The complete guide to offering employee benefits in Australia

When hiring employees in Australia, it's vital to provide them with the right benefits package to comply with the country's labour laws. Gain insights into the essential requirements and learn how to exceed expectations for your Australian staff with this guide.

Where can I get quotes for Australian employee benefits?

Rippling partners with brokers and insurance carriers worldwide to give your Australian employees access to big business benefits at affordable prices—including health insurance, registered retirement savings plans, etc.

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What employee benefits are mandatory in Australia?

Mandatory benefits programs are required by Australian law, set by the National Employment Standards (NES), which set the minimum labour standards for the country’s labour force. If you employ an Australian worker and fail to offer them these mandatory employee benefits, you could wind up with a hefty fine. 

While these benefits are mandatory for all Australian employees, the exact pay rates and conditions will vary depending on the worker’s 'Modern Award,' which sets different requirements depending on the job category. 

Keep in mind that the benefits required by the government of Australia are statutory minimums, and employers can always offer more than these mandatory benefits. Also, note that these benefits are mandatory for full-time employees—independent contractors in Australia aren't entitled to these benefits. 

Superannuation

Australia's pension program, known as superannuation, requires employers to contribute a minimum of 11% (as of 2023) of each worker's salary to their superannuation funds. This 'super guarantee' rate will increase by 0.5% each year until it reaches 12% in 2025. Employees are also encouraged to make their own voluntary contributions, and many employers contribute more than this minimum threshold based on industry norms. 

Employees choose from a list of superannuation funds and nominate their preferred 'super fund' for employers to send contributions. Employers also have a 'default fund' where they funnel super guarantee payments for workers who haven’t chosen their own. These funds are required to have certain compliance features, including:

• A standalone investment option
• A minimum threshold of insurance coverage
• Governance and transparency regulations

Annual leave entitlements

Full-time and Part-time employees get a minimum of 20 days (4 weeks) of paid annual leave for every year they work. Many employers allow workers to 'buy' extra days by sacrificing a portion of their salary. 

Worker's compensation

Australian employers are required to buy insurance to cover employees who get sick or injured on the job. Australia has 11 main workers' compensation schemes across its states and territories, listed below:

Insurance premiums are often a percentage of an employee’s salary and vary depending on industry, claim history, and remuneration. 

Public holidays

Employees in Australia are entitled to paid public holidays. The days the public holidays fall on may depend on the state or territory of employment. Employees are typically given a substitute holiday (usually on the first working day following the statutory holiday) if a public holiday falls on a weekend.

Below are the public holidays throughout Australia’s territories:

With Rippling, you can easily and automatically create a custom holiday calendar for Australia, design Australia-specific policies, and offer benefits in Australia.

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Sick and compassionate leave

Full-time and Part-time employees are allowed 10 days of 'personal leave' per year, which can be used if they fall ill or need to care for a family member who may be ill. They can also get up to two days of paid 'compassionate' leave per occasion, if a family member dies or becomes terminally ill.

Family and domestic violence leave

All employees are allowed 10 days of paid 'family and domestic violence leave’ per year, which can be used if they or a family member is directly affected by family and domestic violence. 

Parental leave

Employees who, regardless of gender, are the primary carers of newborn or adopted children are entitled to 12 months of unpaid leave, with the ability to request an additional 12 months of unpaid leave.

Some employees may also be entitled to up to 20 weeks of parental leave, paid at the national minimum wage. The employer does not bear the costs: this is a government-managed entitlement, where the employer's role is to administer the funds if the employee is assessed by the government as eligible.

Long service leave

Employees who stay with the same company for 7 to 10 years earn 2 to 3 months of paid leave, depending on the jurisdiction (as shown below). 

Flexible working arrangements

Eligible full-time employees who have worked at the same company for at least a year can request flexible working arrangements like starting work later to help with childcare duties. Australian employees can request these arrangements if they:

• Are the parent or carer of a child
• Employees who are pregnant
• Have a disability 
• Are at least 55 years of age
• Have been impacted by domestic violence
• Provide care for a loved one impacted by domestic violence

You must respond to an employee's request for flexible working arrangements within 21 days of their request, or face harsh penalties.

Supplementary benefits in Australia

In addition to the required benefits, many Australian employers also provide additional benefit plans and perks to help them attract and retain employees. Some of the most common supplementary benefits are below:

Health insurance

While all Australian employees are covered by Medicare, some employers compete for top talent by offering supplemental private health insurance benefits with more robust coverage.

Private healthcare coverage may include things like physical therapy, dental, and optical coverage—all of which aren't covered by Medicare.

Life insurance

Life insurance plans disburse lump-sum payments to family members impacted by deaths due to accidents, medical complications, natural causes, terminal illnesses, and acts of violence. Premiums fall between 0.5%-0.8% of an employee’s salary depending on their age, job, and location. Employers may choose to pay part or all of the premiums for supplemental life coverage for their employees.

Total and permanent disability (TPD) insurance

Total Permanent Disability (TPD) insurance provides a lump-sum payment to individuals who are permanently unable to work due to injury or illness. This type of insurance is designed to help cover rehabilitation costs, medical expenses, and the financial impact of not being able to earn an income in the future. Premium rates for TPD insurance vary based on factors such as the individual's age, occupation, and health status, typically ranging from a small percentage of the individual's salary. Employers may choose to contribute towards or fully cover TPD insurance premiums as part of their employee benefits package.

Paid time off

Many employers offer paid time off beyond Australia's statutory minimums to make their workplaces more attractive to top workers. Paid time off can include additional annual leave, parental leave, personal days, or flexible leave policies.

How to hire employees and offer them affordable benefits in minutes—with Rippling

Running a workforce isn't easy. It can be a challenge for companies just to keep their benefits compliant—let alone manage offer letters, equipment, payroll, and everything else employees and contractors need.

That's why, if you're going to hire employees or contractors, you need Rippling. Rippling makes it easy to onboard, manage, and pay employees and contractors —all in in one system that helps keep you compliant with employment laws and regulations.

See Rippling today.

Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.