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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 Personnel files and record keeping (NZSTA website). 		7 years
Holidays and leave, including source documents clearly showing either direct entry into the payroll, or sending to Education Payroll for processing 7 years
Pay deductions 7 years
KiwiSaver 7 years
Workplace accidents and ACC Keep indefinitely/sent to Archives NZ after 10 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 Some sections of your personnel files should be kept for 7 years while other sections keep indefinitely/sent to Archives NZ after 10 years 
Full personnel records for past employees Some sections of your personnel files should be kept for 7 years while other sections keep indefinitely/sent to Archives NZ after 10 years 

A clear description of the minimum retention and disposal requirements for personnel records can be found under Archiving and disposing of school records (Education.govt.nz)

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 payroll-related employee records for seven years after the last date of employment.

Privacy of information

You have a legal responsibility, under the Privacy Act 2020, to keep employees' personal and pay information confidential.

Of the 13 information privacy principles under the Privacy Act 2000, two are very important for payroll. 

  • Principle 1 Purpose for collection: states that organisations must only collect personal information if it is for a lawful purpose connected with their functions or activities, and the information is necessary for that purpose. This principle is about data minimisation.

  • Principle 5 Storage and Security of Information: states that organisations must ensure there are safeguards in place that are reasonable in the circumstances to prevent loss, misuse or disclosure of personal information.

Employees' access to their information

Under the  Privacy Act 2020, 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.

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