Pay at least the correct award rate, or the National Minimum Wage of $24.95/hour ($948/week) from 1 July 2025 if no award applies.
Superannuation guarantee is 12% of ordinary time earnings for FY2025-26 (up from 11.5%), paid from the first dollar earned and at least quarterly.
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Casual employees get a 25% loading in lieu of paid leave, taking the casual National Minimum Wage to $31.19/hour from 1 July 2025.
Every pay run must be reported to the ATO via Single Touch Payroll Phase 2, and a compliant payslip issued within one working day of payment.
Avoid the costly errors: underpaying awards (now a possible criminal offence), late super (non-deductible SGC), poor record-keeping and misclassifying employees as contractors.
To pay an employee in Australia you must pay at least the correct award (or National Minimum Wage) rate, withhold PAYG tax from their gross pay, pay 12% on top, issue a compliant payslip within one working day, and report it all to the ATO via Single Touch Payroll. Get those five things right every pay run and payroll becomes a predictable, minutes-per-week task. Get them wrong and you risk back-pay, Fair Work penalties and the non-deductible Super Guarantee Charge.
Most employees in Australia are covered by a Modern Award — a legal document that sets minimum pay rates, overtime, penalty rates, leave entitlements and other conditions. If no award or enterprise agreement applies, the National Minimum Wage is the floor: $24.95/hour (or $948.00 per 38-hour week) from 1 July 2025. Award rates almost always sit above this, so check the award first.
Casual — no guaranteed hours, receives a 25% casual loading instead of paid leave. The casual National Minimum Wage (base plus loading) is $31.19/hour from 1 July 2025.
Important: You can't just call someone casual if they work regular, predictable hours. Under Fair Work's casual employment rules, eligible employees can notify you that they want to change to permanent employment after a qualifying period — so classify carefully.
Every employer must pay super guarantee (SG) contributions for eligible employees.
Current SG rate (FY2025-26): 12% of ordinary time earnings, up from 11.5%. This is the final scheduled increase — 12% is the long-term rate.
Key rules:
Pay super at least quarterly (within 28 days after each quarter ends).
Employees choose their own fund — if they don't nominate one, request their stapled super fund via ATO online services before defaulting them anywhere.
Super applies from the first dollar earned — the old $450/month threshold was abolished in 2022.
Super is payable on ordinary time earnings (OTE) — base pay, commissions and most shift loadings, but generally not overtime.
Quarter
Period
Super Payment Due
Q1
1 Jul – 30 Sep
28 October
Q2
1 Oct – 31 Dec
28 January
Q3
1 Jan – 31 Mar
28 April
Q4
1 Apr – 30 Jun
28 July
Late super triggers the Superannuation Guarantee Charge (SGC) — the shortfall plus interest plus a $20-per-employee-per-quarter admin fee, and none of it is tax-deductible. Note that the government has announced "Payday Super" (super paid at the same time as wages) to start from 1 July 2026, so quarterly batching is on its way out — paying super each pay run now is good practice.
STP is mandatory for all employers. Every pay run, your software reports to the ATO:
Gross wages
PAYG tax withheld
Super liability
Allowances and deductions
There are no end-of-year payment summaries — employees see their income statement in myGov. STP Phase 2 (mandatory since 1 January 2022) adds more granular reporting of income types, allowances and the reason for any termination.
Awards may require allowances for specific conditions — meal allowances for overtime, uniform/laundry allowances, tool allowances for tradespersons, first aid allowances or vehicle allowances. Some are taxable and reportable through STP; check your specific award and the ATO's allowance treatment.
PAYG withholding is income tax you deduct from gross pay and send to the ATO. The amount depends on earnings, whether the employee has lodged a Tax File Number declaration, whether they claim the tax-free threshold, and any HELP/HECS (now STSL) study debt. STSL repayments kick in once income reaches the relevant threshold (the FY2025-26 first repayment threshold is around $67,000 of annual income).
Example: An employee earning $814.05/week, claiming the tax-free threshold, no study debt:
Up to 12 months unpaid (plus government Paid Parental Leave)
Annual leave accrues progressively across the year; you can estimate an employee's balance with the OneBookPlus annual leave calculator. Casuals receive no paid leave — the 25% loading compensates for this.
The #1 compliance issue. Fair Work audits small businesses regularly, and underpayment — even unintentional — results in back-pay and penalties. Since 1 January 2025, intentional ("wage theft") underpayment can also be a criminal offence.
The SGC includes the super owed + interest + a $20 admin fee per employee per quarter. None of it is deductible — so a small cash-flow slip becomes an expensive, permanent cost.
If someone works regular hours, uses your tools and you control how they work, they're likely an employee regardless of what the contract says. Sham contracting carries its own penalties.
Keep an eye on casuals working regular, predictable hours — Fair Work's employee choice pathway lets eligible casuals move to permanent employment, and you have obligations to respond.
OneBookPlus is an all-in-one Australian business platform — bookings, quotes, invoicing, jobs, CRM and accounting on a single connected finance hub — built GST/ABN/BAS-native and hosted in AWS Sydney. The core platform starts on a genuinely free $0 plan, so you can run quotes, jobs and invoicing for your business at no cost.
For payroll specifically, OneBookPlus offers a rostering and payroll module (a paid add-on) that handles the steps above for you:
Award-aware rates — pre-loaded rate tables across hospitality, retail, construction, cleaning and more
Automatic penalty rates — Saturday, Sunday, public holiday and overtime calculations
PAYG withholding using the current ATO tax tables
Super tracking at the 12% rate with quarterly due-date reminders
Compliant payslips delivered by email or employee portal
STP Phase 2 reporting to the ATO with every pay run
Time and attendance — clock in/out via phone with GPS
Leave management — automatic accrual and balance tracking
Public holiday detection — national and state-specific
Because payroll sits next to your invoicing, jobs and accounting in the same system, your wage costs flow straight into your reporting and BAS prep — no exporting between disconnected tools.
How do I pay an employee in Australia for the first time?
Register for PAYG withholding with the ATO, work out the correct award or National Minimum Wage rate ($24.95/hour from 1 July 2025), set up Single Touch Payroll software, then each pay run calculate gross pay, withhold PAYG tax, add 12% super on top, and issue a payslip within one working day.
How much superannuation do I have to pay an employee?
12% of ordinary time earnings for FY2025-26, paid from the first dollar earned and at least quarterly (28 Oct, 28 Jan, 28 Apr, 28 Jul). You can check a figure with the superannuation guarantee calculator.
Do I have to pay casual employees more?
Yes. Casuals get a 25% casual loading on top of the base rate in lieu of paid leave, taking the casual National Minimum Wage to $31.19/hour from 1 July 2025. Award casual rates are usually higher again.
