Employee Benefits in Australia

Employee entitlements and benefits in Australia are governed by the National Employment Standards (NES) and include guidelines about:

• The maximum amount of hours various employees are allowed to work per week

• Retirement contributions

• Public holidays and annual leave, including parental leave and related benefits

• Requests for flexible working arrangements

• Converting casual workers to full employees

• Notices of termination and redundancy pay

• Fair Work Information Statements and Casual Employment Information Statements

Many employers also offer supplemental benefits, such as private health insurance, professional development opportunities, or wellness programs. A workforce enablement partner like Safeguard Global can advise you on competitive benefit packages for your desired location in Australia as well as your industry.

Annual leave and paid time off

Annual leave, also known as “holiday pay” in Australia, begins accruing as soon as an employee begins work. All employees except casual employees are entitled to holiday pay. Part- and full-time employees receive up to four weeks of paid leave, with shift workers receiving up to five weeks, depending on their industry.

Additional leave may be offered as part of an employment contract or enterprise agreement, though it is not required by law. Many employers offer enhanced leave policies to stay competitive and improve retention.

Tax and social contribution

In Australia, withholding tax is known as Pay As You Go (PAYG) withholding. Employers must deduct PAYG from employee salaries based on applicable income tax rates and submit it to the Australian Taxation Office (ATO). Reporting is then done through your business activity statement (BAS) form, as well as through Australia’s Single Touch Payroll (STP) system. How often you need to pay and report to the ATO depends on the number of workers you have and how much you’re withholding.

Additionally, employers must make a payment called super guarantee or “super,” which goes towards their workers’ retirements. A fringe benefits tax (FBT) may also be required if the employer is providing benefits like a company car, free parking, or a gym membership.

Sick leave

All workers in Australia except those under casual work contracts are entitled to paid sick leave and carer’s leave. An employee can take sick leave if they’re suffering from a personal injury or illness, and they must provide a medical certificate if requested by their employer. Carer’s leave applies when an employee needs to take time off to care for a member of their immediate family or household who is sick, injured, or has an unexpected emergency.

Full-time employees are entitled to 10 days of paid sick and carer’s leave per year, which accumulates based on how long they have worked. Unused leave carries over into the next year. Part-time employees earn leave on a prorated basis based on how many hours they have worked.

Compassionate and bereavement leave

Australian employees are entitled to two days of compassionate leave per incident. Covered incidents include any of the following events when they happen with an immediate family or household member:

• Death

• Contraction of life-threatening illness or injury

• Miscarriage or stillborn birth

Casual employees receive unpaid compassionate leave, while all other employees receive their normal wages.

Family and domestic violence leave

All employees, including casual employees, are entitled to 10 days of family and domestic violence leave, which can be used when an employee is experiencing violence or threatening or abusive behavior. This entitlement is available immediately upon employment and does not accrue. It resets on an employee’s work anniversary.

Parental leave

Parental leave laws in Australia are comprehensive, and the government also pays many workers on parental leave, meaning that employers are required to provide unpaid leave only. However, many companies choose to compensate employees during all or part of their leave in order to make their compensation packages more competitive.

While pregnant, employees are entitled to job safety as well special leave in the event of a pregnancy-related illness. They may also be entitled to flexible working arrangements. After birth or adoption, both parents are eligible for up to 24 months of unpaid leave. Employers may elect to hire replacement workers during this time.

Other leave

Other types of paid and unpaid leave are defined under Australian law, including unpaid carer’s leave, community service leave, and long service leave. To make sure you’re aware of every type of leave an Australian employee is entitled to, partner with a global workforce enablement partner like Safeguard Global. We can advise you about Australian employment law, help you recruit Australian workers and create competitive compensation packages, and even hire workers in Australia on your behalf, thereby taking on the legal risk. Contact us today.

Disclaimer: The information provided is for informational purposes only and does not constitute legal or professional advice. Safeguard Global disclaims any liability arising from reliance on this information. Certain content may be sourced from third parties and remains their intellectual property; all other content is owned by Safeguard Global and protected by applicable intellectual property laws. You are encouraged to seek professional or legal advice to address any issues, questions or matters arising from the information contained herein.