Most Australian businesses need to keep their tax and super records for at least five years. The ATO's five-year clock generally starts from when you prepared or obtained the record, or completed the transaction, whichever is later. Some records need to be kept longer: depreciating assets and capital gains assets, carried-forward losses, employee time and wage records (seven years under the Fair Work Act) and, for companies, ASIC's seven-year requirement.
That's the short answer. The longer one matters because "keep everything for five years" sounds simple until you're staring at a shoebox of faded receipts, three bank accounts and a Xero file you inherited from your last bookkeeper. Below, we walk through what the ATO actually counts as a record, the five rules it expects you to follow, which records need to stay around longer, and how to set up a system that doesn't eat your weekends.
What counts as a business record?
The ATO says you're legally required to keep records of all transactions relating to your tax, super and registration affairs as you start, run, change, sell or close your business. In plain English, a record is anything that explains a transaction well enough for someone else (usually the ATO) to understand what it was and why it relates to your business.
According to the ATO's overview of record-keeping rules, a record generally needs to show:
- the date, amount and description of the transaction (for example, sale, purchase, wages or rent), plus the GST information
- the purpose of the transaction
- the relationship between the parties, where that's relevant.
You also need to keep documents that show any election, choice, estimate or calculation you make for tax and super, including how you worked it out. That catches things like your business-use percentage for a car or phone, or how you apportioned home office costs.
Common records most small businesses hold
- sales invoices, receipts and point-of-sale reports
- supplier invoices and tax invoices for purchases
- bank, credit card and loan statements
- payroll records, payslips, super contributions and Single Touch Payroll (STP) reports
- BAS and IAS workpapers, plus the reports used to prepare them
- asset purchase and sale documents
- contracts, leases and agreements
- motor vehicle logbooks and expense records
- records of money you take out of the business (drawings) or put in.
The ATO's five rules for record keeping
The ATO sets out five rules that apply to most business records. Here they are, without the legalese.
- Keep everything relevant. Any record connected to starting, running, changing, selling or closing your business that affects tax or super. If an expense is part business and part personal, keep something that shows the business portion.
- Don't change the records, and protect them. Records must be stored so they can't be altered or damaged. Electronic sales suppression tools (software that hides or deletes sales) are illegal. If you switch systems, you need to be able to reconstruct the original data.
- Keep most records for five years. More on the exceptions below.
- Be able to show them on request. If the ATO asks, you need to produce the records and explain your system. Digital records should be labelled or indexed, and if they're encrypted or password-protected you need to provide access. The ATO also expects to be able to convert your data into a standard format such as Excel or CSV.
- English, or easily converted to English. Simple, but it trips up some businesses with overseas suppliers.
The ATO also recommends checking the rules of every agency you deal with. Its own example: ASIC requires companies to keep records for seven years.
How long do you need to keep business records in Australia?
Here's the practical breakdown.
The standard rule: five years
For most records, the five years starts from when you prepared or obtained the record, or completed the transaction it relates to, whichever is later. So an invoice paid in March 2026 generally needs to be kept until at least March 2031.
When the five-year clock starts differently
The ATO lists a few situations where the start date moves:
- FBT records: five years from when you lodge the FBT return.
- Super contributions for employees: five years from the date of the contribution.
- Super fund choice records: five years from when the employee started, or when they were offered, chose or changed their fund.
Records to keep longer than five years
The ATO's page on records you need to keep for longer than five years covers the main ones:
- Depreciating assets (vehicles, tools, equipment, computers): generally for as long as you own the asset, plus five years after you sell or dispose of it. Different rules apply to low-value pools and rollover relief.
- Capital gains tax (CGT) assets (for example, a business premises or shares): generally for as long as you own the asset, plus five years after you dispose of it.
- Carried-forward losses: if you use a tax loss from one year in a later return, keep the records that worked out that loss until the period of review for the later return has ended.
- Amended assessments: keep records long enough to cover both the five-year period and the period of review (the amendment period) for the relevant assessment.
On top of the tax rules:
- Employee records: under the Fair Work Act, employers must keep time and wage records for seven years. That includes pay, hours (including overtime), leave, super contributions and termination details.
- Companies: ASIC requires companies to keep financial records for seven years.
If you're unsure how long a specific record needs to stay, especially anything to do with CGT, losses or business restructures, check with your tax agent or accountant. That's income-tax territory, and the right answer depends on your situation.
A simple rule of thumb
If you don't want to think about it every time: keep everything for seven years, and keep asset records for as long as you own the asset plus five years. It's not a legal rule in itself, but it covers the most common requirements for small businesses with staff or a company structure, and digital storage makes it cheap.
Do you need to keep paper receipts?
Usually not. The ATO's digital record-keeping guidance says it accepts digital images of paper records, as long as they're true and clear reproductions of the originals and they meet the five rules. Once you've saved a clear image, you generally don't need to keep the paper unless a particular law requires it.
Two catches worth knowing:
- Typing the numbers into Xero isn't the same as keeping the record. The ATO is clear that if you enter details from a receipt into your accounting software, you still need to keep a copy of the actual receipt, digitally or on paper. Attach the image to the transaction.
- Thermal receipts fade. That little supermarket or servo docket can be blank within months. Snap it the day you get it.
Tax invoices and GST credits
If you're registered for GST, record keeping and your BAS are joined at the hip. To claim GST credits on purchases over $82.50 (including GST), you generally need a valid tax invoice. The ATO's tax invoice requirements say invoices for sales under $1,000 must show, among other things, the seller's identity and ABN, the date, a description of what was sold, and the GST amount. For sales of $1,000 or more, the buyer's identity or ABN must also appear.
Digital invoices are fine. A PDF emailed to you counts, as long as it has all the required details. If you're not sure your supplier invoices pass the test, that's exactly the kind of thing a registered BAS agent checks before your BAS goes in.
Who is responsible if records go missing?
You are. The ATO's guidance on accountability for business record keeping says the business owner keeps primary accountability, even if an employee, bookkeeper, or registered tax or BAS agent handles the records day to day.
That's not meant to scare you. It just means it's worth knowing where your records live and making sure you can still get to them if you change bookkeepers or software.
What happens if you don't keep proper records?
If the ATO reviews your business and finds your records aren't accurate and complete, the Commissioner can direct you to complete an approved record-keeping course or impose a financial penalty. The course is online, and you generally have 28 days to finish it. The ATO says it takes your circumstances, compliance history and behaviour into account before deciding on a penalty.
Beyond penalties, poor records cost you in quieter ways: missed deductions and GST credits, BAS figures you can't back up, and a much slower, more stressful process if the ATO does come asking.
Behind already? No judgement. We've seen it all. Our catch-up bookkeeping process rebuilds missing records from bank statements and supplier portals, then gets your BAS back on track. Get a free quote or call 0404 877 436.
How to set up a record-keeping system that actually works
You don't need a filing cabinet or a complicated process. Here's a setup that works for most small businesses.
- Use cloud accounting software. Xero (or MYOB or QuickBooks) with live bank feeds means every transaction is captured automatically. The ATO itself recommends digital record keeping where possible.
- Attach a source document to every transaction. Photograph receipts or forward supplier emails into your software so the record sits right next to the transaction.
- Keep business and personal separate. A dedicated business bank account and card make your records far cleaner and your business-use percentages easier to prove.
- Reconcile weekly or monthly. Little and often beats a quarter's worth of mystery transactions the week your BAS is due.
- Back up, and know how to export. If you change software, the ATO says to download a complete copy of any records stored in the cloud before you lose access. We see this one bite people during migrations, which is why it's in our MYOB to Xero migration guide.
- Document your workings. Keep logbooks, home office calculations and any business-use estimates with a note on how you worked them out.
- Run a health check. The ATO's free record keeping evaluation tool gives you a quick read on how you're tracking.
How Girl Friday Australia helps
We're a registered BAS agent and Xero Certified Advisor and Gold Partner, working with small businesses, sole traders and tradies Australia-wide, remotely. Record keeping is the foundation of everything we do:
- Bookkeeping from $250/month: bank reconciliations, supplier and sales processing, payroll and super, and monthly reports, with source documents attached as we go.
- BAS and IAS lodgement from $180/quarter: we check GST coding and tax invoices before anything goes to the ATO.
- Xero setup from $400 one-off: chart of accounts, bank feeds, receipt capture and training so your records stay tidy between our check-ins.
- Catch-up bookkeeping: months or years behind, scoped after an assessment.
There are no lock-in contracts, and we reply within one business day. For anything beyond BAS-agent scope, such as income-tax planning, CGT or business structure advice, we'll point you to a tax agent or accountant.
Frequently asked questions
How long should a small business keep receipts in Australia?
Generally five years from when you obtained the receipt or completed the transaction, whichever is later. Receipts for depreciating or CGT assets need to be kept for as long as you own the asset plus five years after you dispose of it.
Can I throw away paper receipts once I've scanned them?
Generally yes. The ATO accepts digital copies if they're true and clear reproductions of the originals and meet its five record-keeping rules. Once you've saved a clear image, you don't have to keep the paper unless a particular law requires it.
How long do I need to keep payroll and employee records?
Seven years for time and wage records under the Fair Work Act. Super contribution records also need to be kept for at least five years from the date of each contribution under tax law, so the seven-year Fair Work rule usually covers both.
Do sole traders have to keep the same records as companies?
The ATO's five rules apply to all businesses, including sole traders. Companies also have ASIC's seven-year requirement for financial records. Sole traders with simple affairs can use the free ATO app to record income and expenses.
Is my bookkeeper responsible if my records are wrong?
The ATO says the business owner keeps primary accountability for record keeping, even if a bookkeeper or registered BAS agent does the work. A good bookkeeper will keep your records accurate and complete, but it's worth understanding your obligations and knowing where your records are stored.
What happens if I can't find old records the ATO asks for?
Talk to your BAS agent or tax agent early. Missing records can often be partly rebuilt from bank statements, supplier portals and emails. If the ATO finds your records aren't accurate and complete, it can direct you to a record-keeping course or apply a financial penalty, and it considers your circumstances and history when deciding.
The bottom line
Keep most records for five years, employee and company records for seven, and asset records for as long as you own the asset plus five years. Store them digitally, attach them to your transactions, and make sure you can export them if you ever change software.
If your records are already in good shape, brilliant. If they're scattered across inboxes, glove boxes and old software, we can help you sort it out without the lecture. Book a free discovery call, get a free quote, call 0404 877 436 or email info@girlfridayaustralia.com.