Compliance

1. Fair Work Act 2009

• National Employment Standards (NES): Employers must comply with the 11 minimum workplace standards set out in the Fair Work Act, including working hours, annual leave, parental leave, public holidays, and notice of termination.
• Modern Awards: These set minimum pay rates and conditions for employees in specific industries or occupations. Employers must pay employees at least the minimum rates specified in the relevant award or enterprise agreement.
• Enterprise Agreements: If a business has a workplace agreement (usually negotiated between employers and employees), the terms of the agreement must meet or exceed the requirements of the Fair Work Act, NES, and relevant awards.

2. Minimum Wage Requirements

• National Minimum Wage: The Fair Work Commission sets the national minimum wage for employees not covered by a Modern Award or Enterprise Agreement.
• Minimum Award Pay Rates: Employees covered by a Modern Award must receive at least the minimum pay rate specified in the award for their role, level, and experience.
• Employers are required to regularly check that their pay rates meet or exceed the minimum wage set for each employee’s classification.

3. Superannuation Guarantee (SG)

• Employers are required to contribute a percentage of an employee’s ordinary time earnings (OTE) into a superannuation fund. As of 2024, the SG rate is 11% (it is set to gradually increase to 12% by 2025).
• These contributions must be paid quarterly and are in addition to the employee’s salary or wages.
• Employers must also ensure they comply with the Superannuation Guarantee (Administration) Act and accurately calculate and report these contributions.

4. Taxation and Withholding (Pay-As-You-Go or PAYG)

• PAYG Withholding: Employers are required to withhold tax from employees’ wages based on their earnings and tax file number declaration. The amount withheld depends on the employee’s income, tax rate, and any applicable tax offsets.
• Payroll Tax: Businesses may also be required to pay payroll tax at the state level, which is based on the total taxable wages paid to employees. Each state has its own thresholds and rates for payroll tax, so employers need to understand the specific requirements for their location.
• Employers must report and pay PAYG withholding tax to the Australian Taxation Office (ATO) regularly.

5. Leave Entitlements

• Annual Leave: Full-time employees are entitled to 4 weeks of paid annual leave per year, pro-rated for part-time employees. These entitlements accrue progressively throughout the year.
• Sick Leave (Personal/Carer’s Leave): Employees are entitled to 10 days of paid personal/carer’s leave per year, which can be used for personal illness or caring for a sick family member.
• Parental Leave: Employees may be entitled to unpaid parental leave (up to 12 months) under the Fair Work Act, with eligibility for paid parental leave through the Paid Parental Leave Scheme administered by Services Australia.
• Public Holidays: Employees are entitled to public holidays off with pay, unless the employee is required to work (in which case, penalties or additional compensation may apply).

6. Recordkeeping Requirements

• Employers must maintain accurate records for all employees, including hours worked, wages paid, leave balances, superannuation contributions, and tax withholdings.
• These records must be kept for at least 7 years and must be available for inspection by employees and government authorities if requested.
• Pay slips must be provided to employees within 1 working day of payday, detailing the gross pay, tax withheld, superannuation contributions, and any deductions.

7. Workplace Health and Safety (WHS)

• Employers must comply with WHS laws, which may impact payroll in cases where employees are injured on the job and require workers’ compensation. This may involve ensuring employees are correctly classified and insured for work-related accidents.

8. Equal Pay and Anti-Discrimination Laws

• Employers must comply with anti-discrimination laws, including ensuring that employees are paid fairly for the work they perform. This includes compliance with the Equal Pay for Equal Work principle, which ensures that employees doing the same or similar work receive the same pay, regardless of gender, age, race, etc.
• The Sex Discrimination Act 1984 and other relevant legislation prohibit discrimination based on gender and other protected characteristics.

9. Reporting and Compliance to the ATO 

• Employers must ensure compliance with regular ATO reporting obligations, such as:
  • Single Touch Payroll (STP): Most employers are required to report payroll information to the ATO in real time via STP, which includes details about salaries, wages, PAYG withholding, and superannuation. This simplifies tax and superannuation reporting.
  • Superannuation Reporting: Employers must also report superannuation payments to the ATO, which ensures employees’ superannuation is properly tracked.

10. Pentalties for Non-Compliance 

• Failing to comply with payroll regulations can result in penalties, fines, and even legal action. For example, underpayment of employees or failure to provide required leave entitlements can lead to significant financial penalties and reputational damage.
• The ATO and the Fair Work Ombudsman (FWO) are responsible for enforcement and can conduct audits to ensure compliance with payroll laws.

Payroll whiz

Services