Australian Payroll Software: PAYG, Superannuation and HECS-HELP

Australian payroll is, for anyone used to the UK, reassuringly familiar in shape — and different enough in the details to catch generic software out. This guide explains the main components and what Australian payroll software has to handle.

The components of Australian payroll

The tax year. Australia's tax year runs from 1 July to 30 June, not the calendar year and not the UK's April cycle. Software that assumes a January or April year start will get period calculations wrong.

PAYG — Pay As You Go. This is income tax withheld from salary, calculated across bands rising from 0% through 16%, 30%, and 37% to 45%. It is conceptually close to UK PAYE.

The Medicare Levy. A levy of 2% of taxable income funds Australia's public health system, with a surcharge for higher earners who do not hold private health insurance.

Superannuation. Super is Australia's compulsory retirement scheme. Employers must pay a percentage of an employee's earnings into a super fund — currently 12%, scheduled to rise to 12.5% from July 2027. Super is an employer cost on top of salary and must be calculated and tracked correctly.

HECS-HELP. Employees repaying a HECS-HELP student loan have repayments collected through payroll, at a rate that rises with income from around 1% to 10%. This works much like the UK's income-contingent student loan repayments.

If you know UK payroll, Australian payroll will feel familiar — PAYG is like PAYE, HECS-HELP is like student loans — but the tax year, the Medicare Levy, and super are distinctly Australian.

What good Australian payroll software does

It uses the 1 July to 30 June tax year. It calculates PAYG across the correct bands, applies the Medicare Levy, and computes superannuation at the current rate. It handles HECS-HELP repayments through payroll. And it produces clear payslips in Australian dollars.

Australia also has Single Touch Payroll, or STP — an event-based reporting system where payroll information is reported to the Australian Taxation Office each pay run. STP is conceptually similar to the UK's Real Time Information.

How Mellow handles Australia

Mellow calculates Australian payroll with the correct 1 July tax year, PAYG across the bands, the Medicare Levy, superannuation at the current 12% rate, and HECS-HELP repayments. Payslips are produced in Australian dollars.

For STP reporting, Mellow currently provides a guided submission process through the ATO Business Portal; direct STP integration is a planned enhancement. As with Mellow's other countries, the calculation is done for you and the submission is clearly guided.

Alongside payroll, Australian businesses get the full Mellow HR platform from A$8 per employee per month.

The bottom line

Australian payroll is approachable, but it has its own calendar and its own rules. Software that genuinely handles PAYG, super, the Medicare Levy, and HECS-HELP makes it straightforward. Mellow does. See Mellow pricing.