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How to hire and pay employees in Australia
Slasify
Nov 19, 2025
| Key Takeaways |
|---|
| 1. Minimum wage in Australia is AUD 24.10/hour or AUD 915.90/week, with higher rates applying under industry-specific awards. |
| 2. Personal income tax is progressive up to 45%, with employers also contributing 11% to superannuation (increasing to 12% by 2025). |
| 3. The standard workweek is 38 hours, with overtime and penalty rates applying under modern awards and enterprise agreements. |
| 4. Employees receive 20 days of paid annual leave per year, plus 10–13 public holidays depending on state or territory. |
| 5. Termination requires written notice based on tenure, ranging from 1 to 4 weeks, with redundancy pay required for certain employers under the Fair Work Act. |
Discover the global hiring and employment landscape in Australia – featuring skilled and diverse workforce renowned for innovation and quality across various sectors. With established ties to the Asia-Pacific region and a variety of growth incentives, it's no surprise that Australia stands out as a top choice for business expansion in the region.
Personal Income Tax
For Residents
| Annual Taxable Income (AUD) | Progressive Tax Rate (%) |
|---|---|
| Up to 18,200** | - |
| 18,201–45,000 | 16 |
| 45,001–135,000 | 30 |
| 135,001–190,000 | 37 |
| Over 190,000 | 45 |
**Tax free threshold for part-year resident is lower, as determined by the Australian Taxation Office.
For Non-Residents
| Taxable Income (AUD) | Progressive Tax Rate (%) |
|---|---|
| Up to 135,000 | 30 |
| 135,001–190,000 | 37 |
| Over 190,000 | 45 |
Medicare Levy
Taxpayers are also generally subject to a Medicare levy equivalent to 2% of their taxable income. More information surrounding levy reductions and exemptions can be accessed through the following links: Levy reduction | Medical exemption | Foreigners' exemption | Other exemption
Furthermore, a Medicare levy surcharge may apply to certain higher income taxpayers whose individual or families do not have the appropriate level of private patient hospital cover, as follows:
| Annual Income Threshold for Singles (AUD) | Annual Income Threshold for Families (AUD) | Surcharge Rate (%) |
|---|---|---|
| Up to 101,000 | Up to 202,000 | - |
| 101,001–118,000 | 202,001–236,000 | 1 |
| 118,001–158,000 | 236,001–316,000 | 1.25 |
| Over 158,000 | Over 316,000 | 1.5 |
Note: Annual income thresholds for families are increased by AUD 1,500 for each additional child after the first.
Local Tax
There are no local taxes on employment income in Australia.
Statutory Contributions
Employers are required to pay superannuation contributions for their employees who are over 18 years old or less than 18 years old, but work over 30 hours per week. This may also apply to temporary residents as well.
Superannuation contributions are calculated based on the employee’s wages of up to AUD 62,500 per quarter.
Employer Contributions
| Contribution Rate | Note | |
|---|---|---|
| Superannuation | 11.5% | This rate is to be increased by 0.5% every July until it reached 12% in July 1, 2025. |
| Workers Compensation (Victoria) | 3.907% | This rate varies across states. |
Employee Contributions
There is no mandatory employee payroll contribution.
Payment of Wages
Employees must be paid at least monthly in cash, cheque, or electronic funds transfer. Under the Commercial Sales Award, employees can be paid weekly, fortnightly or monthly.
Minimum Wage
Effective July 1, 2025, the national minimum wage in Australia is AUD 24.95 per hour or AUD 948 per week.
Different minimum wage may apply depending on the individual’s employment type, age and work capacity, all of which can be calculated using the Fair Work Pay Calculator.
Statutory Bonus
There are no statutory bonus to be paid in Australia.
Termination
Employers shall not dismiss their employees in a harsh, unjust or unreasonable manner, with employees having the option to engage the Fair Work Commission to deal with cases of wrongful termination.
Employers intending to dismiss their employees are required to give them a written notice consisting of the date of termination at the start of their notice period.
Notice Period
Employers dismissing their employees for reasons other that serious misconduct are required to observe the following minimum notice periods or pay their employees in lieu:
| Length of service | Notice period |
|---|---|
| Up to 1 year | 1 week |
| 1–3 years | 2 weeks |
| 3–5 years | 3 weeks |
| Over 5 years | 4 weeks |
Employees who are over 45 years old and have completed at least 2 years of service are entitled to an additional week of notice when they are dismissed.
Under the Commercial Sales Award, dismissed employees on their notice period are entitled to a paid day off to look for employment, and employees who resign should also observe the above notice period, though they are not required to extend the notice period by age.
Severance Pay
In the event of redundancy termination, employees are entitled to receive redundancy pay that is calculated based on the employee's base rate of pay for their ordinary hours of work.
| Length of service | Redundancy pay |
|---|---|
| At least 1, but less than 2 years | 4 weeks |
| At least 2, but less than 3 years | 6 weeks |
| At least 3, but less than 4 years | 7 weeks |
| At least 4, but less than 5 years | 8 weeks |
| At least 5, but less than 6 years | 10 weeks |
| At least 6, but less than 7 years | 11 weeks |
| At least 7, but less than 8 years | 13 weeks |
| At least 8, but less than 9 years | 14 weeks |
| At least 9, but less than 10 years | 16 weeks |
| At least 10 years | 12 weeks |
Probationary Period
An employer usually decides on the length of the probation period, often ranging from 3 to 6 months.
Work Time Rules
Standard Working Hours
The standard working hours for employees not covered under any award or other registered agreements are subject to a maximum of 38 hours per week. These hours may also be averaged over a specified period of not more than 26 weeks by a written averaging arrangement.
Under the Commercial Sales Award, the standard working hours for a full-time employee are subject to a maximum of 10 hours per day or an average of 38 hours per week, with a maximum of 152 hours over 28 consecutive days.
Break Period
Statutory break period are not provided for by the National Employment Standard. However, employers must still allow an employee reasonable time to have regular and normal meals.
Breastfeeding employees are also entitled to be given the appropriate breaks to breastfeed or express.
Overtime
Employees have the right to refuse working in excess of their standard working hours if they are unreasonable. To determine whether an overtime request is reasonable, one could consider the employee's personal circumstances, the employer's needs, whether a sufficient advance notice has been given and whether overtime premium is being paid. among other factors.
Under the Commercial Sales Award, employees shall be paid 150% of the regular hourly rate for work in excess of their standard hours or, if there is a written agreement between the employer and employee, time off in lieu.
Weekly Rest Days
Daily or weekly rest periods are not provided for by the National Employment Standard. However, employees required to work weekends may be entitled to receive pay premiums.
Under the Commercial Sales Award, a full-time or part-time employee directed by the employer to perform any work on a weekend shall be paid as follows:
| Pay rate | |
|---|---|
| Saturday | 150% of the regular hourly rate, with a minimum payment of 2 hours |
| Sunday | 200% of the regular hourly rate, with a minimum payment of 3 hours |
Holiday and Leave Entitlements
Public Holidays
Employees shall be paid their base pay rate for the ordinary hours they would have worked for public holidays that fall on the days they would normally work. Public holidays in Australia vary by state or territory.
| Holiday | Date | Which state or territory does this apply in? |
|---|---|---|
| New Year's Day | January 1 | All states and territories |
| Australia Day | January 27 | All states and territories |
| Royal Hobart Regatta | February 10 | Tasmania (only observed in certain areas) |
| Labor Day | March 3 | Western Australia |
| Canberra Day, Adelaide Cup Day, Eight Hours Day, Labor Day | March 10 | Australian Capital Territory, South Australia, Tasmania and Victoria |
| Good Friday | April 18 | All states and territories |
| Easter Saturday | April 19 | All states and territories, except Tasmania and Western Australia |
| Easter Sunday | April 20 | All states and territories, except Tasmania |
| Easter Monday | April 21 | All states and territories |
| Easter Tuesday | April 22 | Tasmania (generally Tasmanian Public Service only) |
| Anzac Day | April 25 | All states and territories |
| May Day, Labor Day | May 5 | Northern Territory and Queensland |
| Reconciliation Day, Western Australia Day | June 2 | Australian Capital Territory and Western Australia |
| King's Birthday | June 9 | All states and territories, except Queensland and Western Australia |
| Picnic Day | August 4 | Northern Territory |
| Royal Queensland Show | August 13 | Queensland (Brisbane area only) |
| King's Birthday | September 29 | Western Australia (some regional areas hold the King's Birthday public holiday on a different date) |
| Friday before AFL Grand Final | TBC | Victoria |
| Labor Day, King's Birthday | October 6 | Australian Capital Territory, New South Wales, Queensland and South Australia |
| Recreation Day | November 3 | Tasmania (only areas that don't observe Royal Hobart Regatta) |
| Melbourne Cup | November 4 | Victoria |
| Christmas Eve | December 24 | Northern Territory and South Australia (from 7:00 p.m.), and Queensland (from 6:00 p.m.) |
| Christmas Day | December 25 | All states and territories |
| Boxing Day | December 26 | All states and territories |
| New Year's Eve | December 31 | Northern Territory and South Australia (from 7:00 p.m.) |
Employers can ask their employees to work on a public holiday, provided that the request is reasonable. Under the Commercial Sales Award, employees required to work on a public holiday shall be paid at 250% of the regular hourly rate, with a minimum payment of 3 hours, or 2.5 days' leave in lieu of each holiday worked.
All work-related travelling at the request of the employer on a public holiday shall be paid at 150% of the regular hourly rate, with a minimum payment of 3 hours' travelling, or 1.5 days' leave in lieu of each holiday worked.
Annual Leave
All employees, except casual employees, are entitled to 4 weeks of paid annual leave, calculated based on their ordinary hours of work. Under the Commercial Sales Award, employees are entitled to be paid a leave loading on top of their regular wage, as follows:
| Leave loading | |
|---|---|
| Employees who do not receive commission | 17.5% of the regular rate of pay |
| Employees who receive commission | The greater of 17.5% of the regular rate of pay or the average commission earned over the preceding 12 months |
The annual leave entitlement is accumulated throughout the year from the first day of employment, including probation, and any unused annual leave will roll over from year to year. There is no legal limit on the duration of leave an employee may accumulate, though both the employer and employee are empowered to engage in an agreement to reduce or eliminate excessive leave accrual of more than 8 weeks as necessary.
Accumulated annual leave in excess of 4 weeks can also be cashed out if there is a written agreement to such effect, provided that no more than 2 weeks of leave are cashed out per year.
Sick Leave
Employees are entitled to 10 days of fully paid sick and carer's leave per year to deal with personal illness, caring responsibilities and family emergencies, provided that they have given the appropriate notice or evidence.
Paid sick and carer's leave can be accumulated and any unused leave will be carried over to the following year. There is generally no limitations to the amount of sick and carer's leave an employee can take at a time, provided that they are within their accumulated leave balance.
Employees who are sick for periods that exceeds their accumulated paid leave is protected from termination as long as their leave is not more than 3 consecutive months or does not exceed 3 months in the past 12-month period.
Maternity Leave
Employees who are pregnant and eligible for unpaid parental leave can choose to take their leave in a continuous period, flexibly for up to 100 days or a combination of both.
| Continuous leave period | Flexible leave days |
|---|---|
|
If a pregnant employee takes parental leave, it must start up to 6 weeks before the expected birth or within 24 months of the birth of the child. In any case, the parental leave has to end within 24 months of the birth of the child. Employers may direct their employees to start their leave up to 6 weeks before their due date. |
An employee can take up to 100 days of their 12 month parental leave flexibly up to their child's second birthday. Moreover, this can be taken from up to 6 weeks before the expected birth of the child for pregnant employees. |
Moreover, a pregnant employee who is eligible for unpaid parental leave can take unpaid special parental leave if they're unfit for work because they are pregnant and have a pregnancy-related illness, or have a pregnancy loss after 12 weeks and their baby is not stillborn.
Paternity Leave
The spouse or de facto partner of someone who gives birth and eligible for unpaid parental leave can choose to take their leave in a continuous period, flexibly for up to 100 days or a combination of both.
| Continuous leave period | Flexible leave days |
|---|---|
| If the employee who isn't pregnant is the parent taking the parental leave, the leave must start and end within 24 months of the birth of the child. | An employee can take up to 100 days of their 12 month parental leave flexibly up to their child's second birthday. |
Parental Leave.
Employees are entitled to take 12 months of unpaid parental leave after the birth of their child or after adopting a child under 16 years of age, which can be further extended by another 12 months. To be entitled, the employee must have or will have responsibility for the care of a child, and have worked for their employer for at least 12 months
An employee's parental leave entitlement will differ depending on whether they are the pregnant (see Maternity Leave section) or non-pregnant party (see Paternity Leave section).
Furthermore, eligible employees can get parental leave pay from the Australian Government under the Paid Parental Leave scheme and/or their employer.
| Parental leave pay under the Paid Parental Leave scheme | Parental leave pay from the employer |
|---|---|
| Eligible employees who are the carer of a newborn or newly adopted child can get parental leave pay at the National Minimum Wage. | Employers can provide paid parental leave in their enterprise agreement or other registered agreements, employment contracts, or workplace policies. |
Other Leave
| Leave type | Paid or Unpaid | Duration of leave | Note |
|---|---|---|---|
| Community Service Leave | Both | - |
Employees can take this leave for activities such as voluntary emergency management activities or jury duty. Payment is only made to non-casual employees for the first 10 days of jury duty, which shall be calculated at the employee's base pay minus the amount received from the government for the performance of jury duty. |
| Carer's leave | Unpaid | 2 days per year | Employees can take this leave to take care of an immediate family or household member that needs care and support. This can be taken once the employee's entitlement to paid sick and carer's leave is exhausted. |
| Compassionate and bereavement leave | Paid | 2 days | Employees can take this leave when a member of their immediate family or household dies or develops a life-threatening condition. This leave shall be unpaid for casual employees.. |
| Family and domestic violence leave | Paid | 10 days per year |
Employees can take this leave when they are experiencing violent, threatening or other abusive behavior by their close relative. While employers are required to keep a record of leave balances and any leave taken by employees, pay slips must not mention family and domestic violence leave. |
| Long Service Leave | Paid | Duration varies across states or territories | Employees are entitled to this leave after a certain length of service. |
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