As an employee, one of the most essential aspects of managing your finances is making sure you are getting paid accurately. Your payslip, which is a breakdown of your wages, deductions, and entitlements, plays a critical role in ensuring that you are being compensated fairly for the work you perform. Despite its importance, many employees tend to overlook their payslips, assuming that the figures are always correct or simply not taking the time to review them closely. However, regularly checking your payslips is one of the most vital practices you can adopt to protect your financial interests and employment rights.
At Fraser & Associates Lawyers, we understand how complex employment law can be. We’ve seen first-hand how often employees are underpaid, misclassified, or even incorrectly taxed due to errors or, in some cases, intentional oversight.
In this blog, we’ll discuss why it’s crucial to regularly check your payslips and the potential consequences of not doing so.
- Ensuring Accurate Payment of Wages
The most obvious reason to review your payslips is to ensure that you’re being paid the correct amount for the work you do. Pay discrepancies can happen for various reasons, including administrative errors, system glitches, or misunderstanding between the employer and employee regarding the terms of employment.
If you notice a mistake on your payslip, such as an incorrect number of hours worked, an underpayment, or missing overtime pay, addressing it promptly can save you from losing out on your rightful earnings. Regularly checking your payslips allows you to spot these issues early, reducing the risk of financial distress and unnecessary confusion.
- Understanding Deductions
Another crucial aspect of reviewing your payslips is understanding the deductions that are made from your earnings. In many cases, these deductions are for taxes, superannuation, and other mandatory contributions like student loan repayment. However, there may also be voluntary deductions like health insurance, union dues, or repayment of salary advances.
It is essential to ensure that these deductions are being made in accordance with your legal entitlements and agreed-upon arrangements. For instance, if your employer is not contributing the correct amount to your superannuation fund, this could significantly impact your long-term financial security. Likewise, if there are discrepancies in tax withholding, you might end up owing more tax than expected come the end of the financial year.
- Confirming Legal Entitlements and Benefits Under the Fair Work Act
Payslips are not just about wages and deductions—they also serve as a record of whether your entitlements under the Fair Work Act are being applied correctly. These entitlements include annual leave, personal (sick) leave, and long service leave accruals, which are fundamental to your employment rights.
For example, under the Fair Work Act, full-time and part-time employees are entitled to 4 weeks of paid annual leave for each year of service, as well as 10 days of paid personal leave (also known as sick leave). These entitlements accumulate over time, so checking your payslips regularly allows you to ensure that these leave accruals are being tracked accurately.
Similarly, long service leave in Western Australia that may vary depending on your length of service and the nature of your employment. For most workers, long service leave accrues after 10 years of continuous employment with the same employer, but it’s important to verify that this is being tracked correctly, which can be done if the LSL is recorded on your payslip.
By keeping an eye on your payslips, you can ensure that your employer is meeting their obligations to provide these crucial entitlements and that they’re being correctly accrued and reflected in your pay.
- Spotting Payroll Fraud
Unfortunately, in rare cases, employees may fall victim to payroll fraud. This is when an employer deliberately withholds or misrepresents wages, superannuation contributions, or other payments. Fraudulent activity could involve underreporting hours worked, incorrectly classifying your employment type (e.g., casual vs. full-time), or failing to provide entitlements such as overtime pay.
By regularly reviewing your payslips, you are more likely to detect payroll fraud early. The quicker you spot such issues, the sooner you can take steps to resolve the problem, including reporting the matter to relevant authorities or seeking legal advice.
- Financial Planning and Budgeting
Your payslip provides a detailed overview of your income and deductions, giving you a clearer picture of your financial situation. By reviewing your payslips regularly, you can track changes in your income, tax withholdings, and any other adjustments that may impact your budget. This insight helps you make better financial decisions, whether it’s planning for big purchases, saving for the future, or paying off debts.
Moreover, by ensuring that your wages and deductions are correct, you are more likely to avoid any unexpected financial surprises, such as a large tax bill due to incorrect tax withholding.
Conclusion
Regularly checking your payslips is an essential part of protecting your financial well-being as an employee. It helps ensure that you are paid accurately, that all legal deductions are made, and that you receive your full entitlements under the Fair Work Act, including annual leave, personal leave, and long service leave accruals. Furthermore, it allows you to spot potential issues such as payroll fraud or non-compliance with employment law before they escalate.
By staying vigilant and reviewing your payslips regularly, you can take control of your finances and avoid unpleasant surprises. And if you ever have concerns or questions about your payslips or your entitlements, don’t hesitate to seek professional advice from employment law experts like those at Fraser & Associates Lawyers. We’re here to ensure that your rights as an employee are protected and that you receive the wages and benefits you’ve earned.
Contact Fraser & Associates Lawyers today to learn more about your employment rights and how we can assist you in resolving any wage-related issues.