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 labor 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 around the world 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 labor standards for the country’s labor 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. 

Also 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. 

Pension

Australia's pension program, known as superannuation, requires employers to make a minimum 11% contribution (as of 2023) of each worker's salary into their retirement accounts. 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 pension companies 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

Vacation entitlements

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

Workers compensation

Australian employers are required to buy insurance to cover employees who get sick or injured on the job. Australia has 11 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. 

Statutory holidays

Employees in Australia are entitled to different statutory holidays, depending on the state or territory of employment. If a statutory holiday falls on a weekend, employees are typically given a substitute holiday (usually on the first working day following the statutory holiday).

Below are the statutory holidays throughout Australia’s territories.

Create a custom holiday calendar for Australia, design Australia-specific policies, and offer benefits in Australia easily and automatically with Rippling.

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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 to care for a family member that may be ill. They can also get up to 2 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
• Have been impacted by domestic violence
• Provide care for a loved one impacted by domestic violence

You must respond to an employees request for flexible working arrangements with 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 government health insurance plans (known as Medicare) some employers compete for top talent by offering supplemental insurance benefits with more robust coverage.

Extended healthcare coverage may include things like physical therapy, dental, and optical coverage—all of which traditional Medicare plans don’t provide. 

Life insurance

In Australia, 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 can pay part or all of the premiums for supplemental life coverage for their employees, even though this isn't a required benefit.

Long-term disability

Australian employers may offer additional long-term disability insurance, which can provide financial assistance for employees while they are unable to work. Premium costs range from 0.8% and 1.2%, and plans can cover three-quarters of an employee’s salary plus 10% of their superannuation contribution with a one-to-three-month wait and a five-year benefit period. 

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 vacation time, extra parental leave, paid personal days, or flexible leave policies.

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

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

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

We offer a native Employer of Record (EOR) service, which allows you to hire employees in Australia, enroll them in benefits, and run payroll in 90 seconds—even if you don't have a legal entity there.

Rippling’s EOR is built on top of our native payroll rails, which means that when the time comes to bring HR in-house, you can move from our EOR to Global Payroll through your own entities—in minutes.

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.