How to comply with Australian payroll regulations

As a business that employs workers in Australia, you’ll need to comply with various payroll regulations.  

It’s important for all businesses with employees to comply with Australian payroll regulations to avoid penalties for non-compliance.  Failure to comply with payroll laws could lead to serious consequences including interest charges, fines, loss of government funding and even criminal charges.

The main areas of payroll compliance for any business that has employees are minimum pay rates, paying employee superannuation, Single Touch Payroll (STP) and payroll tax reporting.  

We cover these areas in our small business guide below:

The Fair Work Act 2009 sets out minimum pay requirements for Australian employers. Minimum wage rates in Australia depend on an employee’s age, experience and industry.  There are two general categories for an employee’s minimum pay:

1. Specific award rates apply to employees who are covered by an industry-specific ‘award’.  An award is a legal document containing minimum rates of pay and employment conditions for specific skill levels and industries.  Examples of common awards include:

  • The General Retail Industry Award for retail employees
  • The Hospitality Industry (General) Award for hospitality employees
  • The Building and Construction General On-site Award for construction.

2. All employees in Australia who are not covered by a specific award, are entitled at least the national minimum wage which is reviewed at least annually.

Employers need to make superannuation contributions to an employees’ nominated super account if you pay a worker wages or salaries.  You’re an employer if you pay casual, part-time or full-time workers.  You may also have to pay the super guarantee to contractors.  You can find out more about superannuation guarantee eligibility from the official Australian Tax Office (ATO) website.  

Single Touch Payroll (STP) reporting is a program designed to make payroll compliance easier for Australian employers.  Employers must use cloud software that is approved by the Australian Taxation Office (ATO) to report payroll electronically and in real-time.  
Under STP reporting, payroll information includes all workers’ personal details including names, and tax file number, and pay information like salary or wages, and superannuation contributions.  
To comply with STP, employers must use a STP compliant software like Payroller for regular reporting and register it with the ATO.  Learn how to choose the most suitable STP system to suit your specific business needs with our tutorial.     

Some employers in Australia need to comply with individual state and territory payroll tax laws.  Whether you’d need to register for and accurately pay payroll tax depends on specific payroll tax thresholds.  Payroll tax calculations depend on the total amount of wages and salaries paid by an employer.  Therefore, payroll tax compliance typically applies to larger employers versus small businesses.

Note that even if your business doesn’t have any employees and therefore, no payroll obligations, you’d need to report certain information regularly to the ATO. This information may include business income, business expenses and GST (goods and services tax).

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