Guide
A Guide to Running Payroll in Australia
Global payroll
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Managing payroll in Australia requires precise adherence to specific regulations like ATO requirements, Fair Work standards, and superannuation laws.
Mistakes can lead to penalties, affect employee satisfaction, and damage your business’s reputation—directors can even be held personally liable for their company’s unpaid superannuation guarantee amounts and Pay As You Go (PAYG) withholding tax.
In this guide:
This guide will provide you with a better understanding of what running payroll in Australia involves and how to strengthen your compliance at every step, with insight into:
- Local payroll and employment laws to know
- Key employee and employer details required to run payroll
- How an employee’s gross pay is calculated in Australia
- Payroll deductions and withholdings in Australia
- Payroll schedule options
- And more
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Who this guide benefits
- Finance and payroll teams seeking clarity on Australian payroll processes
- Expansion teams looking to understand payroll in Australia before entering the market
- Founders and CEOs seeking insight into Australia payroll costs
Disclaimer: Payroll costs and rates included in this guide are accurate at the time of publishing (2025) but are subject to change. Always confirm the latest rates and requirements before running payroll.
See also
FAQs
What are Australia’s minimum wage requirements?
The minimum wage is AUD $24.10 per hour or $915.90 per week as of July 2024. However, the minimum wage may be higher for specific industries. Australia’s minimum wage is projected to increase to approximately $25.20 per hour or $980.00 per 38-hour week.
What are the employer payroll costs in Australia?
Employer costs are generally estimated at 16.35%-18.21% of the employee's salary. However, the total charge may vary depending on location.
- Superannuation guarantee charge: 11.5%
- Workers cover: 0.14-1.0%
- Payroll tax: 4.95-6.85%
A mandatory fringe benefit tax will apply if healthcare benefits are offered to the employee, which amounts to 47% of the health insurance premium multiplied by a gross-up rate of 1.8.
How is superannuation calculated and paid?
Superannuation, often referred to as "super," is a compulsory system in Australia designed to help Australians save for their retirement.
The employer super contributions are calculated as a percentage of the employee’s gross taxable salary and are subject to a quarterly maximum of $6,849.70. When this contribution limit is reached, these contributions will cease until the next quarter.
The current rate is 11.5% as of July 1, 2024, and will rise to 12% on July 1, 2025.
What are the requirements for setting up payroll in Australia?
Setting up payroll in Australia requires employers to:
- Obtain an Australian Business Number (ABN)
- Register for PAYG withholding with the Australian Taxation Office (ATO)
- Choose a superannuation fund for compulsory employee super contributions
- Ensure they are compliant with the Fair Work Act
- Set up a system that meets the Single Touch Payroll (STP) reporting requirements
Download the guide for a full list of the most common employer requirements for payroll setup.
How do you pay employees in Australia?
Employers must pay employees at least monthly. The specific frequency—whether weekly, fortnightly, or monthly—is typically outlined in awards or agreements.
If not specified, the default requirement is at least monthly payments. Permissible payment methods include cash, cheque, money order, postal order, or electronic funds transfer (such as bank transfer).
Does Australia pay biweekly?
Australia does not mandate biweekly (fortnightly) payments. The payment frequency is determined by the relevant award or agreement, or defaults to at least monthly if not specified.
Who pays payroll tax in Australia?
In Australia, payroll tax is a state and territory tax on wages that employers pay to their employees.
Employers are required to register for payroll tax in the Australian Capital Territory (ACT) if their total taxable wages exceed the monthly threshold of $166,666.66, equating to $2 million annually.
Employers must apply to register within seven days after the end of the month in which they exceed this threshold.
