A Guide to Running Payroll in Australia (2026)

Hiring in Australia gives you access to a world-class talent pool, but it also brings you face-to-face with one of the most complex regulatory environments in the world. Between the Fair Work Act, Modern Awards, and the move toward Payday Super, the "set it and forget it" approach to payroll doesn't exist here.

This free guide acts as your roadmap, helping you navigate everything from Tax File Numbers (TFN) to the nuances of Single Touch Payroll (STP) reporting. Whether you’re a startup founder or a People Ops leader, we’ve distilled the complexity into actionable steps so you can focus on growth, not paperwork.

Australian payroll guide overview

Running payroll in Australia requires a deep understanding of the legal frameworks that govern how employees are paid, how records are kept, and what taxes must be managed. Failure to comply can lead to significant penalties, and directors can even be held personally liable for unpaid superannuation or withholding tax.

Inside this guide, you’ll find:

• A step-by-step roadmap for employer and employee onboarding
• Breakdown of the National Employment Standards (NES) and Modern Awards
• Updated 2025–2026 resident tax rates and Medicare levy surcharges
• Guidance on the 12% Superannuation Guarantee (SG) and the 2026 shift to Payday Super
• Best practices for compliant recordkeeping and tax documentation
• A guide to choosing the right payroll schedule (weekly, fortnightly, or monthly)
• How to handle deductions for Fringe Benefits Tax (FBT) and workers' compensation

Who is this payroll guide for

We designed this resource for:

• Finance and People Ops leaders in growth-stage companies needing to standardize payroll across Australian entities
• Expansion teams looking to understand the financial implications and labor laws before entering the Australian market
• HR generalists looking to support equitable, consistent pay decisions while navigating the complexities of Modern Awards
• Founders and CEOs seeking a clear picture of total employment costs, including mandatory contributions and insurance
• Payroll administrators who need to ensure their systems are ready for the shift to Payday Super in July 2026

Deep dive: Understanding the Australian regulatory landscape

The guide provides a look at the Fair Work Act 2009, which sets the standards for wages and employment conditions. You will learn about the ten minimum entitlements under the National Employment Standards (NES), which apply to all employees in the national system.

We also break down the concept of Modern Awards—industry-specific standards that outline minimum terms of employment. Understanding whether your employees are covered by an Award or an Enterprise Agreement is critical for calculating overtime and penalty rates correctly.

How to use the Australia payroll guide

This tool is designed to guide you through building clear, consistent payroll processes, even if you’re not a local expert.

Step 1: Gather your business essentials

Before you hire your first employee, you must have your business registrations in order. The guide provides a checklist of the key pieces of information you need, including:

• Your Australian Business Number (ABN) and Tax File Number (TFN)
• Registration for Pay As You Go (PAYG) withholding with the ATO
• Selecting a default superannuation fund and registering for the SuperStream system
• Securing mandatory workers' compensation insurance

Step 2: Onboard employees compliantly

Accurate payroll starts with accurate data. We outline the specific details you must collect from every new hire, from their TFN Declaration to their superannuation fund choice (or identifying a "stapled" fund). The guide also covers the mandatory distribution of the Fair Work Information Statement.

Step 3: Classify your workforce and set schedules

Australia offers flexibility in pay cycles—typically weekly, fortnightly, or monthly. However, certain Awards may dictate specific pay days. This guide can help you determine the best schedule for your cash flow while staying within legal requirements.

Step 4: Calculate pay and deductions

The guide provides updated tax tables for the 2025–2026 financial year. You'll learn how to calculate:

• Gross Pay: Including base salary, bonuses, and commissions
• Medicare Levy: The standard 2% levy and applicable surcharges for high earners
• Superannuation: Managing the 12% contribution rate and the maximum contribution base
• Overtime: Understanding the standard 150% and 200% rates often found in Awards

Step 5: Master recordkeeping

In Australia, you must keep comprehensive payroll records for seven years. We provide a full list of what must be included—from leave balances to termination details—to ensure you are always ready for a Fair Work inspection.

Pro Tip: From 1 July 2026, the Superannuation Guarantee must be paid on the same day as salary and wages. Employers should start auditing their cash-flow processes now to ensure they can support this move from quarterly to per-pay-cycle remittances.

Get your Australian payroll guide today

Running a business in Australia is a major milestone, but payroll shouldn't be the thing that keeps you up at night. Whether you are managing a small team or a large enterprise, this guide ensures your Australian operations are built on a foundation of compliance and accuracy.