Awards, Wages & Super (AU)
What you must pay, withhold, and report when you employ in Australia.
Notes from Randall Harper. Thirty years working alongside owner-operators, executives and boards — companies of all types and sizes — across entertainment & media, hospitality, service based business, lifestyle businesses, financial services, retail and not-for-profit, in Australia, Asia, the United Kingdom and the United States. What follows is the thinking I keep returning to.
Awards are the floor, not a suggestion
Most Australian employees are covered by a Modern Award that sets minimum wages, allowances, overtime, penalty rates, and conditions. Awards are not negotiable downward — you can pay more, never less. Identifying the correct award for each role is the first step in setting up a compliant payroll, and getting it wrong is one of the most common sources of unintended underpayment.
What you must do, every pay run
- Pay at or above the award rate for hours actually worked.
- Pay applicable penalty rates and overtime, if any.
- Withhold PAYG tax according to ATO tables and the employee's TFN declaration.
- Calculate and accrue super on ordinary time earnings.
- Provide a payslip within one working day of payment.
- Report the run through Single Touch Payroll on or before pay day.
Super is non-negotiable and rising
The Superannuation Guarantee rate is increasing toward 12% and is paid on top of wages, not out of them. Super must be paid to each employee's chosen fund quarterly, by the due date. Late or unpaid super attracts the Superannuation Guarantee Charge, which is not tax-deductible and is one of the harshest penalties in the system. Pay it monthly even though it is due quarterly — the cashflow discipline is worth it.
Leave, properly accrued
Full-time and part-time employees accrue annual leave, personal leave, and long service leave from day one. The accruals must be tracked, shown on payslips, and paid out on termination. Most payroll software handles this automatically if set up correctly; the trap is in the setup, not the maths. Check the leave accruals against the award when each employee starts.
Get help with the setup
An hour with a bookkeeper or payroll specialist to set up payroll correctly — right award, right pay rates, right STP configuration, right super defaults — is one of the highest-leverage investments a first-time employer makes. Once set up properly, the system runs itself. Set up badly, it produces errors quietly for years.
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The contents of this paper are the opinion of Clear Point Advisory only. Readers should rely on their own judgement and obtain professional advice appropriate to their circumstances.