Payroll Guide: Australia

OS HRS takes care of your multi-country payroll with local regulatory expertise. From Australia, across Asia Pacific and beyond, we are the payroll partner of global leaders. Not sure where to start when it comes to multi-country payroll? Here’s our quick payroll guide for your Australia business operations.

Overview of payroll in Australia

What are the steps to set up payroll in Australia?

Payroll in Australia involves a number of compliance requirements, including the calculation and withholding of taxes, social security contributions, and other deductions. Here are the steps to set up payroll in Australia:

1. Obtain an Australian Business Number (ABN): The first step in setting up payroll in Australia is to obtain an Australian Business Number (ABN) from the Australian Business Register. An ABN is a unique 11-digit identifier that is used for tax and other business purposes. You must also register for PAYG withholding at the same time.

2. Register for a Tax File Number (TFN): All employees in Australia need a Tax File Number (TFN), which is a unique identifier issued by the Australian Taxation Office (ATO). As an employer, you need to register for a TFN as well.

3. Decide on Payroll Frequency: The next step is to decide on the frequency of payroll processing. In Australia, payroll is typically processed on a weekly or fortnightly basis.

4. Collect Employee Information: To set up payroll, you need to collect employee information, such as name, address, TFN, bank account details, and salary structure.

5. Calculate Salary and Deductions: Once you have collected employee information, you need to calculate salaries and deductions based on the salary structure. Deductions can include income tax, superannuation (super), and other benefits.

6. Register for Superannuation: Superannuation is a retirement savings program in Australia, and as an employer, you are required to contribute a percentage of your employees' salaries to a super fund. You need to register for a super fund and make regular contributions on behalf of your employees.

7. Generate Pay slips and Bank Transfer: After calculating salaries and deductions, you need to generate pay slips for employees and transfer their salaries to their bank accounts.

8. Lodge Activity Statements and Single Touch Payroll set up: Finally, you need to lodge activity statements with the ATO and update monthly lodgments with Single Touch Payroll with the ATO. These statements & lodgments report the tax and other deductions made from employee salaries, as well as your own tax obligations as an employer.

It is important to note that setting up payroll in Australia can be complex, and it is recommended to seek professional advice or engage a payroll outsourcing company like OS HRS to ensure compliance with local regulations.

What do you need to know about Australia Payroll?

Employer Contributions in Australia

What do you as an employer need to make in employer contributions?

Employer contributions vary by state in Australia, we share the contributions required in Victoria below:

Employee Income Taxes in Australia

What are the income tax rates in Australia?

*The below do not include the Medicare levy of 2%

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Last updated September 2024