Employing in Australia
Team APAC makes employment in Australia effortless. We handle payroll, compliance, contracts, and everything in between—all at unbeatable rates.
Onboarding time
Minimum Wage
Employer costs
Employee costs
Onboarding time
We can help you get a new employee started in Australia fast. The minimum onboarding time we need is only 48 hours.
Our team ensures fast, compliant employee onboarding and payroll processing. The onboarding timeline starts once the employee submits all required information via the Team APAC platform.
For non-nationals, a Right to Work assessment (if applicable) will extend the process by three days, with possible additional time for follow-ups. Please note:
Payroll cut-off dates may impact the first day of employment.
Minimum Wage
From 1 July 2024, the National Minimum Wage is $24.10 per hour or $915.90 per 38-hour week (before tax).
Employer costs
- 5.45% Payroll Tax (varies by state)
- 1.50% Accident Insurance (rate may vary)
- 11.50% Superannuation (capped at 30,000 AUD per year)
- 18.45% Total employer Cost*
Employee costs
- 2% Medicare levy
- 2% Total Employee Cost (exl. income taxes)
*The employer cost is generally estimated at roughly 16.35%-18.21% of the employee’s salary. However, the total charge may vary depending on the state the employee lives in.
Payroll
The payroll process in Australia involves several steps and regulations that employers must follow to ensure compliance with national laws and standards.
Payroll cycle
In Australia, common payroll cycles include weekly, bi-weekly, and monthly payments. There are no strict legal requirements for pay schedules, but typical monthly payments occur between the 28th and 30th of the month.
Calculating payroll involves determining gross pay, subtracting pre-tax deductions (such as superannuation), deducting taxes, and then subtracting after-tax deductions (like union fees).
Payment to local authority
ATO
- Small withholders up to AUD: 25,000 pa – 28 days from quarter end
- Medium withholders AUD 25,001- 1000,000 pa- 21 days from EOM
- Large withholders >100,000 pa – Monday/Thursday about 1 week from payment
- EFT/BPAY/Australia Post – can use wire as well
- AUD
Workers compensation
- Annually
- BPAY
- AUD
Super
- Monthly or quarterly.
- If quarterly, 28th day after the end of the each quarter
- Direct Debit/EFT/BPAY
- AUD
Additional payments
Other Allowances
It is common practice to provide an allowance to employees rather than purchasing health insurance plans on the employees’ behalf. This is to avoid paying relatively high fringe benefits tax.
Bonuses
Although not required by law, performance-based bonus schemes are common in Australia. About 34% of Australian professionals received a bonus. Bonuses typically range from 1% to 10% of the base salary, with decent bonuses averaging between 6% and 10%.
Taxes
Employers in Australia are required to pay payroll tax on wages, benefits, and superannuation contributions made to or on behalf of their employees. Australia utilises a progressive tax system, meaning that as taxable income increases, so does the tax rate.
Employee Income Tax
Employee income tax rates are standardised Australia-wide. Taxable income for individuals is taxed at progressive rates, ranging from 0 to 45%, in addition to a 2% Medicare levy. Depending on your income and whether you have private health insurance, you might also have to pay the Medicare levy surcharge.
Income Tax
- 0% 0 AUD – 18,200 AUD
- 16% 18,201 AUD – 45,000 AUD
- 30% 45,001 AUD – 130,000 AUD
- 37% 135,001 AUD – 190,000 AUD
- 45% 190,001 AUD and over
State payroll tax
ACT payroll tax
- 6.85% state payroll tax
- $2 million annual threshold triggering income tax
QLD payroll tax
- 4.75% for employers with $6.5 million or less in Australian taxable wages
- 4.95% for employers with more than $6.5 million in Australian taxable wages
- Regional employers may be entitled to a 1% discount on the rate until 30 June 2023
NSW payroll tax
- 4.85% state payroll tax
- $1.2 million annual threshold triggering income tax
NT payroll tax
- 5.5% state payroll tax
- $1.5 million annual threshold triggering income tax
SA payroll tax
- 4.95% where taxable income exceeds $1.5 million
- $1.5 million annual threshold triggering income tax
TAS payroll tax
- 4% where taxable income exceeds $1.25 millions
- 6.1% where taxable income exceeds $2 million
- $1.25 million annual threshold triggering income tax
VIC payroll tax
- 4.85% state payroll tax
- 2.425% for regional areas
- 1.2125% for regional bushfire affected areas
- $650,000 annual threshold triggering income tax
WA payroll tax
Until July 1, 2023, payroll tax in WA is calculated on a tiered rate scale that gradually increases the tax rate to a maximum of 6.5% for employers with annual Australian taxable wages of more than $1 million.
Employment eligibility
To be eligible to work in Australia, individuals must meet specific criteria based on their status or the type of visa they hold.
Visa
Here are the main groups eligible to work in Australia:
- Australian Citizens: They have an unrestricted right to work in Australia.
- Australian Permanent Residents: They also have the right to work without restrictions.
- New Zealand Citizens: Those holding a Special Category (subclass 444) visa can work freely in Australia. However, to become permanent residents, they must meet additional criteria, such as living in Australia for at least five years and meeting health and character requirements.
- Visa Holders – IIndividuals holding a valid Australian visa that includes work entitlements are also eligible to work. However, the specific work rights depend on the type of visa held
Visa types
- Temporary Skill Shortage (TSS)
- Working Holiday Subclass 417 & 462 Visa
- Training Visa Subclass 407 Visa
- Short Stay Specialist Subclass 400 Visa
- Sponsorship Licenses
Background check
Visa applications often require various types of background checks to ensure the applicant meets the necessary legal and security standards. Among these, police checks are mandatory for most visa categories, such as work visas and permanent residency.
These checks are designed to identify any criminal history that could pose a risk. For instance, individuals who have lived in Australia for 12 months or more within the past decade must undergo an Australian Federal Police (AFP) check, which examines Commonwealth police records for federal convictions.
Additionally, a National Police Check might be required for applicants who have recently moved to Australia or are applying for specific visa types. This involves a search of the national criminal record database in the applicant’s home country.
Another critical component is the character assessment, which relies on police checks to evaluate whether an applicant satisfies the character requirements outlined by Australian immigration laws.
Compliance documents types
- Proof of employment eligibility
- Fair Work Information Statement
- Tax file number declaration
- Passport / ID
- Bank Statement
- Superannuation (super) standard choice form
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Benefits
In Australia, various employee benefits are mandated by the National Employment Standards (NES) and other relevant legislation. Employers are required to contribute a minimum of 11.5% of an employee’s salary to their superannuation fund, with this rate set to increase to 12% by July 1, 2025. Employees are also entitled to specific leave entitlements, such as paid annual leave and paid sick leave per year. Additionally, employers must provide workers’ compensation insurance to protect employees against work-related injuries or diseases.
Private health insurance
Private health insurance in Australia is designed to cover healthcare costs not fully covered by Medicare, the country’s public healthcare system. It provides additional benefits and flexibility in healthcare choices
Team APAC providers
- SafetyWings
- Henner
- IMG/ ALC Global
Mandatory benefits
Medicare is Australia’s universal public health insurance system, which provides eligible individuals with access to free or low-cost medical services. Workers Compensation Insurance, on the other hand, is meant to cover employees who are injured or become ill due to their work.
This insurance provides financial support for medical treatment, rehabilitation, and lost wages while the employee is unable to work. As regards retirement, the Age Pension is a government-funded retirement income support for eligible Australians who have reached the qualifying age.
Last, the Superannuation Guarantee (SG) is a compulsory pension scheme where employers must contribute a percentage of an employee’s earnings to a superannuation fund. The Superannuation Guarantee is designed to help employees save for retirement.
Mandatory benefits in Australia
- Public Health Insurance (Medicare)
- Workers Compensation Insurance
- Age Pension
- Superannuation Guarantee Fund
Working hours
The standard workweek is 38 hours, the standard workday 7.6 hours. Employers may require employees to work additional hours if they are “reasonable.” Employers and employees may agree in writing to average their ordinary hours of work over as many as 26 weeks. Employers must consult employees regarding changes in working hours.
Working hours per day
The standard workday 7.6 hours.
Working hours per week
The standard workweek is 38 hours.
Overtime pay
Employers may require employees to work additional hours if they are “reasonable.” There are no federal or state laws setting a standard for overtime pay rates, which are established in collective bargaining agreements.
Leave
Other mandatory benefits include parental leave. Long service leave varies by state and territory but generally provides additional leave after a long period of service. Statutory leave entitlements include public holidays and other forms of leave as outlined in the Fair Work Act.
Annual leave
Full-time employees are entitled to four weeks of paid annual leave. There is no qualifying period that must be met to be eligible for annual leave. Leave accrues progressively during the year and can be accumulated from year to year. Employees are paid their base rate of pay when taking annual leave and may receive pay in lieu of taking vacation for any annual leave over four weeks.
Some companies provide 25 to 30 days of vacation per year as an additional benefit. Employees who have worked for the same employer for a number of years may be entitled to paid long-service leave. Casual employees do not receive paid annual leave.
Personal/Carer’s leave
Full-time and part-time employees receive 10 days of paid sick leave per year. Casual employees are not entitled to paid sick leave.
Parental leave
Employees are entitled to 12 months of unpaid parental leave, with the option to request an additional 12 months. Eligible employees may receive up to 20 weeks of paid parental leave at the national minimum wage.
Maternity leave
There is no specific statutory requirement for maternity leave, but The Paid Parental Leave Amendment 2022 amends the Fair Work Act 2009 to add two weeks’ father and partner pay to provide a single 20-weeks of paid parental leave, to be shared between each parent.
Beginning July 1, 2023, parents will be able to receive a maximum of 18 weeks’ parental leave pay each, and a maximum of 20 weeks’ parental leave pay between them.
Other types of leave
Long service leave
Australian employees are entitled to long service leave after a significant period working for the same employer. Long service leave laws are determined by each state or territory. These laws outline how long an employee has to be working with the same employer to trigger long service leave and how much leave is acquired.
Compassionate leave
All employees, including casuals, are entitled to compassionate leave of up to two days per occasion. However, only full-time and part-time employees receive paid compassionate leave, while casual employees receive unpaid leave. This leave may be availed in case of demise of an immediate family member, which includes spouses, de facto partners, children, parents, grandparents, grandchildren, siblings, and their equivalents for spouses or de facto partners.
Family & domestic violence leave
All employees covered by the national industrial relations system, including full-time, part-time, and casual are entitled to Family and Domestic Violence Leave of 10 days per year. It is a leave designed to support employees experiencing family and domestic violence.
This leave allows them to take time off work without losing income or their job, enabling them to address the impacts of violence safely. This leave does not accrue and resets annually on the employee’s work anniversary.
Some states offer additional entitlements. In South Australia, state and local government employees can access up to 15 days of paid leave annually.
Termination
Except when employees are guilty of gross or serious misconduct, employers must give notice before unilaterally terminating them. The legal minimum notice ranges from one week to four weeks, depending on the worker’s length of service. If the employer chooses to pay the employee instead of giving notice, it must pay the amount the worker would have earned had he or she worked until the end of the notification period.
Termination process
Terminations in Australia are complex and do not allow for at-will employment outside of the probation period. Employers must have just cause to terminate an employee. Compliant terminations can occur in several ways.
They can be voluntary, initiated by the employee, or by mutual agreement between the employer and employee. Employers can also unilaterally terminate employment during the probation period, based on objective grounds, or for disciplinary reasons.
Additionally, terminations can occur due to performance issues if an employee is deemed unsuitable for the job. Lastly, employment can end naturally with the expiration of a contract.
Termination reasons
In Australia, the grounds for terminating an employment contract are primarily governed by the Fair Work Act 2009. There are several valid reasons for termination. One of these is capacity, which involves situations where an employee lacks the ability to perform their job duties.
Another reason is performance, where employers can dismiss employees for unsatisfactory performance, but only after providing them with warnings and opportunities for improvement.
Misconduct is also a valid ground for termination, encompassing both serious and lesser forms. Serious misconduct, such as theft or assault, can lead to immediate termination without notice. In contrast, lesser misconduct requires a more formal disciplinary process. Lastly, redundancy is a valid reason for termination if a job is no longer needed due to operational changes, technological advancements, or business restructuring.
Notice period
The minimum notice period for employees is one week, with the duration increasing based on the length of employment. For those employed for less than a year, the notice period remains at one week. Employees who have been with the company for between one and three years are entitled to two weeks’ notice.
This increases to three weeks for those employed between three and five years. Once an employee reaches five years of service, they are entitled to four weeks’ notice. Additionally, there is a special provision for employees over 45 years old who have worked for the same employer for at least two years; they receive an extra week of notice.
Severance Pay
Severance pay is determined by the number of years an employee has worked at the company. Employees who have been with the company for less than a year are not eligible for severance pay. Those who have worked between one and two years receive four weeks of severance pay.
The amount increases to six weeks for employees with two to three years of service, and seven weeks for those with three to four years. Employees with four to five years of service receive eight weeks, while those with five to six years receive ten weeks.
The severance pay continues to increase: six to seven years of service yields eleven weeks, seven to eight years yields thirteen weeks, and eight to nine years yields fourteen weeks. Finally, employees who have been with the company for more than ten years are entitled to sixteen weeks of severance pay.
Probation period
In Australia, a probationary period is a common practice used by employers to assess new employees’ suitability for a role. This period is not mandatory but is often included in employment contracts to provide both parties with an opportunity to evaluate their compatibility.
Probation Period days
- 90 days Minimum probation period
- 180 days Maximum probation period
