Payroll & Employment Guide: Australia

Hiring in Australia

If you plan to hire in Australia—whether for on-site roles or remote employees based in Australia—you must consider awards, enterprise agreements, Fair Work rules, taxation and superannuation requirements.

Key steps when hiring in Australia:

• Determine whether an industry or occupational award or enterprise agreement applies, as this affects minimum pay, penalty rates, allowances and hours.
• Issue a clear written employment contract and ensure it aligns with minimum entitlements under the National Employment Standards (NES) and any awards or agreements.
• Register as an employer with the Australian Taxation Office (ATO) for PAYG withholding and set up Single Touch Payroll (STP) reporting.
• Set up superannuation (Super Guarantee) contributions to complying funds and understand payment deadlines.

Learn more

Employee Benefits

Australian employers must provide statutory entitlements under the National Employment Standards and any award/enterprise agreement. Many employers go beyond minimums with market-leading benefits.

Mandatory Benefits:

• Annual leave: At least 4 weeks (20 working days) paid annual leave per year for full-time employees (pro-rata for part-time).
• Personal / Carer’s Leave & Compassionate Leave: Paid personal leave accrues annually; casual employees receive different entitlements or loading in lieu of some benefits.
• Public holidays: Employees are entitled to paid public holidays based on state/territory calendars and award/contract rules.
• Long service leave: State-specific long service leave entitlements apply once employees reach qualifying service thresholds.
• Superannuation (Super Guarantee): Employer must make mandatory superannuation contributions on eligible earnings at the SG rate.

Common Market Benefits:

• Salary packaging and novated car leasing.
• Private health insurance, EAP and wellness programs.
• Paid parental leave top-ups, additional annual leave, and flexible or hybrid working arrangements.
• Short-term and long-term incentive or bonus plans.

Get more benefits

Taxes in Australia

Employers in Australia operate Pay As You Go (PAYG) withholding on wages and remit the withheld tax to the Australian Taxation Office (ATO). Additional taxes may apply at state or federal level.

Key tax components:

• PAYG withholding: Employers deduct income tax from employee wages based on ATO tax tables and remit via Business Activity Statements or real-time through STP-enabled systems.
• Payroll tax: A state/territory-based tax on larger payrolls where the employer’s wages exceed the state payroll tax threshold. Rates and thresholds vary by jurisdiction.
• Fringe Benefits Tax (FBT): A separate federal tax on certain benefits provided to employees in place of salary (e.g., cars, low-interest loans). FBT has its own reporting and payment cycles.

Employers must keep records of wages, benefits and super contributions to support tax and payroll reporting obligations.

Payroll in Australia

Australian payroll combines PAYG withholding, superannuation, leave accruals, awards and Single Touch Payroll (STP) reporting obligations.

Payroll Currency & Cycle:
Payroll is run in AUD. Weekly, fortnightly and monthly pay cycles are all used, depending on industry and contract; the agreed frequency must be stated in the employment contract.

Payslips:
Employers must issue payslips within one working day of payday, showing:

• Gross wages, base rate and hours worked.
• Allowances, overtime, penalty rates and loadings (if any).
• PAYG tax withheld.
• Superannuation contributions (SG) for the period.
• Net pay and pay period dates.

Superannuation (Super Guarantee):
The Super Guarantee rate is 12.0% of ordinary time earnings for the period 1 July 2025 to 30 June 2026. Employers must pay SG to employees’ nominated complying funds by the due dates to avoid penalties.

PAYG & STP:
Employers report payroll data to the ATO through Single Touch Payroll (STP) each pay cycle and remit PAYG withholding in line with their BAS lodgement schedule.

Overtime & Penalty Rates:
Overtime and penalty rates are usually set by the relevant award or enterprise agreement. Typical scenarios include higher pay for weekends, nights, public holidays or hours beyond 38 per week.

Want help setting up compliant payroll, PAYG and super for your Australian team?

Learn more

Legal Regulations

Australia’s employment and payroll framework is primarily governed by the Fair Work Act, ATO legislation and state/territory laws for workers’ compensation, payroll tax and long service leave.

Key legal obligations for employers include:

• Complying with the National Employment Standards (NES) and any applicable awards or enterprise agreements.
• Maintaining accurate time and wage records and issuing compliant payslips.
• Using STP to report payroll and PAYG withholding to the ATO.
• Ensuring workers’ compensation insurance is in place in each state or territory where employees work.
• Implementing workplace health and safety obligations under state and federal WHS laws.

Total employment cost for Australian hires will include superannuation (12.0% for 2025–26), workers’ compensation premiums, leave loading (where applicable), penalty and overtime rates, and potentially payroll tax.

Learn more

Work Permits & Visas for Australia

If you are hiring non-Australian residents to work in Australia, you must comply with the Department of Home Affairs visa rules and sponsorship obligations.

Common employer-sponsored visa options:

• Skills in Demand (subclass 482) — an employer-sponsored temporary skilled visa pathway (replacing older TSS streams under recent reforms).
• Employer Nomination Scheme (subclass 186) — permanent residency route via employer nomination.
• Skilled Employer-Sponsored Regional (subclass 494) — regional visa options where applicable.
• Working Holiday Maker (subclass 417 and 462) — for younger workers on short-term or casual assignments.

Visa processing times and sponsorship rules have been reformed and can change. Employers should confirm current requirements with Home Affairs when planning overseas hiring.

Learn more

EOR & PEO Services in Australia

Using an Employer of Record (EOR) or Professional Employer Organisation (PEO) can help you hire in Australia quickly without building a full local HR and payroll operation.

Employer of Record (EOR) in Australia:
An EOR can:

• Provide compliant Australian employment contracts and act as the legal employer of record.
• Run payroll, withhold PAYG, remit superannuation and lodge STP reports.
• Administer statutory leave, workers’ compensation and local HR compliance.
• Support visa sponsorship and immigration administration where this service is offered.

PEO Services in Australia:
PEO providers are typically engaged by companies with an Australian entity who want to outsource HR and payroll functions.

Learn More

Payroll Calculator

Use Dhi ADT’s payroll calculator to estimate gross-to-net pay, employer superannuation (12.0% for 2025–26), PAYG withholding, and total employment cost for Australian hires. You can also factor in indicative payroll tax and workers’ compensation where applicable.

Go to Calculator