Australia / Guides / How long Australian businesses keep records
Australia · guideHow long Australian businesses keep records
The short answer
Under Australian tax law, a business generally must keep records for five years from whichever is later: the date the record was prepared or obtained, or the date the transaction or act it relates to was completed. Records connected to a depreciating asset or a capital gains tax event run longer — for as long as the asset is held, plus another five years after it is sold or disposed of. Employee time and wage records sit under a separate obligation entirely: the Fair Work Act requires employers to keep them for seven years. Records can be kept electronically, provided they are a true and clear reproduction of the original, in English, and can be produced on request.
Key facts — verified dates on each
The five-year rule, and when the clock actually starts
The starting point for most Australian business record-keeping is the tax law's general requirement that a person carrying on a business keep records explaining every transaction relevant to that business, and retain them for five years. The five years does not run from a fixed calendar date — it runs from whichever is later: the date the record was prepared or obtained, or the date the transaction or act the record relates to was completed. In practice, for a routine expense, both dates usually fall close together, but for a record created ahead of a transaction that only finalises later, the clock starts at the later of the two.
A second, separate clock matters just as much as the first: the period of review, sometimes called the amendment period, for the tax assessment the record supports. If the Australian Taxation Office (ATO) can still amend an assessment because the review period for it is still open, the records that assessment relied on need to be kept for at least that long — even if the plain five-year count has technically passed. Most individuals and small businesses have a two-year review period; some entities and some situations (fraud or evasion being the clearest example) have a longer one, which pulls the effective retention period out past five years for those specific records.
The five-year period is a floor, not a ceiling. Nothing in the rule stops a business from keeping records longer, and for records that also matter for a later dispute, a warranty claim, an insurance question, or a sale of the business, keeping them past the statutory minimum is often the more practical choice even though it is not itself a compliance requirement.
What counts as a record
The ATO's definition of a business record is broad by design: any document that records and explains a transaction or other act relevant to the business. That covers the obvious items — invoices, receipts, contracts, bank and loan statements, cheque butts, and payment summaries — but it also covers less obvious ones: BAS calculation worksheets, GST-relevant tax invoices, records of asset purchases and disposals, and any working papers used to prepare a return or a business activity statement.
Records must be kept in a form that lets the business's tax position be readily worked out from them, and they must be in English, or readily accessible and convertible into English. A record that exists but cannot be produced, read, or reconstructed on request functions the same as no record at all for compliance purposes.
- Sales and income records — invoices, receipts, contracts, sale agreements
- Expense records — purchase receipts, supplier invoices, credit card and bank statements
- GST records — tax invoices, BAS working papers, import documentation
- Asset records — purchase price, dates, depreciation schedules, disposal details
- Governance and formation records — for companies, records that explain the entity's structure and decisions
Records that need to be kept longer than five years
A handful of record categories run past the standard five years because the event that starts the clock is delayed. Records relating to a depreciating asset generally need to be kept for as long as the business holds that asset, and then for a further five years after the asset is sold, scrapped, or otherwise disposed of — because the ATO could still query a claim about that asset's cost or effective life at any point while it remains in use.
The same logic applies to capital gains tax records. Records that establish the cost base of an asset — what was paid for it, and costs added to that base over time — need to be kept for the period the asset is owned, plus five years from the relevant CGT event (typically its disposal), because a capital gain or loss on that asset cannot be verified without them. For an asset held for a long time, this can mean records dating back well over a decade need to still be on hand at the point of sale.
A business that is selling or winding up also has its own record obligation: certain records need to be retained for five years after the business is sold or ceases operating, not five years from when each individual record was created, because a closing entity can still be the subject of a later ATO review.
Electronic records are acceptable
There is no requirement to keep paper originals. The ATO accepts electronic records, including scanned copies of paper source documents, provided the electronic version is a true and clear reproduction of the original. A blurred or partial scan that loses information present on the paper original does not satisfy the rule even though a copy technically exists.
Once a business has kept a true and clear electronic copy that meets that standard, the paper original can generally be discarded — the record-keeping obligation attaches to the information being retrievable and legible, not to the physical medium it started on. This matters practically for a business that wants to run entirely on cloud accounting software and digital receipt capture rather than a filing cabinet: it is compliant, as long as the digital versions are complete, accurate, and can be produced if requested.
Records still need to be kept in a way that is protected from being changed or damaged, and stored so that they can be retrieved within a reasonable time if the ATO asks for them. A backup and version-control practice for digital records is worth building deliberately, since a corrupted or unrecoverable file created no more protection than never having made the record at all.
Payroll and employee records: the separate Fair Work rule
Employee records sit outside the ATO's five-year tax rule entirely — they are governed by the Fair Work Act and enforced by the Fair Work Ombudsman, and the retention period is different: seven years. Employers must keep time and wage records for each employee for a minimum of seven years, calculated from the date the record was made or, where a record is later altered, from the date of that alteration.
What counts as a time and wage record under this rule is specific: general employment details (start date, employment basis), pay records (rate paid, gross and net amounts, deductions, superannuation contributions), hours worked (particularly for casual and part-time employees, and for any employee working overtime), leave balances and leave taken, and any individual flexibility arrangement or guarantee-of-earnings agreement in place. Records must be legible, in English, and kept for the full seven years even after an employee's employment ends.
This is an employer obligation independent of who runs payroll day to day. Whether payroll is processed in-house or through a bookkeeping provider, the seven-year retention duty and the requirement to produce records to an employee or a Fair Work Inspector on request sit with the employer as the entity legally responsible for the workforce; a bookkeeping or payroll support arrangement can keep the underlying records organised and retrievable, but does not shift where that legal responsibility sits.
- Minimum retention: 7 years from when the record was made, or from the date of its last alteration
- Applies to time and wage records for every employee, current or former
- Must be legible and in English; accessible to the employee and to a Fair Work Inspector on request
- A distinct obligation from the ATO's 5-year tax record rule — the two run on different clocks
Building a filing discipline that holds up over five to seven years
The practical failure mode in record keeping is rarely a single missing invoice — it is a system that worked for a year or two and then quietly stopped, leaving a gap that only surfaces when a record from that period is actually needed. A retention practice that survives multiple years tends to share three traits: records are captured close to the transaction rather than reconstructed later, they are stored in a system with automatic backup rather than a single local folder, and the retention period is tracked against the transaction date rather than left to memory.
Because the tax record clock, the CGT and depreciating-asset clock, and the Fair Work payroll clock all run on different rules and different start dates, mixing everything into one folder and one retention policy tends to under-retain the records that need to last longest — old asset and capital records in particular are the ones most often deleted early because they look stale, right before they are needed for a sale or a review.
The figures, and when we checked them
These numbers change by year or by notification. Each one shows the date we last verified it against the source — if that date looks old, check the source before relying on it.
Questions on this
How long do Australian businesses need to keep records?
Generally 5 years for tax and business records, counted from the later of when the record was prepared or obtained, or when the transaction it relates to was completed. Some records — those tied to depreciating assets or capital gains tax events — need to be kept for longer.
When does the 5-year clock actually start?
From the later of two dates: when the record was prepared or obtained, or when the transaction or act it relates to was completed. It is also worth keeping a record for as long as the ATO could still amend the assessment it supports, which for some entities or situations extends past the standard 5 years.
Can business records be kept electronically instead of on paper?
Yes. The ATO accepts electronic records, including scans of paper originals, as long as they are a true and clear reproduction, in English, and can be produced on request. Once a compliant electronic copy exists, the paper original does not need to be kept.
What actually counts as a "record" for tax purposes?
Any document that records and explains a business transaction or act — invoices, receipts, contracts, bank and loan statements, GST tax invoices, BAS working papers, and asset purchase and disposal documentation.
Do I need to keep records longer for equipment or other business assets?
Yes. Records for a depreciating asset generally need to be kept for as long as the asset is held, and then for a further 5 years after it is sold, scrapped, or otherwise disposed of, because the cost and effective life claimed on it can still be reviewed while the asset is in use.
What happens to record-keeping obligations when a business is sold or closed?
Certain records still need to be kept for 5 years after the business is sold or ceases operating, rather than 5 years from when each record was originally created, since the ATO can still review a closed entity within that window.
How long must employee records be kept?
Employee time and wage records must be kept for a minimum of 7 years under the Fair Work Act — a separate rule from the ATO's 5-year tax record requirement, administered by the Fair Work Ombudsman rather than the ATO.
What employee records does the 7-year rule cover?
Time and wage records: pay rates and amounts paid, hours worked (particularly for casual, part-time, and overtime situations), leave taken and leave balances, superannuation contributions, and any flexibility or earnings-guarantee agreements. Records must be legible, in English, and available to the employee and to a Fair Work Inspector on request.
Who is responsible for keeping payroll records — the business owner or the bookkeeper?
The retention obligation and legal responsibility sit with the employer, regardless of who processes payroll day to day. A bookkeeping or payroll support arrangement can keep the underlying records organised, but it does not shift where that legal responsibility sits.
What happens if business records are lost or destroyed, for example in a fire or a system failure?
Records need to be stored in a way that protects them from being changed or damaged, and kept retrievable within a reasonable time. A retention system without backup or version control carries a real risk that a lost record leaves the business unable to substantiate a past transaction if it is later reviewed.
Primary sources
- ATO — Overview of record-keeping rules for business
- ATO — Records you need to keep for longer than five years
- Fair Work Ombudsman — Record-keeping
- Fair Work Ombudsman — Record-keeping and pay slips fact sheet
Last reviewed 2026-08-14. Statutes and schedules change — the sources above are authoritative, this page is orientation.
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