Payroll in Australia

Mercans is your premier partner for top-quality payroll services in Australia, offering both Managed and SaaS solutions. Our steadfast commitment to delivering exceptional payroll outsourcing in Australia is unmatched. Drawing from extensive experience in the payroll sector, Mercans ensures precise and compliant payroll services, establishing us as the preferred option for businesses of all sizes. Count on Mercans for prompt and accurate payroll transactions, complemented by the convenience of multi-currency payments tailored to the Australian market. As your dedicated local payroll provider in Australia, we feature a team of in-country payroll specialists well-versed in local regulations, providing comprehensive assistance for a seamless payroll experience customized to your business requirements.

Payroll Services in Australia

At Mercans, our unwavering commitment to local compliance in Australia goes beyond a mere checklist. We proactively navigate the intricate regulatory landscape — including the shift to “Payday Super,” now in force since 1 July 2026 — ensuring your business aligns seamlessly with the country’s norms. Here’s an insight into how Mercans expertly manages key activities, safeguarding both compliance and operational efficiency:

Comprehensive Services Include

Payroll Settlement

• Precise calculations encompassing PAYG withholding, superannuation, Medicare levy, and other deductions.
• Inclusion of overtime, allowances, and award or enterprise agreement entitlements.
• Pay-run-by-pay-run preparation of Single Touch Payroll (STP) data for lodgement with the Australian Taxation Office (ATO).

Payment Processing

• Generation and delivery of payslips.
• Efficient management of superannuation contributions, now paid in line with each payday under the Payday Super regime.
• Streamlined handling of payroll receipts and banking interfaces.

Regulatory Compliance

• Thorough preparation and lodgement of Single Touch Payroll (STP) Phase 2 reporting for every pay event.
• Accurate PAYG withholding calculations and remittance according to your employer withholding category.
• Ongoing monitoring of Fair Work Commission wage reviews, superannuation reforms, and state payroll tax changes.

Superannuation & Reporting

• Payday Super contribution processing within the required 7-business-day window of each payday.
• STP finalisation declarations at financial year-end.
• Expert management of state and territory payroll tax obligations across multiple Australian jurisdictions.

Minimum Wages in Australia

Australia’s national minimum wage is reviewed annually by the Fair Work Commission, effective from the first full pay period on or after 1 July each year. From 1 July 2026, the National Minimum Wage is AUD 26.44 per hour, or AUD 1,004.90 per week (based on a 38-hour week) — the first time it has exceeded AUD 1,000 per week.

Working Hours

The standard working week in Australia is 38 hours, regarded as ordinary hours under the National Employment Standards. Hours worked beyond this may attract overtime pay, penalty rates, or time off in lieu (TOIL), depending on the applicable award or enterprise agreement.

Payroll Cycle & Payday Super in Australia

Salaries in Australia are typically paid weekly, fortnightly, or monthly depending on the employer’s payroll cycle and the applicable award or agreement. Every pay event must be reported to the ATO via Single Touch Payroll (STP) on or before payday.

Australia’s superannuation system underwent a landmark change on 1 July 2026: under the “Payday Super” reform (Treasury Laws Amendment (Payday Superannuation) Act 2025), employers must now pay Superannuation Guarantee contributions in line with each payday rather than quarterly, with contributions required to reach the employee’s super fund within 7 business days of payday. This is a live, current obligation as of this reform’s effective date, not an upcoming change, and represents a significant shift in payroll cadence for employers operating in Australia.

Company Registration in Australia

When establishing a business presence in Australia to run local payroll, foreign companies typically choose from the following structures, both registered with the Australian Securities and Investments Commission (ASIC):

Setting up and maintaining either structure — including the ongoing corporate compliance obligations that come with them — requires dedicated legal and administrative resources. Mercans’ Employer of Record and Global Payroll solutions allow companies to hire and pay employees in Australia without first establishing either of these entities.

Employer Registration for Payroll in Australia

Running compliant payroll in Australia requires several registrations:

• Australian Business Number (ABN): An 11-digit identifier obtained via the Australian Business Register, required for tax reporting, superannuation, and payslips.
• PAYG Withholding Registration: Employers must register for Pay As You Go (PAYG) withholding with the ATO before making their first payment to an employee.
• Single Touch Payroll (STP) Phase 2: Mandatory for all employers, requiring each pay event to be reported through ATO-recognized digital payroll software, disaggregating gross pay, allowances, paid leave, and other components in detail.
• Business Bank Account: Requires the company’s ABN, incorporation documents, and identity verification for directors and signatories, with foreign-language documents requiring certified translation and notarization or apostille.

Payroll Taxes in Australia

Personal Income Tax in Australia

The Australian Taxation Office (ATO) collects income tax from Australian residents on a progressive basis. Following a legislated tax cut effective 1 July 2026, the second income tax bracket dropped from 16% to 15%, with a further reduction to 14% legislated to take effect from 1 July 2027.

Medicare Levy

Most Australian residents also pay a Medicare levy of 2% of taxable income, funding the national healthcare system, with reduced or nil levy thresholds available for lower-income earners and a Medicare Levy Surcharge applying to higher-income earners without adequate private hospital cover.

Tax Reporting

PAYG withholding remittance frequency depends on the employer’s annual withholding amount: small withholders (up to AUD 25,000/year) pay quarterly via activity statement, generally due the 28th of the month following the quarter; medium withholders (AUD 25,001–1,000,000/year) pay monthly, due the 21st of the following month; and large withholders (over AUD 1,000,000/year) must remit electronically within 6–8 days of each withholding event. Every pay run must also be reported via STP on or before payday, regardless of withholding category.

Superannuation in Australia

The Superannuation Guarantee (SG) rate reached its final legislated level of 12% of ordinary time earnings from 1 July 2025, calculated up to an annually indexed maximum contribution base (AUD 270,830 per quarter for 2026–27). As described above, contributions must now be paid in line with each payday under the Payday Super reform, reaching the employee’s fund within 7 business days, rather than the previous quarterly cycle.

State and Territory Payroll Tax in Australia

In addition to federal PAYG withholding, Australian states and territories separately levy payroll tax on total wages once an employer’s wages exceed the relevant state threshold — a distinctive feature of Australian payroll compliance, particularly for employers with staff across multiple states.

Employers that are part of a corporate group, or that pay wages across more than one state, must generally aggregate wages across related entities and jurisdictions for threshold purposes — a common compliance trap Mercans helps clients navigate.

Termination Payroll in Australia

On termination, an employee’s final pay must include any unpaid wages up to the last day worked, payment in lieu of notice where applicable, accrued and unused annual leave, unused long service leave where applicable, and redundancy pay where the termination is a genuine redundancy. There is no single national statutory deadline for final pay — timing is often set by the applicable award or enterprise agreement, commonly within 7 days of the last working day; where nothing is specified, Fair Work Ombudsman guidance recommends paying no later than the employee’s next regular payday.

Australia Compliance Requirements

Employee Benefits in Australia

Mercans, in adherence to Australian labor laws under the National Employment Standards, ensures that employees receive the right benefits by staying vigilant about statutory entitlements.

• Superannuation: Employers must contribute 12% of an employee’s ordinary time earnings to a superannuation fund, now paid in line with each payday under the Payday Super regime.
• Paid Time Off (PTO): Full- and part-time employees are entitled to a minimum of 20 days of paid annual leave each year.
• Personal/Sick Leave: Statutory paid personal leave is provided under the National Employment Standards, with additional entitlements often set by the applicable award.
• Parental Leave: Government-funded parental leave schemes are available, with many employers also offering additional paid parental leave.
• Long Service Leave: Employees generally accrue long service leave after an extended period of continuous service, with entitlements varying by state.

Benefits of Payroll Outsourcing in Australia

For our payroll services, we have strategically implemented a robust tool designed to seamlessly operate across diverse countries, ensuring regional uniformity and meeting the specific requirements of our clients. This tool reflects our commitment to delivering:
Stringent Data Security Measures
Incorporating industry-leading security measures to safeguard sensitive data, including compliance with GDPR, SOC, ISO, and OWASP standards. ISO 27001 and ISAE3402 certifications ensure adherence to stringent information security protocols, guaranteeing the highest level of data protection.
Consistent and Sustainable Performance
Ensuring reliable performance that meets the dynamic demands of payroll services, providing clients with consistent and sustainable solutions, even as Australia’s payroll cadence shifts under the Payday Super reform.
Flexibility and Scalability
Offering flexibility and scalability to accommodate evolving client needs and adapt to changing business environments, ensuring seamless integration and expansion.
Collaborative Cloud Platform
Utilizing a cloud-based platform that facilitates collaborative work, promoting efficiency and accessibility across teams, enhancing collaboration and productivity.
Key Features of Electronic Payroll Support

• Full Traceability: Enabling a traceable process from generation to transmission and validation, ensuring transparency and accountability at every step.
• Efficiency in Human Resources: Enhancing the efficiency of the human resources area by streamlining the payroll settlement process, resulting in significant time savings and improved resource allocation.
• Certified Suppliers: Partnering with certified suppliers who uphold the highest standards of information security with ISO 27001 certification, ensuring secure data transmission processes and bolstering the integrity of our services.

Payroll Solutions in Australia

Uncover the potential of seamless payroll processing in Australia with Mercans’ Global Payroll Solutions. Our flexible models ensure local compliance, support multi-currency transactions, and offer connectivity to global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Paying correctly has never been more straightforward.
Explore Our Flexible Models

• SaaS (Software as a Service): Tailored for enterprise businesses managing multi-country payroll with intricate complexities arising from diverse data points, locations, currencies, and languages. Our SaaS model streamlines operations for optimal efficiency.
• Managed Services: Designed for mid-sized and large enterprise businesses, our Managed Services model caters to those operating multi-country payroll. It provides on-demand HR expertise, ensuring security, reliability, and compliance across the board.
• HRMS (Human Resource Management System): Perfect for mid to large businesses in expansion mode, our HRMS model offers a comprehensive range of functionalities, including payroll and benefits. Businesses can select the specific features they need, ensuring a tailored and efficient solution.

Streamline Payroll with Mercans’ Technology and Integrations

Mercans leads the way in providing top-tier payroll solutions in Australia, offering a diverse range of tailored options to meet our clients’ unique needs. Choose Mercans as your reliable ally, ensuring a smooth and effective payroll process in Australia’s dynamic business environment.

• Cutting-Edge Technology: Explore the forefront of innovation with Mercans’ state-of-the-art technology, driving our global payroll solutions.
• Seamless Integrations: Effortlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing connectivity and efficiency.
• Recognized Excellence: Partner with an esteemed organization known for its commitment to excellence in delivering outstanding payroll services.

Outsource to Payroll Company in Australia

In the dynamic business landscape of Australia, Mercans stands as a beacon of excellence, offering tailored solutions to meet the diverse needs of our clients. With a stable economy, sophisticated regulatory environment, and strategic position in the Asia-Pacific region, Australia presents attractive opportunities for business expansion — alongside genuinely complex, fast-evolving payroll requirements, from Payday Super to state-based payroll tax. Mercans is your trusted partner in navigating the complexities of the Australian market. Our unwavering commitment to 100% local compliance, coupled with our extensive knowledge of Australian labor laws, ensures that businesses establish a solid presence in Australia with ease. By choosing Mercans, companies can leverage our expertise to streamline operations, adhere to statutory requirements, and lay the groundwork for sustained growth in this dynamic environment. With Mercans by your side, embark on a journey of success and prosperity in Australia’s thriving business landscape.