Australia

Facts & figures

Government Type: Federal parliamentary democracy under a constitutional monarchy

Capital: Canberra

Currency: Australian Dollar (AUD)

Languages: English

GDP Per Capita: 50,400 USD (2018)

Main Business sectors: 75.3%

Industry: 21.2%

Agriculture: 3.6%

Employment Rate: 93%

Higher Education Rate: 40.6%

Australia has become one of the most open markets, thanks to a process that increased productivity, stimulated growth and made the economy more flexible and dynamic. Australia plays an active role in the WTO, APEC, the G20 and other trade forums and enjoys a free trade agreement with China.

For almost two decades, Australia had benefited from a dramatic surge in its terms of trade. As export prices increased faster than import prices, the economy experienced continuous growth, low unemployment, contained inflation, very low public debt, and a strong and stable financial system.

Global People has a significant advantage in the Australian market, thanks to an accurately designed process, based on our experience providing global employment solutions, extensive professional network and in-depth knowledge of the unique employment culture.

Global people’s services include:

  • PEO and HR management.
  • Realistic calculation of employee compensation.
  • Payroll, tax liabilities, insurance and employee benefits.
  • A designated point of contact for the client and the employees, available for any query or question that may rise.
  • Accessible consultation and professional opinions.

Employment Manual

Australia has a highly regulated employment system with a complex framework of requirements, differing between occupations and industries, and in some cases, between states and territories.

The Fair Work Act includes the national employment standards that define a set of 10 minimum entitlements applying to all employees, including restrictions on maximum working hours, paid and unpaid leave, notice of termination of employment and severance pay.

The employment agreement or contract must comply with the national employment standards and the state of federal regulations and law. The agreements must refer to:

  • Basic pay and working hours
  • Paid overtime
  • Entitlement to sick leave
  • Entitlement to paid leave
  • Allowances
  • Severance pay

Termination

Employers may terminate employment by notice in writing in any time, on one of seven grounds, described below:

  • The employee is excess to the employer’s requirements
  • The employee lacks, or lost an essential qualification for performing his duties
  • Unsatisfactory performance of the employee’s duties
  • Inability to perform due to physical or mental conditions
  • Failure to satisfactorily complete an entry-level training course
  • Failure to meet a condition imposed under subsection 22(6)
  • The employee breached the employer’s Code of Conduct.

The notice period will be based on the employment period:

Employment periodNotice period
Up to 1 year1 week
1-3 years2 weeks
3-5 years3 weeks
5 years or more4 weeks

Employees over the age of 45 that worked for more than 2 years are intitled to an additional weeks’ notice period.

Severance payments are calculated upon the employment period:

Employment periodSeverance Pay calculation
1-24 weeks
2-36 weeks
3-47 weeks
4-58 weeks
5-610 weeks
6-711 weeks
7-813 weeks
8-914 weeks
9-10 years16 weeks
More than 10 years12 weeks

Payroll Taxes

Employment tax varies in the different states and territories both in tax rates and yearly income threshold:

 Tax RateThreshold
Australian Capital Territory6.85%2M AUD
Tasmania6.1%1.25M AUD

Western Australia

5.5%1M AUD

The Northern Territory

5.5%1.5M AUD

New South Wales

5.45%900K AUD

South Australia

4.95%1.5M AUD

Victoria

4.85%650K AUD

Queensland

4.75%1.3M AUD

Employers are required to contribute 9.5% of the employee’s gross salary to a Superannuation fund, which is equivalent to a retirement fund, capped at 25,000 AUD per year.

Employers contribute 1% of the employee’s gross salary to Medicare.

Employee Payroll Taxes

Taxable incomeTax
Up to 18,200 AUD0
18,201–45,00019c for each AUD over 18,200 AUD
45,001-120,0005,092 AUD + 32.5c for each AUD over $45,000
$120,001 – $180,00029,467 + 37c for each AUD over $120,000
$180,001 and over$51,667 + 45c for each AUD over $180,000

Employees pay for Medicare levy, as described:

 Base tier1st tier2nd tier3rd tier
Single thresholdUp to 90K90-105.5K105-140KMore than 140K
Family thresholdUp to 180K180-210K210-280KMore than 280K
Medical levy01%1.25%1.5%

Mandatory Employee benefits

Mandatory Paid leave days

  • Every employee is entitled to 4 weeks paid vacation.
  • All full-time employees are entitled to 10 days of sick or personal leave.
  • Sick days can be accumulated from year to year.
  • Employees can use the sick days to tend to family and other dependents.
  • Australia has 7 national holidays.
  • States and territories also mark special holidays.
  • Employees working for more than 12 months are entitled to a paid maternity leave.
  • The newborn’s mother or father are entitled to 18 weeks of paid maternity leave.
  • The newborn’s mother or father can take an additional 12 months unpaid
  • Fathers and partners are entitled to 2 weeks of parental leave.

Specific Employee Benefits and Industry Benchmarks

Most employers grant employees additional paid leave days, which amount to 5 annual weeks yearly.

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