Payroll and Benefits Guide Australia – Western Australia
Last updated: Jun 29, 2022
Employer Payroll Contributions
|10.50%||Superannuation (capped at 21,002.06 AUD per year)* (10.00% up to 30th June 2022, increasing to 10.50% effective from 1st July 2022) Employers are obliged to make superannuation contributions for all employees working full-time, part-time, or casual employees 18 or older and earn 450 AUD or more in a month (before tax). Employees under 18 also get superannuation if they work at least 30 hours per week and earn 450 AUD or more in a month (before tax). * Australian law states that all employers maintain adequate ‘workers’ compensation insurance’ to benefit employees injured during their employment. JobKeeper payments are exempt from payroll tax.|
Employee Income Tax
|0.00%||Up to 18,200.00 AUD|
|19.00% for each 1.00 AUD over 18,200.00 AUD||18,201.00 AUD – 45,000.00 AUD|
|5,092.00 AUD + 0.325 AUD for each 1.00 AUD over 45,000.00 AUD||45,001.00 AUD – 120,000.00 AUD|
|29,467.00 AUD+ 0.37 AUD for each 1.00 AUD over 120,000.00 AUD||120,001.00 AUD – 180,000.00 AUD|
|51,667.00 AUD + 0.45 AUD for each 1.00 AUD over 180,000.00 AUD||180,001.00 AUD and over|
*This table does not include the Medicare levy of an additional 2.00% of taxable income, which applies to most residents. An additional Medicare levy surcharge of between 1.00% and 1.50% applies to certain higher-income taxpayers who are not covered by health insurance for private patient hospital cover.
The national minimum wage in Australia is 21.38 AUD per hour, 812.44 AUD per month for a full-time award-free adult employee who is not an apprentice or a trainee. Each classification level has a different minimum pay rate.
Most states fall under the Fair Work Act 2009 and work to the national minimum wage, however, there may still be some exceptions for state or local government employees.
Employees in Australia are employed on contracts that stipulate the pay cycle, and although there are part-time, casual, and independent contractor pay types with set pay cycles, the most common are:
- Monthly pay cycle (with payment due by the last day of the month)
- Bi-weekly pay cycle (with payments due every second week on a set day, usually mid-week, Wednesday, or Thursday)
- Bi-monthly pay cycle (with payment due on the 15th and the 30th of the month)
There are no provisions in the law regarding 13th salaries.
The National Employment Standards (NES) sets the maximum number of working hours at 38 hours a week. This applies to all employees covered by the national workplace relations system, regardless of any award, agreement, or contract.
Overtime must be agreed upon between the employee and the employer. Employers need to provide an assessment of whether additional hours are reasonable before approving overtime. The rates are generally set within the contract or awards, most commonly 200% of the regular salary pay rate for the first 3 hours of overtime and 150% for the following hours.
Additional allowances and higher overtime pay rates may be stipulated within the employee agreement, contract, or award. This higher rate also applies when working overtime on weekends, public holidays, nights, or in difficult and unpleasant conditions.
Paid Time Off
All employees (except for casual employees) get paid annual leave as stipulated by the National Employment Standards (NES) contained in the Fair Work Act. In general, employees are entitled to a minimum of 4 weeks paid leave (5 weeks for shift workers).
The NES also states that if the period during which an employee takes annual leave includes a public holiday or a period of another kind of leave (including sick leave, personal leave, etc.), that time is not regarded as annual leave. Annual leave is paid at the same rate as the regular salary rate, but there may be exceptions within the employee’s award, contract, or workplace agreement with an additional annual leave payment due of up to 17.50%.
In addition, each state in Australia has an entitlement for employees to have long service leave. For Western Australia, it is eight and two-thirds weeks’ leave after ten years of continuous service, with four and one-thirds weeks’ leave for each subsequent period of five years of continuous service.
The NES entitles permanent employees to 10 days of paid sick leave and 2 days of paid compassionate leave per year (personal or carers leave).
An employee may take leave if they are unfit for work because of their own personal illness or injury or provide care or support to a member of their immediate family.
The Paid Parental Leave Act provides financial support to eligible working parents of newborn or recently adopted children. Parental leave is paid to the child’s primary carer for up to 18 weeks based on the national minimum wage rate. The new leave policy, effective from July 2021, allows both parents to take 2 weeks concurrently at the time of birth, adoption, or surrogacy and up to 12 weeks separately to assume primary care duties. An employee is not entitled to parental leave under the NES unless they have 12 months of continuous service or are a “long-term casual employee.” The casual employee must have been employed regularly and systematically for at least 12 months. This is fully funded by the Australian Government, though employers must process the payments through their payroll.
Employers can also provide for paid parental leave in registered agreements, employment contracts, and workplace policies which do not impact the employee’s eligibility for the Australian Government’s Paid Parental Leave Scheme so the employee can be paid both.
In addition, employees who have worked for more than 12 months are entitled to at least 12 months of unpaid parental leave if the employee is or will be responsible for caring for a child or adopted child under 16 years old.
PAID MATERNITY LEAVE (DAYS)
Paternity leave falls under the Paid Parental Leave Act (see Maternity Leave).
Parental leave falls under the Paid Parental Leave Act (see Maternity Leave).
The NES stipulates that employees are entitled to be absent from work for 3 main reasons, all to undertake community service activities.
- Jury Service: (Jury service is paid, when employees take leave for jury service, they receive jury service pay from the government and employers then top this up to their usual pay for up to 10 days at the rates set at the time)
- Voluntary emergency management activity (unpaid leave)
- Activity in community service that the regulations prescribe (unpaid leave)
The leave period includes reasonable travel and rest time prior to, and following, the eligible activity, and the employee must aim to provide as much prior notice and information as possible.
There are several complex laws relating to termination processes in Australia. To ensure the correct process is followed, employers must adhere to the 4 key areas below to ensure the termination of an employee for the right reasons.
- Capacity: If an employee lacks the ability or capacity to complete the job
- Performance: Unsatisfactory performance of the employee, which is outlined clearly to the employee with the opportunity for them to rectify their conduct
- Misconduct: Failing to adhere to workplace standards, or if the employee is involved in serious misconduct
- Redundancy: If the job the employee is completing is no longer necessary for the business, or technological change has made their role unnecessary
Employees must have completed 6 months of service (12 months for a small company) before they can make an unfair dismissal claim.
An additional legal requirement for the employer is to provide the employee with an employment termination letter that must include confirmation of:
- Reason for the termination
- Date of the employee’s last day of work
- The fixed number of payments or entitlements and any unpaid wages the employee will receive as final pay
The Fair Work Act 2009 stipulates that the minimum notice period for termination varies based on the length of employment:
- Less than 12 months of employment: 1 weeks’ notice
- 1-3 years of employment: 2 weeks’ notice
- 3-5 years of employment: 3 weeks’ notice
- 5 + years of employment: 4 weeks’ notice
In addition, if an employee is over the age of 45 and has completed at least 2 years of continuous service, an additional week of notice is required.
However, it is common practice in Australia for the award/contract/workplace agreement to have 4 weeks’ notice instead of the minimum required by law. Despite the minimum notice periods provided in the Fair Work Act 2009, employees who have no notice period specified in their contract of employment may be entitled to what is referred to as ‘a reasonable period of notice’.
The ‘reasonable period of notice’ will set a notice period of greater than the norm, and minimum, for employees with long lengths of service and/or where equivalent jobs/skills are in short supply.
An employer must not terminate an employee unless they have given the minimum period of notice or pay in lieu. This is paid at the employee’s full pay rate as if they had worked the minimum notice period.
All employees must be paid the full final pay as detailed in their award, contract, or workplace agreement together with the appropriate notice-related payments and documentation.
Should an employee be made redundant, redundancy pay is based on the amount of continuous service the employee has and paid based on their regular base salary pay rate:
- At least 1 year but less than 2 years: 4 weeks’ pay
- At least 2 years but less than 3 years: 6 weeks’ pay
- At least 3 years but less than 4 years: 7 weeks’ pay
- At least 4 years but less than 5 years: 8 weeks’ pay
- At least 5 years but less than 6 years: 10 weeks’ pay
- At least 6 years but less than 7 years: 11 weeks’ pay
- At least 7 years but less than 8 years: 13 weeks’ pay
- At least 8 years but less than 9 years: 14 weeks’ pay
- At least 9 years but less than 10 years: 16 weeks’ pay
- At least 10 years: 12 weeks’ pay. There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least ten years of continuous service. This is consistent with the 2004 Redundancy Case decision made by the Australian Industrial Relations Commission.
The commonly used probation period is 6 months (12 months for a small company), although this can be greater or less depending on the award, contract, or workplace agreement. The Fair Work Act does not refer to probation periods. Still, it stipulates that the award, contract, or workplace agreement must clearly specify the period of probation set and how and when performance is to be reviewed.
Under the Migration Act 1958 and the Migration Regulations 1994, employers have a legal obligation to ensure all employees have the right to work in Australia. Even if they already live in Australia and are not Australian citizens, they may be permanent residents or New Zealand citizens on a special class of visa that allows them to remain in Australia indefinitely or have a temporary visa. All these types of visas need to be checked regularly by the employer by the Department of Home Affairs’ online verification system, the Visa Entitlement Verification Online (VEVO).
If an employer cannot find the appropriate person with the required skills or experience for a job, applications can be made to sponsor workers temporarily or permanently. However, skilled workers must generally be included on the “Skilled Occupations List,” and the length of sponsorship is set by the length of time in the sponsored visa.
There are several ways to sponsor a skilled foreign worker:
- Sponsor a skilled worker for permanent migration through the Employer Nomination Scheme (ENS) or the Regional Sponsored Migration Scheme (RSMS)
- Sponsor a worker on a temporary visa through the Temporary Skill Shortage visa (subclass 482), which allows overseas people to come to Australia to work for up to 4 years.
- Take over the sponsorship of temporary migrants already in Australia on skilled work visas.
- Enter a labor agreement that allows you to employ several overseas skilled workers on a permanent or temporary basis by entering a formal labor agreement with the Australian government if the job is not on the Skilled Occupations List.
The standard rate of GST in Australia is 10%.
Stay up to date on payroll & employment law changes
Medicare is now 1.00%
Superannuation increased to 10.50%.
The national minimum wage is now 21.38 AUD per hour and 812.44 AUD per month.
Payroll contributions and personal income tax rates have been updated. Payroll tax will increase to 5.45% on 1st July 2022.
Questions & Answers
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Payroll and Benefits Guide
in Australia – Western Australia
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year’s Day|
|Wednesday||Feb-1||New Year’s Day (substitute day)||Additional public holiday|
|Saturday||May-6||Western Australia Day|
|Tuesday||Feb-21||National Day of Mourning||Special|
|Tuesday||Feb-21||King’s Birthday||(Some regional areas in WA hold the King’s Birthday public holiday on a different date)|
Do all employees require a notice of termination?
An employer does not need to provide a notice if the employee is:
-casual, fixed-term, or seasonal
-fired for serious misconduct
-have a set arrangment