A Guide to Running Payroll in Australia

Considering hiring employees in Australia? Learn about choosing pay schedules, managing deductions, selecting a payroll provider, and more.

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In this guide:

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.

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
  • 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

Who will benefit from this guide

  • 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

Don't let payroll complexities stress you out. Deel Global Payroll simplifies payroll with automated calculations, tax compliance, and easy paycheck distribution. Whether you're operating in Australia or expanding globally, Deel has you covered. 

Download your free guide today.

FAQ about running payroll in Australia

What are Australia’s minimum wage requirements?

The minimum wage is AUD $23.23 per hour, or $3825,46 a month. However, the minimum wage may be higher for specific industries. 

What are the employer payroll costs in Australia?

Employer costs are generally estimated at 16.4-18.5% of the employee's salary. However, the total charge may vary depending on location.

Learn more in our guide to hiring employees in Australia.

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%. The rate will rise to 11.5% on July 1, 2024, and again 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 Pay As You Go (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.

Disclaimer: Payroll costs and rates included in this guide are accurate at the time of publishing (May 2024) but are subject to change. Always confirm the latest rates and requirements before running payroll.