Employer registration and set-up in Australia
Reviewed by Mellow Editorial Team, HR & payroll content team
Hiring your first employee in Australia means registering for a handful of obligations before you run a single pay cycle — PAYG withholding, superannuation, and Single Touch Payroll reporting are all required from day one.
Register for PAYG withholding with the ATO
Before you pay anyone, you need to register as a PAYG withholder through the Australian Business Register or the ATO's Online services for business. PAYG withholding is how you deduct income tax from an employee's wages on the ATO's behalf. Income tax in Australia is progressive, so the amount you withhold depends on each employee's earnings and their Tax File Number (TFN) declaration.
If an employee does not provide their TFN, you are required to withhold at the highest marginal rate. Once registered, you will receive a withholding payer number and become responsible for remitting withheld amounts to the ATO — either monthly or quarterly, depending on the total annual withholding.
Set up Single Touch Payroll reporting
Every time you run payroll, you must report wages, tax withheld, and superannuation information directly to the ATO through Single Touch Payroll (STP). There is no end-of-year group certificate process anymore — STP replaces it. Reporting happens at each pay event, and you must finalise payroll data for each employee by 14 July after the end of the financial year.
To comply, you need STP-enabled payroll software. Most modern payroll platforms submit the STP file automatically when you process a pay run. If you are a micro-employer (one to four employees), the ATO allows you to use a registered tax or BAS agent to report on your behalf, or use a low-cost STP solution.
Register for superannuation and understand your obligations
You must pay superannuation contributions for most employees. From 2026, the Superannuation Guarantee (SG) rate is 12% of ordinary time earnings, paid into a complying superannuation fund. Ordinary time earnings generally means the wages paid for ordinary hours, excluding overtime.
Before you can pay super, you need to:
- Check fund eligibility. Employees have the right to choose their own fund. You must provide a Standard Choice Form within 28 days of an employee starting. If they do not choose, you pay into their stapled super fund (determined by the ATO from their employment history) or, if none exists, your default fund.
- Register with a default fund. Choose a complying fund as your default for employees who do not nominate one.
- Pay on time. Contributions must be received by the fund at least quarterly — the due dates fall 28 days after each quarter end. Paying late means you may owe the Superannuation Guarantee Charge, which is more expensive than the standard contribution and is not tax-deductible.
Account for Medicare and study debt repayments
The Medicare levy is an additional 2% withheld from most employees' wages. It is built into the ATO's tax withholding tables, so if you are using the correct PAYG withholding rates, you are already accounting for it. Some employees with lower incomes may be exempt or receive a reduction — the TFN declaration and withholding variation forms handle this.
If an employee has a HECS/HELP study debt, you are also responsible for withholding additional amounts to cover their compulsory repayment. Employees with a study debt should indicate this on their TFN declaration. The repayment amount is calculated on a banded scale based on their repayment income, and the ATO's withholding tables account for it. Failing to withhold the correct HELP repayment amount does not fall on the employer financially, but it does create an unexpected tax bill for the employee — so getting this right matters.
Understand your obligations under the National Employment Standards
Registration is only part of the picture. Once you employ someone, the National Employment Standards (NES) set minimum entitlements that apply regardless of any contract or award. Relevant set-up obligations include:
- Annual leave. Full-time employees accrue four weeks of paid annual leave per year. Part-time employees accrue on a pro-rata basis. You need to track this from the first day of employment.
- Redundancy pay. If you ever need to make a role redundant, a statutory scale applies based on years of continuous service. Small businesses (fewer than 15 employees) are exempt from the NES redundancy provisions, though you may still owe notice.
- Fair Work Information Statement. You are legally required to give every new employee a copy of the Fair Work Information Statement before or as soon as practicable after they start. Casual employees also receive a Casual Employment Information Statement.
These obligations sit underneath any modern award or enterprise agreement that may also apply to your workforce. Getting the set-up right from the start — registrations, STP, super fund selection, and NES documentation — is far easier than rectifying gaps after the fact.
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