Legal requirements for payroll records

Schools need to keep records for certain periods of time to comply with legal requirements in tax, education and other legislation. School records, including employees' pay records, are also subject to privacy legislation.

Records retention and disposal

By law, you must keep anything that relates to:

Records Minimum retention period
Wages and time records; for example:
  • employee time sheet records
  • pay changes including salary rates, school initiated allowance changes, new employees, terminations, change of funding (MoE Teachers Salaries, Operations Grant or other)
  • manual payments made by the school, including reconciliation into the payroll
  • payroll errors (overpayments and underpayments) including resolution
  • source documentation authorising employee bank account changes
See Holidays and Wage and Time Records (NZSTA website).
6 years
Holidays and leave, including source documents clearly showing either direct entry into the payroll, or sending to Novopay for processing 6 years
Pay deductions 7 years
KiwiSaver 7 years
Workplace accidents and ACC 7 years
Tax code declarations, special tax code or deduction rate certificates, and tax details for contractors or self-employed 7 years
Full personnel records for current employees 7 years
Full personnel records for past employees 7 years after last date of employment

 

A clear description of the minimum retention and disposal requirements for personnel records can be found in Section 3. Personnel in the School Records Retention/Disposal Schedule (Ministry of Education website).

Although in some cases shorter retention times may apply, it is recommended that you keep financial records for seven years from the end of the related financial year, or employee records for seven years after the last date of employment.

Privacy of information

You have a legal responsibility, under the Privacy Act 1993, to keep employees' personal and pay information confidential.

See Guidelines for Boards of Trustees (Privacy Act 1993) (NZSTA website) for more information.

Of the 12 information privacy principles under the Privacy Act 1993, two are very important for payroll. For the full details of these principles, see Information Privacy Principles (Ministry of Justice website).

  • Principle 1 relates to 'lawful purpose'. An employer must have lawful purpose to ask for information, collect information and retain information. If there is no actual business purpose or there is no legislation stating that it must be provided, then the employer does not have a lawful purpose. 
  • Principle 5 is all about security. Your must ensure employee information is stored securely, either in a lockable cabinet, a lockable office, or both, with set policy on who can access employee files.

Employees' access to their information

Under the Privacy Act 1993, if an employee requests access to their personal file, the employer has 20 working days to do this. It is recommended that you do not allow employee records to leave the office.

Related links

Resources:

Information for:

Ministry of Education website: