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Mercans CountryIntel ® Australia Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Australia

Australia offers a business-friendly environment that is stable, low-risk and dynamic. A great investment destination, Australia maintains strong trading relationships with major markets around the world which helps it expand its global presence. A service-based economy, Australia’s exports are underpinned by five key industries: resources, energy, agriculture, tourism and education.

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Doing Business in Australia

Australia’s strong economic fundamentals and its location within the Asia Pacific provides a wealth of opportunities. This is supported by a robust economic, legal and regulatory framework. Additionally, the state and territory governments provide a range of support and tools to assist investors to set up and run their business in Australia. Such support may range from grants, employee training, R&D tax incentives, project facilitation and more.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Australia is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: 9.30 am to 4:00 pm from Monday to Thursday

Working Week

The standard working week is from Monday to Friday from 7:00 am - 4:30 pm

Labor Law

Australian labor law has a dual structure whereby some employment issues are governed by the Federal government and others may be governed by state and territory laws. The primary statute regulating labor is the Workplace Relations Act 1996. Australian courts, both State and Federal, interpret legislation but also apply the common law. The central elements of Australia’s employment system includes a set of national standards of employment for all Australian employees, occupational health and safety regulations and superannuation (pension) payments.

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Main Industries

Finance, Business Consulting, Metals & Mining, Energy & Utilities, Healthcare

GDP Growth

3.90

Dates & Numbers

dd/mm/yyyy

Official State Name

The Federation of Australia

Population

25.69 million

Capital

Canberra

Major Languages

English

Currency

Australian Dollar

Internet Domain

.au

International Dialing Code

+61

Australia
Canberra, AU
9:20 pm, December 2, 2022
16°C
broken clouds

Payroll

Organizations who operate multi-county payroll should be aware that Single Touch Payroll (STP) is applied in Australia. STP streamlines the way employers report tax and superannuation information to the Australia Taxation Office (ATO). It simplifies administration for employers, wherein reporting aligned with business processes such as payroll cycles. Companies will also likely need to register for payroll withholding before beginning to pay employees (this is referred to as Pay As You Go PAYG). Payroll tax is the tax businesses are required to pay on payroll and is applied according to thresholds related to weekly payroll expenses. Payroll tax rates are also entirely dependent on state requirements.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 7 years

Reports

Employees receive paid annual leave of 30 days

Annual Leave

Employees receive paid sick leave of 10 days

Sick Leave

12 months of unpaid maternity leave and 5 days of unpaid paternity leave

Maternity & Paternity Leave

7 days

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

20.33 AUD per hour

Minimum Wage

Overtime payment of 1.5x the employee's ordinary rate of pay for the first 3 hours of overtime

Overtime

Employees paid monthly are entitled to 15 days’ pay for each year of employment for the first five years of service

Severance Pay

Tax and Social Security

Most major business taxes such as income tax are collected by the government through the Australian Taxation Office (ATO). In some cases, state-based taxes also apply, commonly for payroll tax. Centrelink social security payments and services are delivered to Australians by Services Australia, who is responsible for the delivery of accessible social, health and child support services and payments.

Tax

Australia holds a number of tax treaties with more than 40 countries to prevent double taxation of foreign entities operating in Australia.

30%

Corporate Income Tax

45%

Personal Income Tax

10%

Sales Tax

10%

VAT

Social Security

The social security system provides individuals with a minimum adequate standard of living and the transfers are income support payments and payments to families including age and other pensions. Concession cards provide additional assistance.

11.5%

Social Security Rate

9.5%

Social Security Rate for Employers

2.0%

Social Security Rate for Employees

Employment Law

Employment laws apply to foreign nationals who are employees based in Australia, regardless of whether the employer is based in Australia or overseas. Employment laws apply to nationals based in Australia and in some circumstances, the laws may also apply where the employee is engaged in Australia but performing work for an Australian employer abroad.

Employment Agreement

The employment relationship is primarily governed by the law of contract under Australian law but there is no statutory requirement to enter a written employment contract. Collective agreements (also known as enterprise agreements in Australia) can also be made under the Fair Work Act.

Working condition

The National Employment Standards (NES) provides for a maximum of 38 hours unless the additional hours are reasonable (it is common for employers and employees to agree on what this means). Enterprise agreements typically contain provisions that regulate the hours of work.

Leaves

Under the NES, full-time employees are entitled to four weeks of paid annual leave per year. Casual employees are not entitled to annual leave. Additionally, employers can require employees to take paid annual leave in some circumstances.

Employment termination

Employees must be provided with the minimum statutory notice period and if permitted by their employment contract, a payment may be made in lieu of notice.

7 days

Minimum notice period for terminating an employee

7

Total number of public holidays

40

Working hours per week

2 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Individuals working in Australia require a visa that suits the work that they intend to do. Various visas are available to address regional migration, permanent work, temporary work, short stays, skilled occupation and visa for innovation.

Residency permits

There is a number of different permanent work visas available including regional visas for skilled migrants to live and work in regional Australia, skilled migration visas, business investment visas as well as Global Talent visas (for those who have an internationally recognised record of exceptional and outstanding achievement in an eligible field).

Work Permit validity

Four years

Required Documents

Records of a completed medical examination

Written confirmation that character requirements are met

Demonstration of competent English proficiency

Possess three years of relevant work experience

Aged 45 years or less

Confirmation that the individual has read or been given an explanation of the Life in Australia booklet

Signed the Australian Values Statement

Compliant, reliable, error-free and touchless payroll in Australia

Build the best team and hire top talent compliantly in Australia. Get in touch with Australia payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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