The complete guide to offering employee benefits in Australia

When hiring in Australia, creating the right benefits package is necessary for compliance—but can also be your gateway to attracting and retaining top talent and boosting employee engagement. Australia’s labor laws set a strong foundation for employee entitlements, but going beyond the basics can help your business stand out.In this guide, we explain everything you need to know about offering mandatory and supplementary benefits for employees in Australia. Whether you're hiring your first employee in Australia or refining benefits packages for your existing workforce, this guide is your ultimate resource.

What employee benefits are mandatory in Australia?

Australian law mandates specific company benefits programs under the National Employment Standards (NES), which outline the minimum labor standards for the country’s workforce. If you fail to provide these mandatory benefits to your Australian employees, you risk facing hefty fines.

Although these benefits apply to all employees, pay rates and conditions vary based on the worker’s "Modern Award," which sets different requirements according to industries and job categories.It’s important to remember that the government’s required benefits represent statutory minimums. You can always go beyond these requirements to offer more comprehensive benefits. Additionally, these mandatory benefits apply only to employees. Independent contractors in Australia aren’t entitled to benefits.

Superannuation

Australia’s pension system, known as superannuation or super, requires employers to contribute a minimum of 11.5% (as of 2024) of each employee's salary to their super fund. This mandatory contribution, called the Super Guarantee, will increase by 0.5% annually until it reaches 12% on July 1, 2025.

Employees can also make voluntary contributions to their super fund. Many employers exceed the minimum Super Guarantee, offering higher contributions based on industry standards or employment agreements.

Employees typically choose their preferred super fund from a list of approved providers. If an employee doesn't nominate a fund, you can direct contributions to a default fund. Default funds must meet specific compliance requirements, including:

• Offering a standalone investment option

• Providing a minimum level of insurance coverage

• Adhering to governance and transparency regulations

Vacation entitlements (annual leave)

In Australia, annual leave refers to holiday pay. Full-time employees receive a minimum of 20 days (four weeks) of paid annual leave each year. Part-time employees earn annual leave on a pro rata basis. Casual employees don't qualify for annual leave.

Employees accrue leave throughout the year based on their ordinary hours worked. Many employers allow employees to buy extra leave by sacrificing part of their salary, a process known as salary sacrificing. Some Modern Awards and employment agreements also include leave loading, which adds an extra 17.5% to their base pay when an employee takes annual leave.

Workers' compensation

In Australia, workers’ compensation protects employees who suffer work-related injuries or illnesses. It ensures workers receive the support they need to recover while protecting businesses from financial liability. If you have employees in Australia, you must purchase workers’ compensation insurance to cover medical expenses, rehabilitation costs, and lost wages for affected employees. Insurance premiums are often a percentage of the employee’s salary and can vary depending on industry, claim history, and remuneration.

Australia operates 11 distinct workers’ compensation schemes across its states and territories. Each region sets its own rules, regulations, and coverage requirements. Here’s a breakdown of the schemes:

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Statutory holidays (public holidays)

In Australia, statutory holidays (or public holidays) vary by state and territory, giving employees time off to observe national, regional, and cultural events. The NES entitles full-time and part-time employees to a paid day off on public holidays, based on their regular work hours.

When a public holiday falls on a weekend, most states and territories offer a substitute holiday, typically on the next weekday. It’s important to stay aware of regional differences to ensure compliance and avoid scheduling conflicts.

Common national public holidays:

• New Year’s Day (January 1)

• Australia Day (January 26)

• Good Friday (Varies each year)

• Easter Monday (Varies each year)

• Anzac Day (April 25)

• Christmas Day (December 25)

• Boxing Day (December 26)

State-specific public holidays:

Each state and territory observes additional public holidays. Examples include:

• Labour Day: Varies by state (e.g., March in VIC, October in NSW)

• Queen’s Birthday: June in most states, but September in WA

• Melbourne Cup Day: First Tuesday of November (VIC)

Sick and compassionate leave

Full-time and part-time employees receive up to 10 days of personal leave per year as part of their mandatory employee benefits. This covers sick leave or caring for an immediate family or household member who's ill or injured. Employees can take this leave as it accrues based on their regular hours worked.

In addition, employees can take up to two days of paid compassionate leave per occasion if an immediate family member or household member dies or suffers a life-threatening illness or injury. Compassionate leave allows employees to grieve, arrange funerals, or provide necessary support.

Family and domestic violence leave

All employees, including full-time, part-time, and casual workers, receive 10 days of paid family and domestic violence leave per year. Employees can use this leave if they or a close family member experience domestic violence and need time to manage related issues. These can include attending court, relocating, or accessing support services.

It’s vital to handle requests for this leave with strict confidentiality to protect employee privacy.

Parental leave

Employees who act as the primary carer of a newborn or adopted child qualify for up to 12 months of unpaid parental leave. After the initial 12 months, employees can request an additional 12 months of unpaid leave. This entitlement applies equally to all employees, regardless of gender.

Eligible employees can also receive up to 22 weeks of paid parental leave, funded by the Australian government. This leave pays at the national minimum wage, and employers administer the payment once the government approves the employee’s application.

Long service leave

Employees in Australia earn long service leave for staying with the same employer for an extended period. The entitlement varies based on the state or territory, typically ranging from two to three months of paid leave after seven to 10 years of continuous service. It’s imperative that employers track long service leave accruals accurately and ensure employees receive their entitlements according to state or territory regulations. Here’s a breakdown by region:

Flexible working arrangements

Full-time and part-time employees in Australia can request flexible working arrangements after 12 months of continuous employment. These arrangements may include options like adjusting start and finish times, working from home, or changing work hours to balance personal responsibilities.

Employees can request flexible working arrangements if they:

• Care for a child (including being a parent or legal guardian)

• Are pregnant

• Live with a disability

• Are 55 years or older

• Experience domestic violence

• Care for a family member experiencing domestic violence

Employers must respond to these requests within 21 days. Failing to respond or unreasonably refusing a request can result in significant penalties. 

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Supplementary benefits in Australia

Many employers offer supplementary benefits to attract and retain top talent. These perks go beyond Australia’s legally required benefits and can enhance employee satisfaction and wellbeing. Here are some common supplementary benefits:

Health insurance

All Australian employees have access to the government-funded health system, known as Medicare. However, many employers offer private health insurance to provide additional coverage and stand out from other employers.

Supplemental health plans often cover services that Medicare doesn't, such as physiotherapy, dental care, and optical services. 

Life insurance

Life insurance in Australia provides lump-sum payments to an employee’s family if the employee dies due to an accident, illness, natural cause, or act of violence. Premiums typically range from 0.5% to 0.8% of an employee’s salary, depending on their age, occupation, and location.

Many employers pay for part or all of their employees’ life insurance premiums. 

Long-term disability

Some employers offer long-term disability insurance to provide financial support when employees cannot work because of illness or injury. These plans usually cover up to 75% of an employee’s salary, plus 10% for superannuation contributions. Premiums typically range between 0.8% and 1.2% of an employee’s salary.

Long-term disability insurance often includes a waiting period of one to three months and a benefit period of up to five years. 

Paid time off

Sometimes, employers may offer paid time off (PTO) beyond Australia’s statutory minimums to make their workplaces more attractive. Additional PTO may include:

• Extra vacation days beyond the standard four weeks of annual leave

• Extended parental leave

• Paid personal days

• Flexible leave policies that allow employees to balance work and personal needs

5 additional employment benefits to attract employees in Australia

Here are five additional benefits to consider adding to your employee benefits programs in Australia:

1. Employee wellness programs

Employee wellness programs are a great way to show you care about your team's health and well-being. Many employers offer gym memberships or access to mental health support services to promote a healthy lifestyle, body, and mind. These perks can boost morale and help keep your employees happy and productive.

2. Education and professional development support

Investing in your employees’ growth benefits both your team and your business. An employee benefits package can include education allowances, training courses, or professional development workshops. Supporting ongoing learning can help you create a more skilled and engaged workplace.

3. Childcare

Childcare support helps working parents stay focused and productive during work hours. Offering allowances for childcare or access to childcare services ensures employees can manage their family responsibilities without worry. These benefits can improve employee satisfaction and reduce stress while on the job.

4. Company car

A company car is a practical benefit for employees who travel for work. Including this in your employment benefits in Australia can help reduce personal costs for commuting or client visits. Employees highly value this benefit in industries where travel is frequent.

5. Employee discounts and perks

Give your team extra value through employee discounts and perks. Popular options include supermarket discounts, health insurance rebates, and travel expense reimbursements. These employee benefits can make your workplace more attractive and show you care about employees’ daily needs.

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Hiring and offering benefits in Australia made simple with Rippling

Managing a global workforce is no small feat. Keeping benefits compliant across multiple countries is challenging enough—but add in offer letters, equipment logistics, payroll, and everything else that employees and contractors need, and the complexity grows exponentially.

That's why, if you're going to hire employees, contractors, or remote workers in Australia, you need Rippling. 

Rippling EOR is built different.

Managing an international workforce goes way beyond just hiring and paying—it’s headcount planning, time and attendance, learning and performance management, device ordering, app provisioning, and more. Other solutions only offer native EOR and HRIS or rely on clunky integrations for these other tools, slowing you down and requiring you to constantly reenter information between systems. Rippling is the only provider that built a whole suite of tools on a unified employee data model so that you can manage your entire global workforce in one system.

• Onboard in minutes. Hire and onboard global employees to maximize productivity on day one. Rippling handles everything from benefits enrollment to assigning required trainings.

• Pay locally in days—not weeks. Pay all of your employees around the world without delay. Rippling does the calculations and money movement for you. You’ll be free to focus on what matters.

• Automate global compliance. Double-checking compliance risks takes time. Rippling runs securely in the background, continuously flagging potential risks.

• Unify HR, IT, and Finance. Data entry and duplicate systems waste time. Every team has one source of employee data, so speedy automation can take on manual work.

FAQs about employee benefits in Australia

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Access the 2025 Australian Payroll & Hiring Intelligence Pack

Get essential insights for growing businesses including:

• Compliance trends reshaping Australian payroll

• Industry benchmarks and salary insights

• Strategic recommendations for FY25

• Productivity forecasts for FY25

• Expert analysis of hiring trends

Email address

Unlock your first report

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We value your privacy. Learn more.

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This blog is based on information available to Rippling as of December 17, 2024.