Payroll in Australia

This is only a short overview of payroll characteristics on Australia. More information on payroll issues in Australia – including information on superannuation, payroll tax, fringe benefits tax, payroll withholding methods, minimum wage, taxable amounts, employee share plans, holidays, bonus payments, recordkeeping laws and payroll forms – can be found in the Australia country primer.

The Commonwealth of Australia consists of six states (New South Wales, Victoria, Queensland, South Australia, Western Australia and Tasmania) and two territories (the Northern Territory and the Australian Capital Territory) as well as a number of small external territories, such as Norfolk Island.

Employers are responsible for withholding federal income taxes from employees, paying taxes on fringe benefits and accumulated payroll amounts (in states) and contributing to a retirement program called Superannuation. In addition, employers must uphold Australian wage and hour and wage payment laws that provide for minimum levels of compensation and other benefits.

The Australian currency is the Australian dollar.

Most foreign workers are treated the same as in-country employees for taxes and wages, but can be eligible for special exemptions. General criteria for determining tax residency and coverage under the labor laws apply, but there are exceptions and other calculations for taxes.

Australian residents working in the United States are covered by U.S. tax law with possible treaty and work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.
The Australian tax year is July 1 to June 30.

The federal government generally enacts laws relating to income tax, but states and territories also have power to levy taxes. In addition to federal taxes on income and fringe benefits, states have instituted taxes on payroll for employers.

The Australian Capital Territory (ACT)New South Wales, The Northern TerritoryQueenslandSouth AustraliaTasmaniaVictoria and Western Australia impose tax on remuneration paid to employees as well as service providers under contracts.

Employers are required to pay taxes on the assessed value of certain fringe benefits, called the Fringe Benefit Tax, or FBT.

Employers must pay a percentage of each eligible worker's ordinary time earnings each quarter into a complying superannuation fund or retirement savings account (RSA). Employers can claim a tax deduction for amounts paid.
Developments in Australia can be found in International Payroll News.

Other topics covered in our Australia country primer include:

Income Taxes

  • Coverage
  • Employees
  • Rates and Thresholds
  • Registration
  • Taxable Amounts
  • Withholding Methods
  • Returns and Remittances
  • Recordkeeping
  • Penalties

Social Taxes 

  • Coverage
  • Employees
  • Rates and Thresholds
  • Registration
  • Taxable Amounts
  • Withholding Methods
  • Returns and Remittances
  • Recordkeeping
  • Penalties

 Compensation and Benefits 

  • Minimum wage
  • Overtime
  • Holidays
  • Leave
  • Wage Payment
  • Bonuses and Special Benefits
  • Termination Pay
  • Workers’ Compensation
  • Recordkeeping

 Foreign Workers 

  • Visas
  • Taxes
  • Wages/Payments

Working in the U.S. 

  • Tax Residency
  • Income Taxes
  • Tax Treaties
  • Social Taxes
  • Totalization Agreements
  • Wage Payment

Treaty Arrangements

Resources

  *** More information on payroll issues in Australia –  superannuation, payroll tax, fringe benefits tax, payroll withholding methods, minimum wage, taxable amounts, employee share plans, holidays, bonus payments, recordkeeping laws and payroll forms – can be found in the Australia country primer.***


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