Five payroll obligations every employer should get right
In this article, we outline five key payroll obligations that businesses should understand and manage carefully.
1. PAYG
Employers must register for PAYG withholding with the ATO before making their first payment that is subject to withholding. The due dates for paying and reporting withheld amounts depend on whether the employer is classified as a small, medium or large withholder:
- Small withholder: An employer that withholds $25,000 or less each year is considered a small withholder and must pay withholding amounts to the ATO quarterly.
- Medium withholder: An employer that withholds between $25,001 and $1 million each year is considered a medium withholder and must pay withholding amounts to the ATO monthly.
- Large withholder: An employer that withheld more than $1 million in a previous financial year, or is part of a company group that did so, is considered a large withholder and must pay withholding amounts to the ATO twice weekly'
2. Single Touch Payroll (STP) reporting
Employers must report employees’ tax and superannuation information to the ATO through Single Touch Payroll (STP), unless they have an exemption or deferral from the ATO. Information reported through STP includes:
- year-to-date amounts for salary or wages, allowances and deductions;
- PAYG withholding; and
- Superannuation liability.
STP reporting is required for each pay event, when payments subject to withholding are made, or for each update event, such as a transition, correction or finalisation.
The current ATO framework, STP Phase 2, provides greater detail on how employers report payments and related employee information. This includes:
- employee income types, such as salary and wages (SAW), closely held payees (CHP) and working holiday makers (WHM);
- disaggregation of gross payments, including gross amounts, paid leave, allowances, overtime, bonuses and commissions. Allowances must also be disaggregated according to their purpose; and
- salary sacrifice amounts.
Employers are required to lodge STP reports on or before the employee’s pay date.
3. Superannuation
Employers must contribute superannuation at the statutory rate on the Qualifying Earnings up to the maximum superannuation contribution base (MSCB). The MSCB sets the maximum earnings base for each employee for each financial year. Employers are not required to provide minimum superannuation support on earnings above this limit.
The statutory superannuation guarantee rate is 12% from 1 July 2026 for the 2026/2027 financial year.
The maximum superannuation contribution base for the 2026/2027 financial year is $270,830 per year.
From 1 July 2026, employers will be required to pay employees’ superannuation guarantee contributions each payday. Contributions will generally need to be received by the employee’s super fund within seven business days after salary or wages are paid, together with sufficient information for the fund to allocate the contribution to the employee’s member account.
Under Payday Super, the superannuation guarantee rate remains 12%, but the calculation base will change from ordinary time earnings to qualifying earnings. Qualifying earnings are intended to bring together ordinary time earnings and other payments that are currently included for superannuation guarantee purposes, such as certain commissions and salary sacrifice contributions.
Employees may also make personal concessional contributions to their superannuation fund each year, up to the concessional contributions cap, without paying additional tax. From 1 July 2026, the concessional contributions cap is $32,500 per income year.
4. Payroll tax
Payroll tax is levied on wages paid or payable by an employer to its employees when the employer’s total taxable wages, or the taxable wages of a group of employers, exceed the relevant threshold. Payroll tax is self-assessed and lodged by the employer.
Payroll tax is administered by the revenue office in each state and territory. Rates and thresholds vary by jurisdiction, as detailed in the table below:
State/Territory | Rates | Thresholds | Maximum Annual |
|---|---|---|---|
| Australian Capital Territory | These are the rates and thresholds applying on or after 1 July 2026.
Note that the rate of payroll tax for eligible universities within the ACT is capped at 6.85 per cent. | Annual Monthly | Same as annual threshold |
| New South Wales | 5.45% | Annual $1,200,000 | Same as annual threshold |
| Northern Territory | 5.5% | Annual Monthly Weekly | Same as annual threshold |
| Queensland (Qld) | 4.75% $6,500,000 or less 4.95% more than $6,500,000 Regional employers may be entitled to a 1% discount on the rate A mental health levy will apply to employers and groups of employers who pay
| Annual Monthly
| Same as annual threshold |
| South Australia | 0% to 4.95% Exceeds $1,500,000 but not $1,700,000 4.95% Exceeds $1,700,000 | Annual Monthly Weekly | $600,000 |
| Tasmania | 4% $1,250,001 - $2,000,000 6.1% $2,000,001 or more | Annual Weekly | Same as annual threshold |
| Victoria | 4.85% 1.2125% for regional employers From 1 July 2024, employers and groups with total annual taxable
Two surcharges apply if you pay Victorian taxable wages and your Australian wages exceed the first annual threshold of $10 million, with a first monthly threshold of $833,333.
Both surcharges are calculated on the same basis:
The surcharges only apply to businesses’ Victorian share of wages over these thresholds. | Annual Monthly | Same as annual threshold |
| Western Australia | 5.5% In WA, the deduction/threshold entitlement may reduce as wages paid increase. | Annual Monthly | Same as annual threshold |
*If you employ for part of the financial year or in more than one state or territory, your deduction/threshold entitlement may be reduced. In some states and territories the deduction/threshold entitlement may reduce as wages paid increase.
5. Workers’ Compensation Insurance
Workers’ compensation is a form of insurance that provides payments to employees if they are injured at work or become sick because of their work. Workers’ compensation can help cover:
- wages while the employee is not fit for work; and
- medical expenses and rehabilitation costs.
Workers’ compensation is governed by each state and territory, with a separate regulator responsible for administering the scheme and providing guidance. These regulators include:
- Australian Capital Territory: WorkSafe ACT
- New South Wales: State Insurance Regulatory Authority (NSW)
- Northern Territory: NT WorkSafe
- Norfolk Island: Norfolk Island Workers Compensation Scheme
- Queensland: WorkCover Queensland
- South Australia: ReturnToWork SA
- Tasmania: WorkSafe Tasmania
- Victoria: WorkSafe Victoria
- Western Australia: WorkCover WA
- Common wealth/ National; Comcare
- Safe Work Australia
Employers must hold workers compensation insurance in each state or territory where they employ workers, to protect both the business and its employees.
Want to know more?
Our outsourcing specialists have the knowledge and expertise to help you meet your payroll-related obligations. For assistance, please contact your usual Forvis Mazars advisor or one of our outsourcing specialists below:
| Melbourne - Jonathan Cicutto | Sydney – Padmini Dixit |
| +61 3 9252 0800 | +61 2 9922 1166 |
Date published: 18 August 2026
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.
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