Published: October 2025
Every Australian business owner faces the same question: how long do I really need to keep all these records? That box of receipts from five years ago, old invoices, payroll records, and bank statements - can they finally go?
Understanding record retention requirements isn't just about decluttering your office. The Australian Taxation Office has strict rules about what records you must keep and for how long. Getting it wrong can result in denied deductions, penalties, and significant stress during audits.
This guide explains everything Australian businesses need to know about record retention, from the standard five-year rule to important exceptions that might require keeping records much longer.
The foundation of Australian record retention is straightforward: you must keep most business records for five years.
This five-year period starts from when you prepared or obtained the record, or completed the transactions or acts the records relate to, whichever happens later. In practical terms, this usually means five years from the end of the financial year the record relates to.
For example, if you issued an invoice in June 2024, the five years starts from June 2024 or when the transaction was completed (typically when the invoice was paid). To keep it simple, most businesses count five years from the end of the 2023-24 financial year, meaning they can dispose of the record after 30 June 2029.
This five-year retention applies to a broad range of business records including:
The ATO's five-year rule aligns with the standard period they have to review and amend assessments. In most cases, once five years have passed, the ATO can no longer go back and adjust your tax position, which is why you no longer need to keep the records.
Understanding the connection between record retention and the ATO's amendment period is crucial. The period of review (also called the amendment period) is the time during which the ATO can amend your tax assessment, either because they identify an error or because you request an amendment.
For most businesses, this amendment period is two years from the date you lodge your tax return. However, it extends to four years in certain situations, such as when there's been an avoidance scheme or significant errors.
The ATO can't amend your assessment after the amendment period ends unless fraud or evasion is involved. However, they can only make amendments during the amendment period if you can provide the records to support your claims.
This is where the five-year retention rule provides a safety buffer. Even if your amendment period is only two years, keeping records for five years ensures you have documentation available if questions arise later or if you need to carry forward information to future tax returns.
While five years covers most situations, several circumstances require keeping records longer.
If your business makes a tax loss and you carry that loss forward to deduct against future profits, you must keep the records related to that loss until the later of:
For example, if your business made a $50,000 loss in 2023-24 and you carry it forward to deduct against profits over the next several years, you must keep the records that substantiate that loss until five years after you've fully used it.
If you made that loss in 2023-24 but didn't fully deduct it until 2027-28, you need to keep those records until at least 2032-33 - much longer than the standard five-year period from when the loss occurred.
This can create a record retention period of 10 years or more for significant losses carried forward over many years.
For assets that depreciate over time (like equipment, vehicles, or machinery), you must keep purchase records for the life of the asset plus five years after you dispose of it.
If you bought a vehicle in 2020 for $40,000, use it in your business for eight years, and sell it in 2028, you must keep the purchase records until 2033 - 13 years after the initial purchase.
This extended retention applies because:
If you acquire capital assets like investment property or shares, keep all purchase documentation for five years after you sell the asset and report the capital gain or loss.
The cost base of a capital asset includes not just the purchase price but also many associated costs like legal fees, stamp duty, and improvement costs. All these records must be maintained to correctly calculate your capital gain when you eventually sell.
For investment properties, this can mean keeping records for decades. If you buy a property in 2024 and sell it in 2044, you need to keep the purchase records until 2049 - 25 years after the initial purchase.
FBT records must be kept for five years from the date you lodge your FBT return, not from the date of the transaction. Since the FBT year runs from 1 April to 31 March, and returns are typically due on 21 May, this means slightly different timelines than income tax records.
For example, FBT records for the 2023-24 FBT year (1 April 2023 to 31 March 2024) must be kept until at least 21 May 2029 if you lodge on time.
If you amend an FBT return, the five-year period restarts from the date you lodge the amended return, potentially extending how long you need to keep records.
Records of superannuation contributions made for employees must be kept for five years from the date of the contribution, not from the end of the financial year.
If you make a super contribution for an employee on 15 April 2024, you must keep records of that contribution until at least 15 April 2029.
While the ATO requires five years retention for payroll records, Fair Work Australia requires employment records to be kept for seven years after employment ends.
This creates a conflict where you need to keep employee records for seven years to meet Fair Work requirements, even though tax law only requires five years. Always follow the longer requirement to ensure compliance with all obligations.
If your business operates as a company, the Australian Securities and Investments Commission requires you to keep financial records for seven years, regardless of ATO requirements.
This applies to companies registered under the Corporations Act 2001. ASIC has the power to impose significant penalties for failure to maintain adequate financial records, separate from any tax consequences.
The ATO's record retention requirements cover all documents related to your tax and superannuation affairs. This includes:
The ATO fully accepts digital records provided they are:
This means you can scan paper receipts, store electronic invoices, and maintain digital records in cloud accounting software. Many Australian businesses have moved to entirely digital record-keeping, which offers several advantages:
Modern accounting software like Xero, MYOB, and QuickBooks automatically maintains digital records within the system, making compliance easier. As long as you maintain your subscription and take regular backups, your records remain accessible for the required period.
Once the required retention period has passed, you can destroy records. However, good practice suggests documenting your destruction procedures:
Tax compliance sets the minimum retention period, but you might want to keep records longer for business reasons:
Business records contain sensitive information about your finances, customers, and employees. When you destroy records:
Failing to maintain adequate records creates several serious problems:
The ATO can disallow deductions if you can't provide adequate records to substantiate claims. The burden of proof sits with you to demonstrate expenses were incurred for business purposes.
Without proper records, you pay more tax than necessary because you can't prove your deductions were legitimate. Over multiple years, this can amount to substantial unnecessary tax payments.
If the ATO identifies that you've under-reported income or over-claimed deductions, they can impose:
These penalties multiply the cost of poor record-keeping significantly.
ATO audits become longer and more intrusive when records are inadequate or missing. The auditor must spend extra time reconstructing your financial position, extending the disruption to your business.
Poor records also create suspicion that may lead the ATO to expand the scope of the audit or look more deeply into other areas of your tax affairs.
Without good records, you miss legitimate tax planning opportunities, can't make informed business decisions based on accurate financial data, and struggle to obtain financing or sell your business.
Making record retention easy and automatic reduces the burden and ensures compliance:
Engage bookkeepers and accountants who maintain proper records as part of their service. Professional support ensures records meet ATO requirements and saves time dealing with compliance issues.
Never worry about record retention compliance again
Scale Suite provides comprehensive bookkeeping services that ensure all your business records are properly maintained, securely stored, and retained for the correct periods.
Our Sydney-based team handles:
We use certified platforms (Xero, MYOB, QuickBooks) that maintain comprehensive audit trails and digital records, ensuring you meet all ATO and ASIC requirements without stress.
As registered BAS Agents and members of Chartered Accountants Australia & New Zealand, we understand the compliance requirements and build them into our processes from the start.
Whether you need ongoing bookkeeping or assistance setting up proper record-keeping systems, ScaleSuite provides the expertise to keep your business compliant and your records accessible.
Book a free consultation to discuss how we can eliminate record-keeping stress from your business.
Can I store business records at home or do they need to be at my business premises?
Records can be stored anywhere in Australia provided you can produce them if the ATO requests them. Many businesses use home offices, storage facilities, or cloud-based systems. The key requirement is that you can access and provide the records within a reasonable timeframe when needed.
What happens if I've already thrown out records I should have kept?
If you've disposed of records within the retention period and the ATO requests them, explain the situation honestly. The ATO will assess the situation considering the circumstances and your cooperation. They may use alternative methods to verify your tax position, but you lose the ability to prove deductions were legitimate, which may result in adjustments to your tax.
Do I need to keep records in English?
Records can be kept in another language, but if the ATO requests them, you must provide an English translation at your expense. To avoid this cost and complexity, keep records in English where possible or translate them as you create them.
Can I keep just summaries instead of all the detailed records?
No. You must keep the source documents, not just summaries. The ATO requires the ability to verify information, which means keeping original invoices, receipts, and bank statements, not just spreadsheet summaries of the totals.
What if my accounting software company goes out of business?
This is why regular backups are essential. Download and save backups of all your accounting data at least annually in a format you can access outside the software. Most accounting platforms allow exporting data to standard formats like PDF or CSV that remain readable even if the software is no longer available.
Do I need to keep emails related to business transactions?
Yes, emails can be important records if they contain information about business transactions, agreements, or decisions that affect your tax position. Maintain emails that document business income, approve expenses, or establish the business purpose of transactions.
Can the ATO force me to keep records longer than five years?
For the standard five-year period, yes. However, if there are ongoing disputes, unresolved assessments, or if you're subject to investigation for fraud or evasion, the ATO can require records to be maintained until matters are resolved, which could extend beyond five years.
What's the penalty for not keeping adequate records in Australia?
The ATO can impose administrative penalties up to 20 penalty units (currently around $5,550) for failure to keep or retain required records. More seriously, inadequate records can lead to denied deductions and disallowed claims, resulting in significantly higher tax payments than necessary.
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