Our Info Base is a collection of fact sheets, templates, downloadable forms, lodgement checklists, taxation details and other relevant information. 

Select a topic to view details »

Checklist for Employers

1. Check Fair Work conditions

Before you employ someone, you should read through the National Employment Standards as set out by Fair Work to ensure you can meet the necessary requirements. The National Employment Standards are 10 minimum entitlements that have to be provided to all employees, including maximum hours, leave requirements and termination notice periods.

Read the full list here.

Fair Work also provides a list of national awards and agreements, that outline the minimum standards for a range of industries. These detail classifications of roles within each industry as well as minimum wages for each classification.

Read more about awards and agreements here.

2. Registration

Make sure your business is registered for PAYG withholding with the ATO before you start paying wages to an employee. This allows you to withhold PAYG tax from your employees’ wages as well as report wages paid to the ATO.

A sole trader, partnership, company or trust operation can register for PAYG withholding. AFYF can assist with this registration requirement.

3. Clarify & document

Before you begin recruiting you should consider what type of employment and what salary or rate you will be offering, depending on your current business needs. Take into consideration the national minimum wage and award requirements, if relevant, before deciding on your employee’s rate or salary. You should always discuss salary and wages in pre-tax terms with your staff.

You can employ staff on either a casual, part-time or full-time basis:

• Casuals may work different hours each week; they do not accrue holiday or sick leave; and are generally paid at a higher rate than part or full-timers in the same role because they are not entitled to paid leave
• Full-time employees work 38 hours each week; generally the same hours and days each week; and they accrue holiday and sick leave. Leave is accrued on the basis of 20 days of holiday leave and 10 days of sick leave each year. 
• Part-time employees work less than 38 hours a week; generally the same hours and days each week; and they accrue holiday and sick leave. Their leave is accrued based on the amount of hours worked each week.

The below documents should be provided to all employees at the beginning of employment:

• Job offer – a letter of offer outlines the terms and conditions of the job being offered, including the start date of the role, the job title, the remuneration rate and the terms for resignation or termination. Download a template here.
• Job description – a job description lists all the duties and responsibilities involved in the offered role, and should include the aim or objective of the role and the business. We have various job descriptions available to download here.

4. Employee forms

Once you have the right employee for the role, you will need them to fill in and provide the below forms to you to ensure you have all their current contact and tax details in order to calculate their wages accurately:

• Tax file number declaration form – this form provides the details needed to know what tax rate your employee’s wages should be calculated on. It includes details of whether or not an employee has a HECS/HELP debt, whether they are a resident for tax purposes and whether they are claiming the tax-free threshold on their wages. Once completed the form should be lodged with the ATO. If an employee’s details change at any time, a new form should be completed and lodged. A blank form can be downloaded from the ATO here.
• Super choice form – this form provides you with the necessary details to make super contributions for your staff.  A blank form can be downloaded from the ATO here.
• Contact details form – this is a general form you should request for your own records, and should include details such as phone and address info, an emergency contact, and bank account details for wage payments.

5. Workers compensation insurance 

Workers compensation insurance is a legal requirement for all employers in Australia and provides protection to employees if they suffer a work-related injury or disease. Each state and territory is managed separately, and in NSW it is administered by icare.

Please note, some employers are exempt, for example if your annual wages paid are under $7,500, if you haven’t hired any apprentices, and are not a member of a group.

To sign up to workers compensation insurance you will need to contact the provider in your state or territory and provide an estimate of wages you are expecting to pay for the year and the number of employees the business will have. You will also need to describe what industry the business is in, as this will help determine your insurance premiums.

Each year you will need to provide details of the actual wages paid to employees in case you paid more or less than what was estimated. Your workers compensation provider will then issue an adjusting invoice or a credit note. AFYF can assist with this annual lodgement requirement.

6. Superannuation

Superannuation must be accrued at 11.5% of gross wages paid to an employee. The superannuation rate is set to increase by 0.5% every financial year until it reaches 12%.

Employees under 18 years of age need to work more than 30 hours a week to be entitled to super contributions.

Under SuperStream requirements superannuation must now be paid through a superannuation clearing house. The ATO offers a free clearing house service for small businesses plus various super funds also offer their own clearing houses, some for a fee.

Superannuation contributions are payable each quarter. Contributions are due on the 28th day of the month following the end of each quarter, for example the January-March quarter super is due by 28 April. Contribution details should be lodged each quarter prior to payment.

AFYF can assist with the set up of an ATO clearing house as well as the ongoing contribution lodgements.

7. Withholding tax

PAYG tax must be withheld on staff wages, based on current tax tables and the details provided by your employee on their tax file number declaration form. Current tax tables are available on our website here.

If your employee is on a working holiday visa, you must register as an employer of working holiday makers with the ATO and withhold tax at the relevant rate.

PAYG tax withheld is reported and paid to the ATO in the quarterly or monthly BAS or IAS lodgements.

If you are already registered for GST, the PAYG withheld on wages is reported in the same BAS form as your income and GST. There is a separate section added on to the form for wages and PAYG tax withheld once you register for PAYG withholding with the ATO.

8. Leave entitlements

Full and part-time employees are entitled to annual leave and sick/personal leave throughout the year. Leave is accrued based on hours worked, with the national minimum for full-time employees being 20 days a year for annual leave and 10 days a year for sick/personal leave.

Other types of leave that an employee may be entitled to are:

• Paid parental leave
• Bereavement leave
• Long service leave
• Unpaid leave

9. Health and safety

Under workplace health and safety laws employers are responsible for making sure your work place is safe for your employees. Employees should be made aware of any rules and requirements in place to keep themselves and the work environment safe.

This covers making sure any machinery or materials are operated properly, training and supervision is provided to employees as well as ensuring no employee is unfairly discriminated against.

10. Records

The ATO requires all payroll records are kept for at least 7 years from lodgement.

As of 1 July 2019 all employers, besides those who are exempt under the 'closely-held payees' rule, need to report wages, tax and super information to the ATO with each pay period as part of the new Single Touch Payroll (STP) process. To do this your record-keeping software must be STP compliant.

The 'closely-held payees' exemption refers to those employers who only employ family members in a family run business, directors or shareholders of a company, or trustees of a trust. 

To discuss whether your bookkeeping software is STP compliant please contact our office.

11. Payslips

Under Fair Work requirements a payslip must be provided to the employee with each wage payment, documenting:

• Your business name & ABN
• The employees full name
• Whether an employee is casual, part-time or full-time
• What period the payslip covers
• The employee’s annual salary or pay rate
• The gross wages for the particular pay period – including details of any leave that may have been taken and a breakdown of any penalty rates paid, such as Saturdays, Sundays, etc.
• The tax withheld, if any, for the particular pay period
• The net wages paid to the employee for the particular pay period
• Annual leave accrued during the pay period
• Super accrued during the pay period
• The name of the super fund the employee is with
• Payslips may also include the YTD figures for all of the above as well

12. STP Finalisation

PAYG Payment Summaries are no longer provided to employees each year, instead the wages paid through the year are reported to the ATO in the STP filing each pay run, and then finalised and closed off as part of the annual STP finalisation. 

The STP finalisation confirms the gross wages, tax withheld, reportable superannuation, fringe benefits and allowances paid to an employee. They can also include any relevant deductions, if applicable, such as union fees.

STP finalisation should be lodged electronically with the ATO by 14 July each year. The employees can access the details lodged with the ATO via their MyGov accounts. 

13. Review

Make sure you put procedures in place so you can review and document your employee’s performance regularly. This will allow you to address any issues in the workplace in a timely manner as well as consider pay increases based on accurate information.