Australia has extensive compensation and benefits laws, as well as many other work protections to keep in mind. Regulations also vary by state, making it critical to understand both federal laws and those in the region where your company is operating from.
Australia compensation laws
As of Jul. 1, 2023, the new national minimum wage is AUD 882.80 per week or AUD 23.23 per hour. If a Modern Award applies, minimum wages will be outlined in the relevant Modern Award. Compensation laws in Australia also dictate a maximum 38-hour workweek, although necessary shifts have some greater flexibility.
Employers are required to give employees a pay slip within 1 working day of paying them. Many employers in Australia use an online banking transfer system to send out payments and pay slips.
Guaranteed benefits in Australia
It is common practice for employers to offer employees an allowance instead of buying a private health insurance plan on the employee’s behalf. Also, any employee with a taxable income over a certain level pays 2% of their income to Medicare — the country’s national healthcare program.
Employees are guaranteed vacation leave, sick time, domestic violence leave, and maternity or paternity circumstances. Full-time employees must get a minimum of 4 weeks of vacation time a year.
As part of national laws, all full-time employees are given 10 days of paid sick and carer’s leave each year. Other protections are also in place for parental leave if employees meet the eligibility requirements.
Annual leave and sick leave entitlements carry over from year to year.
Australia benefits management
If you decide to handle both guaranteed and supplemental benefits yourself, expect to spend a significant amount of time and money. You must stay well-versed on all Australia compensation laws and benefits management to remain compliant and avoid costly fines. However, there are other options, such as partnering with an employer of record like G-P. Our industry-leading technology can help you automate, customize, and manage every HR function such as payroll, currencies, in-country benefits, expenses, and more.
Restrictions for benefits and compensation
Minimum wage laws and maximum working hours per week — listed above — are 2 of the most protected standards under Australian compensation law. These standards must be considered if you want to hire employees in Australia.
Australia competitive benefits planning
Expanding to a new country will require several processes, including benefits planning. Your Australia employee benefits plan will depend on several factors, including labor laws and market standards. Before you start the development process, ensure you understand the new professional environment and what your company needs to offer in order to stand out.
Australia employee benefits plans
When you’re developing your company internationally, benefits will play a significant role in your success. While the benefits you provide are essential for compliance with a country’s labor laws, they also help you build a committed team. Providing compensation beyond a paycheck shows your employees you care about their wellbeing, leading to higher recruitment rates and retention.
Possible fringe benefits can include:
- Education programs
- Childcare allowances
- Flexible working hours
- Gym memberships
- Monthly health insurance allowances
Required benefits
The government in Australia holds employers accountable for compliance with labor regulations. Among the many employment laws in the country, there are select benefits you must provide for every worker. Requirements may include but are not limited to:
- Pension plan contributions (Superannuation)
- Paid annual leave
- Public holidays off
There are exceptions to the holiday leave in some industries and public holidays will be determined by where your employee is located in Australia. However, in general, employees receive 4 weeks of paid annual leave and at least 7 public holidays off.
Designing employee benefits plans in Australia
The challenge with benefits planning is finding the balance between employee needs and your company’s resources. The best way to work toward this balance is to gather as much relevant information as you can and go from there. Follow these 3 steps for your benefits planning.
1. Assess your business goals and resources.
Consider how much your company can afford to spend as you build a benefits budget. Your budget might start low early in your expansion journey, but if you regularly reevaluate your income, you can make adjustments as you grow.
Understanding your goals early on can help with fund allocation later in the process. Would you like to focus on retention or recruiting? Are you interested in competing with other industry leaders? Consider how your benefits plan will reflect these objectives.
2. Research industry standards and employee needs.
When job candidates look into your benefits, they’ll think about their industry expectations and what they need to live comfortably. When you design your provisions packages, these factors should play a part in your decisions.
The foundation of this stage is research. Explore other leading companies in the area and what they offer their teams. Gain an understanding of employee needs with surveys or interviews. These 2 practices will give you a comprehensive understanding of the benefits in your region.
3. Determine your company benefits.
With all the information you gather, you can approach your benefits plan with confidence. Find overlap in employee needs, market standards, and your goals to identify the right provisions for your company. It’s wise to list any required benefits first and use your remaining resources for supplemental perks.
Average cost of benefits
Many factors can affect the scope and type of benefits a business provides, including industry, location, and company size. You should build your budget around your unique requirements and goals.
How to calculate employee benefits
Your calculation process will depend on the type of benefits you offer. However, the pension requirement outlined in the labor laws does come with calculation requirements.
Employers are required to contribute a minimum of 11% of employees’ Ordinary Time Earnings (OTE) to their superannuation funds. An employee must receive a contribution once per quarter, and an employer may choose to provide more than the minimum percentage.
How are employee benefits taxed in Australia?
The government declares most cash and noncash benefits from employment as taxable income. Examples of taxable benefits include rent or transportation stipends and health insurance schemes.
Employee healthcare benefits
In Australia, the healthcare system uses a universal insurance program, giving all citizens free access to hospital visits, physician care, and pharmaceuticals. This extensive coverage is often enough for the standard person, but it doesn’t reach all forms of healthcare.
Employers are not required to provide private health insurance schemes for their employees, but they may choose to. With the presence of universal healthcare, private insurance may not be a priority benefit, but it can make your company more competitive in the labor market.
Partner with G-P to build your everywhere workforce.
As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
Learn more about our platform and request a proposal today.