Payroll and benefits guide
Australia
CapitalCanberra
Fiscal Year1 July - 30 June
Date Formatdd/mm/yyyy
CurrencyAUD (Australian Dollar)
Payroll FrequencyMonthly
Employer Taxes12% – 18.85%
Employee Costs2%
Overview
- Languages
- English
- Income tax
- 0% – 45%
- VAT
- 10%
- Goods and Services Tax (GST); basic food and most health and education services are GST-free
Contributions
Employer
12%
Superannuation guaranteeOn qualifying earnings, paid each payday under Payday Super from 1 July 2026; subject to the quarterly maximum contribution base
0% – 6.85%
State and territory payroll taxDue only once total Australian wages pass the state or territory threshold; rates and thresholds differ by jurisdiction
Varies
Workers' compensation insurancePremium set by the state scheme or insurer based on industry and claims history
12% – 18.85%
Total employer costPlus workers' compensation premiums
Employee
2%
Medicare levyWithheld with income tax through PAYG; reduced or waived for low incomes
1% – 1.5%
Medicare levy surchargeOnly for higher earners without private hospital cover; settled in the annual tax return
2%
Total employee costExcludes income tax and any surcharge
Minimum Wage & Working Hours
- Minimum wage
- AUD 26.44 / Hourly
- National Minimum Wage from 1 July 2026 (AUD 1,004.90 per 38-hour week). Modern award rates rose 4.75% and often set a higher floor
- Standard working hours
- 38 hours per week for full-time employees, plus reasonable additional hours
- Award-free employees have no statutory overtime rate
- Overtime
- Set by the modern award or enterprise agreement; commonly 150% for the first 2–3 hours and 200% after
Leave
- Annual leave4 weeks per yearSome shift workers get 5 weeks; many awards add a 17.5% leave loading. Unused leave carries over and is paid out on termination
- Sick leave10 days per yearPaid personal and carer's leave; accrues progressively and carries over
- Parental leaveUp to 12 months unpaid, extendable by 12 monthsRequires 12 months of service. Government Paid Parental Leave covers up to 26 weeks for children born or adopted from 1 July 2026, at the national minimum wage rate
- Public holidaysAbout 10–13 daysNational plus state or territory holidays; staff who work them usually earn penalty rates
Termination
- Probation period
- No statutory probation; 3–6 months is common
- Notice period
- 1–4 weeks based on service, plus 1 week for employees over 45 with 2+ years of service
- Severance pay
- Redundancy pay of 4–16 weeks based on service; employers with fewer than 15 employees are generally exempt
- 13th salary
- Not mandatory
- Notes
- Employees past the minimum employment period (6 months, or 12 for small businesses) can bring unfair dismissal claims
Benefits
- SuperannuationMandatory
12% employer contribution to a retirement fund chosen by the employee
- Workers' compensationMandatory
State-based insurance for work-related injury and illness
- Private health insuranceCommon
Often offered so employees can avoid the Medicare levy surcharge
- Salary packagingCommon
Pre-tax arrangements such as extra super contributions or novated car leases
Visas & Work Permits
Skills in Demand visa (subclass 482)
- Duration
- Up to 4 years
- Requirements
- Approved employer sponsor, nominated occupation, and salary at or above the applicable income threshold
Replaced the Temporary Skill Shortage visa in December 2024
Employer Nomination Scheme (subclass 186)
- Duration
- Permanent
- Requirements
- Employer nomination, usually after time on a 482 visa, plus skills and English requirements
FAQ
Sources
Download free guide
Get the complete Australia payroll and benefits guide as a PDF.
How Can We Help?
Tell us who you want to hire or pay, and where. Our team will reply with next steps and a custom quote if you need one.