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Australia Hiring Employees Guide

Australian employer obligations. The guide covers: the PAYG withholding (the "Pay As You Go withholding") — the employer must withhold the PAYG tax from the payments to the employees based on the "tax tables" issued by the ATO; the employer must register for the PAYG withholding with the ATO before the first payment to the employee; the employer must provide the "income statement" (the "payment summary" — formerly the "group certificate") through the Single Touch Payroll (the "STP") by the 14 July of each year; the employer must withhold the PAYG at the rates based on the "tax file number declaration" (the "TFN declaration") and the "withholding declaration" (the "withholding declaration" — the "NAT 3093"); the employer must forward the withheld PAYG to the ATO through the BAS (the "Business Activity Statement") — the PAYG withholding is reported on the BAS and paid by the 21st of the month for the monthly lodgers or the 28th of the month for the quarterly lodgers; the Super Guarantee (the "SG") — the employer must contribute the SG at the rate of 11.5% (from 1 July 2025) of the "ordinary time earnings" (the "OTE") to the employee's superannuation fund; the SG is payable for the employees aged between 18 and 70 years (the age limit was removed from 1 July 2022 for the employees under 18 and over 70 who work more than 30 hours per week); the SG must be paid by the quarterly due dates — the 28th of the month after the end of the quarter (28 July, 28 October, 28 January, 28 April); the employer must offer the "choice of superannuation fund" (the "choice of fund" — the employee can choose the superannuation fund for the SG contributions); the employer must provide the "Standard Choice Form" (the "NAT 13080") to the eligible employees; the employer that does NOT pay the SG on time is liable for the "Super Guarantee Charge" (the "SGC" — the SG shortfall plus the interest at 10% per year plus the administration fee of $20 per employee per quarter); the SGC is NOT tax-deductible; the payroll tax (the "payroll tax") — the payroll tax is the state-based tax on the wages paid by the employer; the payroll tax is payable if the total Australian wages exceed the threshold (the "payroll tax threshold") for the state or the territory; the general thresholds for the 2025-26 year: (a) the New South Wales: $1.2 million annual wages (the "general threshold") with the rate of 4.55% on the excess, (b) the Victoria: $1.3 million (the "deductible amount") with the rate of 4.85% on the excess, (c) the Queensland: $1.3 million with the rate of 4.75% on the excess, (d) the Western Australia: $1 million with the rate of 5.5% on the excess, (e) the South Australia: $1.5 million with the rate of 4.95% on the excess; the payroll tax is administered by the "Office of State Revenue" (the "OSR") in each state; the employer must register for the payroll tax within 7 days of exceeding the threshold; the employer must lodge the monthly or the annual payroll tax return; the workers' compensation insurance (the "workers' comp") — the employer must obtain the workers' compensation insurance for the employees; the workers' compensation is the state-based system; the insurance covers the medical costs and the lost wages for the employees injured at the work; the employer must display the "workers' compensation poster" (the "workers' compensation notice") at the workplace; the Single Touch Payroll (the "STP") — the STP is the ATO system that requires the employer to report the payroll information (the salaries, the wages, the PAYG withholding, the superannuation) to the ATO at the time of each pay run; the STP applies to all employers from 1 July 2021; the employer must use the STP-enabled payroll software (the "STP-enabled software"); the employer must report through the STP by the pay day (the "pay day reporting"); the employer must provide the "income statement" through the STP (the employees can access the income statement through the myGov account); the employer record-keeping — the employer must keep the records for at least 5 years (the "record-keeping obligation"); the records include: (a) the employee's name, the address, and the date of birth, (b) the TFN declaration (the "NAT 3092"), (c) the withholding declaration (the "NAT 3093"), (d) the payroll records (the payslips, the payroll summaries), (e) the superannuation contribution records, (f) the leave records (the annual leave, the personal leave, the long service leave), (g) the workers' compensation insurance policy. All amounts in Australian Dollars (AUD). For related reading, see our Starting a Business Guide → and Superannuation Guide →.

PAYG Withholding

  • Registration: The employer must register for the PAYG withholding through the ATO Business Portal or the registered tax agent. The registration is free and takes effect from the date of the first payment to the employee. The employer must complete the "PAYG withholding registration" (the "NAT 3345").
  • Tax tables: The ATO publishes the weekly, the fortnightly, and the monthly tax tables (the "Schedule 1 — Tax tables for the PAYG withholding"). The employer must use the correct tax table based on the pay period and the employee's circumstances. The tax tables are available on the ATO website (ato.gov.au).
  • STP reporting: The employer must report the payroll information through the STP by the pay day. The STP reports the gross pay, the PAYG withheld, the superannuation, and the allowances. The employee can view the income statement in the myGov account.

For the superannuation guarantee and the choice of fund obligations, see our Superannuation Guide →.

Payroll Tax — State Thresholds

  • NSW — $1.2M / 4.55%: The payroll tax applies to the wages above $1.2 million annually for the 2025-26 year. The rate is 4.55% on the wages above the threshold. The payroll tax is administered by the Revenue NSW. The employer must lodge the monthly or the annual return.
  • VIC — $1.3M / 4.85%: The payroll tax applies to the wages above $1.3 million. The rate is 4.85% on the wages above the threshold. The regional employers in VIC pay the reduced rate of 4.25% on the wages above the threshold (for the employers with the regional wages of at least 85% of the total wages).
  • QLD — $1.3M / 4.75%: The payroll tax applies to the wages above $1.3 million. The rate is 4.75% on the wages above the threshold. The regional employers in QLD pay the reduced rate of 3.75%.

For the workers' compensation insurance and the employer obligations, see our Starting a Business Guide →.