An HR checklist for new Australian employers
Reviewed by Mellow Editorial Team, HR & payroll content team
The essentials for a new Australian employer come down to registering correctly, understanding your withholding and super obligations, and putting the right employment documents in place before anyone starts work.
Register before you pay anyone
You need an Australian Business Number (ABN) before you operate. To employ staff, you also need to register for Pay As You Go (PAYG) withholding through the Australian Business Register or the ATO's Business Portal. This is separate from your ABN registration and is what gives you the legal authority to deduct income tax from wages.
If you expect your annual wages bill to exceed the relevant state threshold, you will also need to register for payroll tax in each state or territory where you have employees. Payroll tax is a state-based tax, so thresholds and rates vary — check directly with your state revenue office.
Set up Single Touch Payroll from day one
Single Touch Payroll (STP) is the ATO's real-time payroll reporting system. Every time you run a pay event — weekly, fortnightly or monthly — your payroll software must report wages, tax withheld and superannuation information directly to the ATO. There is no batch reporting at year end; reporting happens at each pay run.
By 14 July each year, you must lodge a finalisation declaration through STP to confirm the previous financial year's figures are complete. This replaces the old payment summary process and is how employees receive their income statement for tax returns.
Choose payroll software that is STP-compliant before you process your first payroll. Starting correctly is far easier than correcting historical errors.
Withhold the right amounts from day one
Income tax in Australia is progressive and collected through PAYG withholding. The amount you withhold from each employee depends on their earnings, their Tax File Number (TFN) declaration, and any additional factors they disclose.
The Medicare levy adds 2% to most employees' effective tax rate, and this is factored into the ATO's withholding schedules automatically.
If an employee has a HECS/HELP study debt, you are required to withhold additional amounts on a banded scale determined by their income. Employees declare this on their TFN declaration form. Missing it means the employee faces a larger tax bill — and a conversation you would rather avoid.
Always collect a completed TFN declaration from every new employee before the first pay run. If a TFN is not provided within 28 days, you are required to withhold at the highest marginal rate.
Pay superannuation correctly and on time
From 2026 the Superannuation Guarantee (SG) rate is 12% of ordinary time earnings. You must pay this to a complying superannuation fund on behalf of each eligible employee. Most employees are eligible from their first shift if they are 18 or older; some younger workers qualify too depending on their hours and earnings — check the ATO's eligibility rules.
Employees can choose their own fund. If they do not, you pay into their stapled fund (their existing fund from a previous employer, which the ATO identifies for you) or, if no stapled fund exists, your default fund.
Super is due at least quarterly, but from 1 July 2026 the government's payday super measure requires super to be paid on or before each payday for new payments. Confirm the exact commencement date and requirements with the ATO as implementation details continue to be finalised.
Late or unpaid super attracts the Superannuation Guarantee Charge, which is more expensive than the original obligation and not tax-deductible.
Have the right employment documents and understand the NES
Every employee should receive a written employment contract before they start. It does not need to be lengthy, but it must not undercut the National Employment Standards (NES), which are the minimum entitlements under the Fair Work Act.
Key NES entitlements to reflect in your contracts and payroll setup:
- Annual leave: four weeks per year for full-time employees, accruing progressively (shift workers may be entitled to five weeks).
- Redundancy pay: calculated on a scale based on years of continuous service, starting at four weeks' pay for one to two years and increasing from there.
- Notice periods, personal/carer's leave, parental leave and flexible working requests are also covered by the NES.
Beyond the NES, check whether a Modern Award or enterprise agreement applies to your employees. Awards set minimum pay rates and conditions for specific industries and occupations. The Fair Work Commission's Pay and Conditions Tool (PACT) is the practical starting point for checking coverage.
Finally, keep records. The Fair Work Act requires you to maintain employee records for seven years, including pay slips issued within one business day of each payment. Payroll software handles most of this automatically, but you are responsible for ensuring the records exist and are accurate.
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