While Australia’s payroll may look complicated on the surface, many parts mimic payroll procedures in other countries. It is essential to understand every payroll law in the country to correctly compensate employees and stay compliant with all taxation rules.
Taxation Rules for Payroll
Before you set up Australia payroll, take a look at the country’s taxation laws.
Australia operates under a Pay as You Go system similar to Great Britain’s policy. Employers must withhold employee taxes, which should be paid to the government. Businesses are also required to present employees with a pay slip within one working day of getting paid.
You could potentially pay payroll taxes on benefits and superannuation — Australia’s retirement fund — in addition to wages. Every state levies their own payroll tax, so the percentage varies by location. Employers must also give 9.5% of employees’ gross salary to superannuation on a quarterly basis for employees making more than AUD$450 a month.
Australia Payroll Options
You have several different Australia payroll options to choose from.
- Larger companies may opt to pay employees themselves. Before you do this, you must set up a subsidiary, register your business, and hire additional staff to handle payroll and human resources issues. You will also need a keen understanding of tax, withholding, and other payroll requirements.
- You can also hire an Australia payroll processing company to administer your payroll. You remain the employer of record, so all issues related to taxation and compliance fall on your shoulders.
- Alternatively, you can work with a global PEO such as Globalization Partners. We hire employees on your behalf, handle the payroll, and even act as the employer of record.
Set up Australia Payroll
You cannot hire or pay employees without first setting up a subsidiary in Australia or working with a global PEO. Setting up a subsidiary can take months and could slow down the hiring process. Once you get set up, you’ll also need to establish at least one bank account in Australia. The majority of employees are paid electronically through bank transfers.
Australia’s tax laws state that all employees must get a pay slip within one working day of payment. This slip can be paper or electronic. The most common pay cycles are 12, 26, and 52, which you should keep in mind when setting up the frequency of pay.
Necessary Entitlement/Termination Terms
Employees are entitled to time off work including national public holidays, annual leave, and community service leave. You’ll also need to give employees ten days of sick or caregiver’s leave as needed.
The best way to establish termination terms is through a strong employment contract that sets a notice period and any severance pay employees are entitled to.
Instead of setting up Australia payroll yourself and figuring out the country’s employment laws on your own, you can work with a global PEO. Globalization Partners can act as an Australia payroll outsourcing company that can pay your employees and ensure your continued compliance with the country’s regulations. Contact us today to learn more!