HR and payroll for technology in Australia
Reviewed by Mellow Editorial Team, HR & payroll content team
Running payroll and HR for a technology business in Australia follows the same statutory framework as any other sector — but the specifics of how tech companies hire, structure pay, and retain people create a distinct set of practical challenges worth addressing directly.
The employment mix most tech companies carry
Technology businesses rarely employ a uniform workforce. It is common to have a blend of full-time employees, part-time employees, fixed-term contractors engaged as employees, and independent contractors working through their own entities or ABNs.
The distinction matters enormously. Employees attract the full suite of obligations: PAYG withholding, Superannuation Guarantee contributions (12% of ordinary time earnings from 1 July 2025), Medicare levy implications, Single Touch Payroll reporting, and the minimum entitlements under the National Employment Standards — including four weeks of annual leave per year.
Genuine independent contractors with an ABN are generally outside those obligations, but the line between a contractor and an employee is not always clean. The High Court's multi-factor test looks at the totality of the relationship, not just the label on the contract. Misclassification is one of the most common compliance risks in tech, particularly where developers or designers work exclusively for one client over extended periods. If you are unsure about a worker's classification, get a definitive determination before the relationship is established, not after.
Which award or agreement applies
Most technology employees fall under the Professional Employees Award 2020, which covers software and hardware engineers, ICT professionals, and related roles. The award sets minimum pay rates, allowances, and overtime conditions for those classifications.
Some businesses have enterprise agreements in place, which override the award where the agreement provides conditions at least as favourable overall. If you have no enterprise agreement, the award is the floor.
One common oversight is failing to check that salary packages actually exceed award entitlements on an annualised basis. A "market rate" salary that sounds generous may fall short once overtime and penalty provisions are factored in — especially for roles requiring regular on-call work or weekend deployments. Document any annualised salary arrangements formally and audit them against actual hours at least annually.
PAYG, super and STP in practice
Every pay run creates real-time reporting obligations. Under Single Touch Payroll, payroll data — including gross wages, PAYG withholding, and superannuation liabilities — must be reported to the ATO at each pay event, not monthly or quarterly.
PAYG tax is withheld according to the employee's Tax File Number declaration and any additional withholding instructions. Where employees have an outstanding HECS/HELP debt, an additional repayment is deducted based on their projected annual income. The repayment bands are applied by your payroll software once the employee ticks the relevant box on their declaration — this is easy to miss if onboarding is done in a hurry.
Superannuation at 12% of ordinary time earnings must be paid by the quarterly due dates (28 October, 28 January, 28 April, 28 July). Paying late triggers the Superannuation Guarantee Charge, which is not tax-deductible and adds an interest component. Many payroll platforms will accrue super automatically but not pay it — confirm that your process includes actual fund payment, not just accrual.
The end of financial year finalisation deadline under STP is 14 July. At that point, employees receive their income statement through myGov rather than a traditional payment summary.
Equity and non-cash benefits
Equity compensation — options, rights, employee share schemes — is common in tech and sits largely outside standard payroll processing, but it creates payroll obligations at specific points depending on how the scheme is structured.
Under an Employee Share Scheme (ESS), tax can be deferred until vesting or exercise in many cases, but when the taxing point arrives, the discount or gain may need to be reported through payroll and subjected to withholding. The rules here are detailed and the consequences of getting them wrong are real. If you are issuing options or shares to employees, a tax adviser needs to be involved in designing the scheme and confirming the payroll treatment before you issue anything.
Fringe benefits — laptops, phones, or home-office equipment provided for private use — may attract Fringe Benefits Tax. Where equipment is used primarily for work, exemptions often apply, but documenting the business use purpose matters.
Redundancy and restructuring
Technology companies restructure frequently. Redundancy pay under the National Employment Standards is scaled by length of service, starting from after the first year of employment. Casual employees and those on genuine fixed-term contracts are generally excluded, but genuine fixed-term contracts used to avoid redundancy entitlements are increasingly scrutinised.
When a role is made redundant, the process needs to follow consultation requirements — particularly if the business is covered by an enterprise agreement that specifies a consultation procedure. Skipping consultation steps, even when the commercial decision is clear, is a common reason redundancies are later challenged as unfair dismissals.
If you are managing payroll across Australian employees alongside overseas contractors or global hires, the coordination of obligations across jurisdictions adds another layer — how Mellow runs payroll across six countries on one platform covers how that typically works in practice.
---
Run HR and payroll in Australia with Mellow
Mellow brings HR, payroll and 12 AI agents into one platform — built to handle Australia properly, with payroll included, from £4 per employee per month. The AI agents don't just answer questions; they generate contracts, run cost estimates and draft letters for you.
[Start a free trial →](/register)