The Ultimate Payroll Compliance & Processing Checklist
Is Your Payroll Process Accurate & Compliant?
Payroll management is more than just paying employees on time. Ensuring compliance with Australian tax laws, Fair Work regulations, and Superannuation obligations is critical to avoid costly penalties and employee disputes.
Many businesses struggle with payroll complexities, from tax deductions and leave entitlements to Single Touch Payroll (STP) compliance and EOFY reporting. That’s why we’ve created this Payroll Compliance & Processing Checklist to help businesses stay on top of payroll requirements.
Employee Onboarding & Setup
Before processing payroll, it’s crucial to onboard employees correctly. Missing documentation or incorrect classifications can lead to compliance risks.
Collect Tax File Number (TFN) Declaration & Super Choice Form
Verify employment contract & award classification
Register employees in payroll software & set up correct pay rates
Ensure correct leave entitlements and compliance with Fair Work standards
Payroll Processing & Wages Calculation
Each pay cycle, businesses must accurately calculate wages, deduct taxes, and process superannuation contributions.
Record hours worked and apply the correct pay rates, allowances, and loadings
Deduct PAYG tax and process Superannuation Guarantee (SG) contributions (11.5% for 2024-25)
Process bonuses, salary packaging, and commissions
Leave Management
Properly tracking and managing leave accruals and entitlements prevents payroll disputes and ensures compliance.
Process leave accruals and apply leave loadings
Track leave balances (annual, sick, long service)
Manage parental, compassionate, and unpaid leave
Payroll Reconciliation & Compliance
To maintain payroll accuracy and avoid ATO penalties, businesses must reconcile payroll data and meet compliance obligations.
Reconcile wages, tax, and superannuation before each payroll run
Validate salary payments to ensure correct employee compensation
Ensure payroll tax compliance & report to state revenue offices
Submit Single Touch Payroll (STP) reports to the ATO every pay cycle
Employee Terminations & Final Payments
When an employee leaves, it’s critical to process final payments correctly and meet legal obligations.
Calculate final pay, tax on unused leave, and redundancy payments
Issue employment separation certificates
Report terminations via STP
End of Financial Year (EOFY) Obligations
EOFY is one of the busiest times for payroll professionals, requiring accurate reporting to the ATO and employee income statements.
Reconcile PAYG tax with BAS & finalize STP reporting
Provide Income Statements via MyGov for employees
Lodge Fringe Benefits Tax (FBT) returns (if applicable)
Adjust superannuation contributions to meet compliance
Payroll Audits & System Automation
Regular payroll audits help businesses stay compliant with Fair Work and National Employment Standards (NES).
Conduct payroll audits to identify errors and discrepancies
Automate payroll reporting & data storage for better security
Stay updated on legislative changes affecting payroll processing
Ongoing Payroll Management & Compliance
Beyond payroll runs, businesses must manage employee updates, payroll queries, and deductions.
Update employee details (bank accounts, tax changes, addresses)
Handle payroll queries from employees & managers
Process union fees, garnishments, and child support payments
Conduct internal payroll audits for discrepancies
Why Payroll Compliance Matters
Failing to comply with Fair Work Australia, ATO tax laws, or superannuation obligations can result in:
ATO penalties for PAYG tax errors
Fair Work disputes over incorrect pay rates
Superannuation guarantee charge (SGC) penalties
Payroll tax non-compliance fines
Staying compliant isn’t just about avoiding penalties—it’s about ensuring employees are paid correctly, taxes are lodged properly, and your business operates efficiently.
Want to ensure your payroll is error-free and fully compliant?
✅ Download our FREE Payroll Compliance & Processing Checklist and take the guesswork out of payroll management.
