HR and payroll for marketing agencies in Australia
Reviewed by Mellow Editorial Team, HR & payroll content team
Marketing agencies in Australia face a specific mix of payroll and HR complexity: a workforce that blends permanent staff, part-timers, freelancers and contractors, often working across multiple clients and shifting project budgets. Getting the structure right from the start saves significant time and legal exposure.
Classifying your workforce correctly
The first decision — and the most consequential — is whether someone is an employee or a contractor. Marketing agencies commonly use both, and the distinction is not simply a matter of preference or what the contract says.
The ATO and Fair Work Australia look at the real nature of the relationship. An employee typically works set hours, uses agency equipment, cannot subcontract the work, and is integrated into the business. A contractor generally controls how they deliver the work, invoices for results, and bears financial risk.
Misclassifying an employee as a contractor — sometimes called "sham contracting" — carries serious penalties, including back-payment of entitlements, super, and PAYG withholding. If your agency uses a lot of freelance designers, copywriters or social media managers, review each arrangement against the actual working conditions, not just the paperwork.
Which award covers your employees
Most employees at a marketing agency fall under the Commercial Sales Award or the Clerks — Private Sector Award, depending on their role. Account managers, media buyers and sales-focused staff typically sit under the Commercial Sales Award. Administrative and support staff often fall under the Clerks award. Creatives are sometimes covered by neither, landing instead under the Graphic Arts, Printing and Publishing Award or, for digital-heavy roles, the Professional Employees Award.
Award coverage determines minimum pay rates, penalty rates, overtime, and allowances. Getting the wrong award — or assuming everyone is on a common-law contract above the award — can create underpayment liability that accumulates quickly. If you are unsure, the Fair Work website has a coverage tool, or you can seek advice from an employment lawyer.
Payroll obligations for employees
Once someone is classified as an employee, several obligations apply automatically:
PAYG withholding. Income tax is progressive and must be withheld from every pay run. The amounts depend on the employee's tax file number declaration, residency status, and any applicable offsets. If an employee has a HECS/HELP debt, additional withholding applies on a banded scale on top of ordinary income tax — something agency staff with marketing or communications degrees often carry.
Medicare levy. An additional 2% is factored into PAYG withholding calculations for most employees.
Superannuation. From 2025/26 onward, the Super Guarantee rate is 12% of ordinary time earnings, paid to a complying fund. For the current 2026/27 tax year, that rate remains 12%. Super must be paid at least quarterly (many payroll platforms pay per cycle). Late or missing super payments trigger the Superannuation Guarantee Charge, which is not tax-deductible and includes interest and an administration fee.
Single Touch Payroll. Every pay event must be reported to the ATO through STP-enabled software on or before the payment date. At the end of the financial year, you must finalise each employee's STP data by 14 July so they can lodge their tax return.
Leave entitlements. Under the National Employment Standards, full-time employees accrue four weeks of annual leave per year. Redundancy pay scales with years of service — a detail that matters when agency headcount shifts with client wins and losses.
Managing contractors without crossing the line
Contractors do not receive PAYG withholding, super (in most cases), or leave entitlements from you. However, if a contractor is a PAYG voluntary agreement, or if they earn below a certain threshold and do not quote an ABN, withholding rules can still apply.
For genuine contractors, keep clean records: signed contracts that reflect the true arrangement, invoices for each engagement, and a clear scope of work. Avoid directing the day-to-day work of someone you have classified as a contractor — that behavioural control is exactly what auditors look for.
It is also worth knowing that contractors who are dependent on your agency for the majority of their income now have access to unfair contracts protections under the updated independent contractor framework. Long-term, high-dependency freelancer relationships deserve a periodic review.
Project-based billing and payroll timing
Agencies often bill clients on project milestones, but payroll does not flex around client payment. Wages, super and STP obligations run on fixed cycles regardless of whether an invoice has been paid. Building a payroll float — a cash reserve separate from the operating account — is practical risk management, particularly for smaller agencies that carry 60- or 90-day debtor terms.
Similarly, if headcount scales up for a campaign pitch or a large seasonal activation, factor in the full employment cost from day one: base salary plus 12% super, leave accruals, and any applicable award loadings. The real cost of an employee is consistently higher than the quoted salary, and scoping projects without accounting for that gap erodes margin fast.
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