How long do you need to keep employee records? The answer determines whether you can defend yourself in a Fair Work investigation, respond to underpayment claims, or satisfy tax office audits. Australian employers must retain employee records for specific periods based on record type and legal requirements—and getting this wrong carries significant penalties. Many businesses discover their record-keeping failures only when they need historical data to defend a claim, by which time it's too late. Understanding Fair Work record retention rules isn't just about compliance—it's about protecting your business from disputes you can't defend without proper documentation. Modern HR software manages retention automatically, but you need to understand what must be kept and for how long.
This guide explains Australian record retention requirements, what records must be kept, how long to retain different record types, and practical tips for managing employee records throughout their lifecycle. Effective employee onboarding processes ensure records are captured correctly from day one.
Quick summary
- Employee time and wage records must be kept for seven years from creation
- Different record types have different retention periods from 5-7 years
- Records must be secure, accessible, and readable throughout retention period
- Poor record retention makes defending compliance investigations nearly impossible
Legal requirements for employee record retention
Multiple Australian laws impose record-keeping obligations on employers. The Fair Work Act and Regulations set the primary requirements, but tax law, superannuation law, and privacy legislation also create retention obligations:
| Record type | Retention period | Legal basis |
|---|---|---|
| Time and wage records | 7 years | Fair Work Regulations |
| Employment contracts | 7 years after termination | Fair Work Act + Tax law |
| Superannuation records | 5 years | SG legislation |
| Tax declarations (TFN) | 7 years after employment ends | ATO requirements |
| Leave records | 7 years | Fair Work Regulations |
| Termination documents | 7 years after termination | Fair Work Act |
The seven-year requirement for time and wage records is absolute—it applies regardless of whether the employee is still employed. This means if an employee worked for you in 2019, you must retain their time and wage records until at least 2026. Your rostering software should automatically maintain these records with proper archival.
What employee records must be retained
The scope of required employee records is broader than many employers realise. Here's what must be kept:
Time and wage records
- • Employee name and identification details
- • Start and finish times for each shift or working period
- • Break periods (paid and unpaid)
- • Ordinary hours, overtime, and penalty rate hours
- • Pay rates applied and amounts paid
- • Superannuation contributions
- • Deductions made and reasons
Employment documentation
- • Employment contracts (written agreements)
- • Letters of offer and acceptance
- • Position descriptions and duty statements
- • Award or enterprise agreement coverage documentation
- • Classification and level determinations
- • Variations or amendments to employment terms
Leave and entitlements
- • Annual leave accrual and taken
- • Personal/carer's leave records
- • Long service leave calculations
- • Parental leave applications and periods
- • Public holiday work or time off in lieu
- • Leave without pay periods
Tax and superannuation
- • Tax File Number declarations
- • PAYG withholding records
- • Superannuation fund choice forms
- • Superannuation contribution records
- • Payment summaries and payslips
Performance and conduct
- • Performance reviews and assessments
- • Training and qualification records
- • Disciplinary warnings and actions
- • Investigation reports and outcomes
- • Workplace health and safety incidents
Termination records
- • Resignation letters or termination notices
- • Redundancy documentation
- • Final pay calculations and evidence
- • Unused leave payouts
- • Separation certificates
Common record retention mistakes
Many compliance failures stem from misunderstanding or misapplying retention rules:
Deleting after employee leaves
Purging employee records shortly after termination. The seven-year period starts from record creation, not from employment end, so many records must be kept long after termination.
No backup procedures
Keeping records in one location without backup. A single flood, fire, or system failure can destroy years of required documentation with no recovery option.
Inaccessible storage
Archiving records in ways that make retrieval difficult or slow. Fair Work inspectors can request records with short notice—you must be able to produce them promptly.
Format degradation
Storing records in formats that become unreadable over time. Old software versions, obsolete file formats, or degraded paper can make records technically present but practically useless.
Incomplete record migration
When switching HR or payroll systems, failing to migrate or retain historical records. New systems don't remove old retention obligations.
No retention policy
Operating without documented record retention procedures. When staff change or systems migrate, undocumented practices are easily lost.
Practical tips for employee record retention
Implementing proper record retention protects your business and simplifies compliance management:
Use digital systems with automatic retention
Modern HR platforms manage retention periods automatically, preventing premature deletion and ensuring records remain accessible. Digital storage is more reliable and retrievable than paper filing systems. Integrate with your time and attendance system for straightforward record management.
Implement redundant backups
Cloud-based systems with multiple backup locations provide protection against data loss. For paper records, maintain offsite copies in secure storage. Test your backup recovery procedures annually.
Separate active from archived records
When employees leave, move their records to a terminated employee archive while maintaining full accessibility. This keeps active HR systems focused on current employees while preserving historical records.
Document retention procedures
Create written policies specifying what records are kept, for how long, where they're stored, who can access them, and when they can be destroyed. This ensures consistency even as staff and systems change.
Maintain format longevity
Store records in formats that will remain readable for seven years or longer. Standard formats like PDF for documents and CSV for data have better longevity than proprietary formats. Periodically review archived records for format obsolescence.
Secure access controls
Limit access to employee records based on role and need. Maintain logs of who accesses archived records and when. This protects privacy while ensuring records remain available to authorised users. Your communication systems should support secure access protocols.
Digital vs paper record retention
While both digital and paper records can meet retention requirements, digital systems offer significant advantages:
Digital record advantages
- • Automatic backup and redundancy
- • Instant retrieval and search capabilities
- • No physical storage space requirements
- • Protected from physical damage (fire, flood, deterioration)
- • Automated retention period management
- • Access controls and audit trails built-in
- • Easy to integrate with payroll and other systems
Paper record challenges
- • Physical storage space required (often offsite)
- • Vulnerable to damage or loss
- • Slow retrieval when records are needed
- • Manual retention tracking and disposal
- • Difficult to backup (requires copying/scanning)
- • Access logging requires manual processes
- • Can become illegible over time
For businesses still using paper records, consider a migration strategy to digital systems. The transition can be gradual—start with new employees and records going forward, while maintaining paper archives for historical records. Most businesses find digital systems pay for themselves through reduced storage costs and improved accessibility within the first year. Modern award interpretation tools can also ensure your pay records are accurate from the start.
Consequences of poor record retention
Failing to maintain proper employee records creates multiple risks:
- Fair Work penalties: Up to $18,780 for individuals and $93,900 for companies per contravention for record-keeping failures. Multiple employees with inadequate records equals multiple contraventions.
- Indefensible claims: Without proper records, you can't defend yourself against underpayment claims—even false ones. The burden of proof shifts to you, and without records, you lose by default.
- Tax and superannuation issues: The ATO can issue default assessments based on their assumptions rather than your actual payments if you can't produce records. This often results in overpayments of tax and penalties.
- Workplace disputes: Defending unfair dismissal or discrimination claims without documentation of performance issues, warnings, or proper processes is nearly impossible. Learn about proper payroll integration to ensure records flow correctly.
Frequently asked questions
How long must employee records be kept in Australia?
Under Fair Work regulations, employee time and wage records must be kept for seven years from the date they were created. Superannuation records must be kept for five years, and employment contracts and agreements should be kept for seven years after employment ends.
What employee records must be retained?
Required employee records include employment contracts, time and wage records (timesheets, payslips), superannuation contributions, leave records, tax declarations, performance documentation, disciplinary records, and termination documentation. Industry-specific requirements may add additional record types.
Can employee records be stored digitally?
Yes, digital storage of employee records is fully acceptable under Australian law, provided records remain accessible, readable, and protected from loss or unauthorised access. Digital systems often provide better security and retrieval capabilities than paper records.
What happens if employee records are lost or destroyed?
Loss or destruction of employee records can result in Fair Work penalties, shift the burden of proof to employers in disputes, make defending underpayment claims nearly impossible, and trigger tax office compliance issues. Proper backup and archival processes are essential.
Do record retention rules apply after employees leave?
Yes, record retention obligations continue after employment ends. Time and wage records must be kept for seven years from creation, not from termination date. This means records for a terminated employee may need retention for well over seven years in total.
What information can be deleted from employee records?
After the required retention period expires, records can be securely destroyed. However, consider keeping records longer for employees involved in workers compensation claims, legal proceedings, or historical reference. Privacy law requires secure disposal methods that prevent unauthorised access.
Are there penalties for poor record retention?
Yes, failing to maintain proper employee records can result in Fair Work penalties of up to $18,780 for individuals and $93,900 for companies per contravention. Beyond financial penalties, poor records make defending compliance investigations extremely difficult.
How should terminated employee records be stored?
Terminated employee records should be archived separately from active employee files but remain readily accessible if needed. Digital HR systems can automatically archive records while maintaining required retention periods and preventing premature deletion.
Related RosterElf features
Workforce management software built for shift workers
RosterElf gives Australian businesses the tools to manage rosters, track time, and support your compliance efforts—all in one platform designed for shift-based teams.
- Automatic seven-year record retention
- Secure cloud storage with backups
- Instant record retrieval when needed
Disclaimer: This article provides general guidance only and does not constitute legal or financial advice. Record retention requirements are subject to change. Always verify current requirements using official Fair Work Ombudsman and ATO resources before making employment decisions.
