What Business Owners Need to Know
More payroll platforms now offer employee self-onboarding. Instead of details being manually keyed in by you, your bookkeeper or payroll officer, employees enter their own information directly into the system. This saves time, reduces errors, and streamlines administrative tasks.
Even with these tools, your business is still legally responsible for record-keeping and ATO compliance. If you engage a bookkeeper or BAS Agent for payroll services, they can guide you and manage payroll, but the liability always sits with you, the employer.
What This Means for You
When your team or bookkeeper uses digital onboarding, remember:
- Records must be accurate and complete. Even if the employee entered their own details. Review TFNs for apparent errors (they should be nine digits). Confirm super fund status using the Super Fund Lookup. Cross-check other key information, such as bank accounts and birthdates, against onboarding forms or ID.
- Payroll records must be kept for five years from the date of lodgment. Onboarding documents such as TFN declarations, super fund choices, and contracts must be kept for five years after an employee leaves.
- Compliance documents such as agreements, award classifications, and job descriptions must also be on file.
- If an employee skips a step or makes an error, the business can still be held liable.
A Note on Tax File Numbers:
TFN declarations must be stored securely for a minimum of five years. TFNs are classed as sensitive information, so your business must protect them from misuse or unauthorised access under both ATO rules and the Privacy (TFN) Rule 2015.
Practical Steps for Business Owners
Even if you use payroll software or rely on employees to enter their own details, the responsibility for compliance stays with the business. To keep things on track:
- Set clear onboarding processes. Make sure every new employee knows what information they need to provide, why it matters, and how it will be used.
- Check the details. Review employee information before the first pay run. Look for errors in TFNs, bank accounts, dates of birth, and super fund details.
- Keep records secure and complete. Store TFN declarations, contracts, and super fund choices safely. These must be kept for at least five years after an employee leaves.
- Confirm your payroll system does the job. The software should save documents securely and be able to produce compliant pay slips if asked.
- Keep a paper trail. Save emails, notes, and reminders related to payroll and onboarding. They can be valuable if there’s ever a dispute or audit.
ATO Requirements
The ATO does not set rules about how businesses collect new employee information, but it is very clear on what must happen after the details are collected. Records must be complete, accurate, and maintained in a format that can be produced if the ATO requests them. For employers using onboarding software, this means checking that the system can generate compliant records, hold documents for the right period, and store them securely. The responsibility lies not with the software provider, but with the business to ensure the technology supports proper record-keeping.
Why It Matters
Strong onboarding is about more than avoiding fines or audits. It sets the tone for the employment relationship. When employees see their pay and tax details handled properly, it builds trust and prevents problems later.
Digital onboarding tools can make things smoother, but they are not a replacement for good compliance practices. With the right systems and support from your bookkeeper, you can protect your business and your employees.
