Australian payroll compliance is notoriously complex. Between modern awards, Fair Work regulations, ATO requirements and state-based obligations, there's a lot that can go wrong, and the penalties are severe, both financially and reputationally. Here are the key areas every business must meet.
Key compliance areas
Modern award compliance
Modern awards set minimum pay rates and conditions. You must identify the correct award, pay at least the minimums, and correctly calculate penalty rates, allowances and leave.
Common mistakes
- Applying the wrong award to employees
- Failing to update rates when awards change annually
- Misunderstanding annualised salary provisions
- Not paying required allowances for specific conditions
Single Touch Payroll (STP)
All employers must report payroll information to the ATO via STP on or before each pay day, including gross wages, PAYG withholding and super liability.
- Report on or before each pay day
- Use STP-enabled software
- Finalise declarations by 14 July each year
- Report year-to-date values accurately
Superannuation guarantee
Employers must pay the super guarantee on ordinary time earnings for most employees, quarterly by deadline, to avoid the Super Guarantee Charge.
- Q1: 28 October
- Q2: 28 January
- Q3: 28 April
- Q4: 28 July
Fair Work record keeping
The Fair Work Act requires specific records be kept for 7 years. Missing records during an investigation creates serious legal exposure.
- Employee details and classification
- Hours worked and pay rates
- Leave balances and usage
- Superannuation contributions
- Termination details