HR for founders in Australia
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR in Australia means understanding a specific set of legal obligations — superannuation, award wages, leave entitlements, and tax withholding — and building processes that keep you compliant as you hire your first employees.
Know your obligations before you hire
The moment you engage someone as an employee, several obligations kick in simultaneously.
You need to register for PAYG withholding with the Australian Taxation Office before you make your first payment. This allows you to withhold income tax from wages and remit it to the ATO on the employee's behalf. Income tax is progressive, so the amount withheld depends on the employee's earnings and any tax offsets they claim on their TFN declaration.
You also need to check whether the employee has a HECS/HELP debt. If they do, you withhold an additional amount on a banded scale alongside regular income tax. The employee declares this on their TFN declaration form — you don't need to chase it separately.
From the moment someone starts, you are also required to report every pay event to the ATO via Single Touch Payroll. STP is not optional and not something you do at year-end — it happens at each payroll run.
Understand which award or agreement applies
Australia's Fair Work system means most employees are covered by a Modern Award, even if you never signed anything. Awards set minimum pay rates, penalty rates for weekends and public holidays, allowances, and overtime rules. Getting this wrong is one of the most common and costly mistakes early-stage founders make.
Start at the Fair Work website and use the award finder to identify which award covers your industry and your employees' classifications. Common ones include the Clerks Award, the Professional Employees Award, and various industry-specific awards. If you are paying above the award rate, document that clearly — but above-award pay alone does not absorb penalties and allowances unless you have a formal arrangement that says so.
If you are not covered by an award, the National Minimum Wage still applies as a floor.
Set up super and leave correctly from day one
The Superannuation Guarantee requires you to contribute 12% of an employee's ordinary time earnings into a complying superannuation fund. This figure applies from 2026. You cannot pay it late without penalty, and you cannot use it as a substitute for wages — it is on top of the salary you agree.
Contributions must go to the employee's chosen fund. If they do not nominate one within the required period, you must check whether they have a stapled super fund through the ATO portal before defaulting to your default fund. Getting this step wrong is a common compliance gap.
Under the National Employment Standards, employees accrue four weeks of paid annual leave per year (pro-rated for part-time staff). They also accrue personal/carer's leave separately. These balances accumulate and must be paid out on termination — so they are a real financial liability on your books. Track them from day one.
For redundancy, the NES sets out a scale based on years of service. A short-tenure employee costs less to make redundant than someone who has been with you for several years, but the obligation exists regardless of your company's financial position.
Build a simple but functional HR process
You do not need an HR department to run compliant HR. You do need a few things in writing.
A written employment contract for every employee, signed before they start. It should state the role, the base salary, hours, the applicable award (or that the role is award-free with the reason documented), leave entitlements, and notice periods. Do not copy a template without checking it reflects the current award and NES — they cannot be contracted out of.
A fair work information statement, which you are legally required to give every new employee before or on their first day. The Casual Employment Information Statement applies to casual employees.
Basic payroll records. You are required to keep payroll records for seven years, including hours worked (for award-covered employees), pay rates, and super contributions made.
Manage your reporting calendar
Australian payroll has a rhythm worth building into your operating cadence.
STP reporting happens at each pay event — meaning every time you run payroll, the ATO receives the data. At the end of the financial year, you finalise the STP submission by 14 July. This replaces the old payment summary (group certificate) process. Employees then see their income statement directly in myGov.
Superannuation is typically due quarterly, though you can pay more frequently. The quarterly deadlines are fixed — missing them triggers the Superannuation Guarantee Charge, which is more expensive than the contribution itself and is not tax-deductible.
The Medicare levy of 2% is factored into the PAYG withholding tax tables automatically — you do not calculate or remit it separately.
If you are running payroll across multiple entities or countries, how Mellow runs payroll across six countries on one platform covers how that complexity is typically managed.
Staying on top of these obligations early prevents the kind of back-pay and penalty exposure that can seriously damage a growing business's finances and reputation.
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