours-of-work record requirement focuses on casual and irregular part-time employees, but some awards and arrangements need more. Records of overtime should be kept where it is paid.
What if the old software vendor closes down?
That is why you should export your records regularly and on exit. Do not rely on a vendor existing in seven years.
Sources
- Fair Work Ombudsman — pay slips and record-keeping requirements
- Federal Register of Legislation — Fair Work Act 2009 ss 535–536 and Fair Work Regulations 2009 regs 3.31–3.46 (records and pay slips)
- Australian Taxation Office — business record-keeping (five years for tax purposes)
- business.gov.au — employer record-keeping overview
