Employer Obligations in Australia: The Complete 2026 Checklist

Quick Answer

Employers in Australia must pay at least the award or national minimum wage ($26.44 an hour from 1 July 2026), provide the National Employment Standards, withhold PAYG tax and report it through Single Touch Payroll, and pay 12% super so it reaches the employee’s fund within 7 business days of each payday. You must also give payslips within one working day, keep employee records for 7 years, provide a safe workplace and hold workers’ compensation insurance. Contractors carry a different set of obligations, and treating an employee as a contractor brings all of these back with penalties.

In our experience working with over 10,200 Australian businesses, the employers who get into trouble are rarely dishonest. They missed a step when they took on their first worker, and the gap grew every pay run.

This guide sets out your employer obligations in the order you meet them: before you hire, on day one, every pay run and ongoing.

Click on any of the questions below to jump to that section of this legal guide.

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What are employer obligations in Australia?

Employer obligations are the legal duties you take on when you hire staff: paying them correctly, withholding tax, paying super, keeping them safe and keeping records. Most come from the Fair Work Act 2009 (Cth), the award that covers the job, tax and super law, and your state’s work health and safety and workers’ compensation laws.

What obligations do employers have to their employees?

Employers must pay at least the minimum wage set by the award or agreement, provide the National Employment Standards, and pay super and withhold tax on every pay. They must also provide a safe workplace, give payslips, keep records and not take adverse action or discriminate against employees.

The National Employment Standards (NES) are the floor no contract can go below. They cover maximum weekly hours, flexible work requests, leave entitlements, public holidays, notice of termination and redundancy pay.

What are 5 employer responsibilities in the workplace?

The five core employer responsibilities in Australia are:

1. Pay correctly: at least the award or minimum wage, including penalty rates and overtime.
2. Pay super and tax: pay 12% super with each pay and report PAYG withholding through Single Touch Payroll.
3. Keep people safe: a primary duty of care under work health and safety laws, plus workers’ compensation insurance.
4. Keep records and issue payslips: within one working day of payday, with records kept for 7 years.
5. Treat people fairly: no discrimination, adverse action or unfair dismissal.

Before You Hire

Do you need to register as an employer?

Yes. Before you pay your first employee, register for PAYG withholding with the Australian Taxation Office (ATO) and set up payroll software that reports through Single Touch Payroll. If you have not set up your business structure yet, our guide to registering a business covers the first steps.

You also need a workers’ compensation policy in your state or territory before the employee starts. Payroll tax is a state tax that only applies once your total wages pass your state’s threshold, so most small businesses are not caught by it.

Which award covers your employee?

Most employees are covered by one of more than 120 modern awards, which set their minimum pay, penalty rates and conditions for their industry or occupation. The Fair Work Ombudsman’s Find My Award tool tells you which one applies.

If no award applies, the national minimum wage is the floor: $26.44 an hour, or $1,004.90 for a 38-hour week, from 1 July 2026. Award minimum rates rose by 4.75% on the same date.

Should you hire an employee or a contractor?

Hire an employee when you need someone working in your business, under your direction, on an ongoing basis. Engage a contractor when you need a result delivered by someone who runs their own business.

The label you choose does not decide it. The ATO looks mainly at the written contract, while the Fair Work Act looks at how the relationship works in practice, and the two tests can reach different answers. Our contractor vs employee guide explains both tests.

If you are engaging a contractor, these guides cover the rest:

• Hiring an independent contractor: the legal steps
• Contractor superannuation: when you owe super to a contractor
• Hiring overseas contractors: the extra risks offshore
• Hiring a website designer or developer: a common first contractor

Legal123’s Contractor Agreement template ($199 _^+GST) documents a genuine contractor relationship, in business owner and contractor versions.

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Day One: What a New Employee Must Receive

What documents must you give a new employee?

You must give every new employee the Fair Work Information Statement before, or as soon as possible after, they start. Casual employees must also receive the Casual Employment Information Statement, and fixed-term employees the Fixed Term Contract Information Statement.

Give them these forms to complete:

• A TFN declaration, so you withhold the right amount of tax
• A super standard choice form, within 28 days of their start date (if they do not choose a fund, request their stapled fund from the ATO)
• A written employment contract setting out their role, pay, hours and award

A written contract is not legally required, but it is the evidence you need if a dispute arises. Legal123’s contract review service checks employment contracts against the award and the NES.

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Every Pay Run

How soon must you give an employee a payslip?

You must give every employee a payslip within one working day of paying them. It must show the pay period, gross and net pay, hours and rates, deductions and the super contribution.

Keep time and wage records for every employee for 7 years. Missing records make it very hard to defend an underpayment claim, because the burden shifts to you to prove what you paid.

How does Payday Super change your obligations?

Since 1 July 2026, you must pay super with every pay, not quarterly. Contributions of 12% of qualifying earnings must reach the employee’s super fund within 7 business days of payday, and you report them through Single Touch Payroll.

The ATO has said that in the first year it will not focus on employers who genuinely try to pay on each payday and fix errors quickly (Practical Compliance Guideline PCG 2026/1). Employers with super still unpaid 28 days after the end of the quarter are a priority for compliance action.

Unpaid super is expensive. In 2024-25, the ATO raised $1.73 billion in superannuation guarantee charge liabilities covering about 855,000 employees, and contacted 208,950 employers through reminders, prompts and audits. The same 12% can also apply to contractors paid mainly for their labour: see our contractor superannuation guide.

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Ongoing Obligations

What are an employer’s WHS obligations?

Every employer has a primary duty of care under work health and safety (WHS) law to ensure, so far as is reasonably practicable, the health and safety of workers and anyone else affected by the work. That means identifying hazards, controlling risks, consulting workers and providing training and supervision.

The duty covers psychological hazards such as bullying and excessive workloads, not just physical ones. Workers’ compensation insurance is compulsory in every state and territory once you employ staff, apart from limited exemptions for very small wage bills in some states.

Which workplace policies does a small business need?

At a minimum, a small business needs policies on work health and safety, bullying and harassment, leave, and flexible and remote work. Policies aren’t required by law in every case, but they show you took reasonable steps when something goes wrong.

Our guide to essential workplace policies covers the full list. If staff work from home, our return to office and work from home guide explains how to handle flexible work requests.

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What Changed for Employers from 2024 to 2026

Employment law changed more between 2024 and 2026 than in the previous decade. These are the changes that affect small businesses:

Date	Change	What to do
26 August 2024	New definition of casual employment and a pathway to permanent work	Review casual roles and give the Casual Employment Information Statement
26 August 2024	Whole of relationship test for contractors (section 15AA)	Check that contractor arrangements match reality
26 August 2024	Right to disconnect (from 26 August 2025 for businesses with fewer than 15 employees)	Set clear out-of-hours contact expectations
1 January 2025	Intentional underpayment of wages became a criminal offence	Fix underpayments promptly and keep records
1 July 2026	Payday Super: 12% super due with each pay	Move payroll to per-pay contributions
1 July 2026	Minimum wage $26.44 an hour; award rates up 4.75%; high income threshold $190,100	Update pay rates from the first full pay period
Proposed	Ban on non-compete clauses for employees below the high income threshold (draft bill released September 2026)	Review restraint clauses in new contracts

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What Happens If You Get It Wrong?

What are the penalties for breaching employer obligations?

Breaching the Fair Work Act can cost up to $21,840 per contravention for an individual and $109,200 for a company. For underpayment-related breaches, larger businesses (15 or more employees) face up to $546,000 or three times the underpayment, whichever is greater, and serious contraventions attract much higher penalties.

These figures reflect the Commonwealth penalty unit of $364 that applies from 1 July 2026. Back pay, interest and the superannuation guarantee charge come on top. Check the Fair Work Ombudsman for current amounts.

Misclassifying an employee as a contractor is a separate breach. Our sham contracting guide explains the penalties and the reasonable belief defence.

How to Get Your Employer Obligations Right

Getting your employer obligations right comes down to four steps:

1. Classify each worker correctly as an employee or a contractor, and document it.
2. Put the right agreement in place: an employment contract for employees, a contractor agreement for contractors.
3. Set up payroll for Payday Super and Single Touch Payroll, with the correct award rates.
4. Keep records and review annually, especially after 1 July each year when rates change.

For employees, our lawyers can review your employment contracts through our contract review service. Not sure where to start? Book a 30-minute call ($99 _^+GST), and we will work through your situation with you.

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Frequently Asked Questions

What are the obligations of an employer to an employee?

An employer must pay at least the award or minimum wage, provide the National Employment Standards, pay super and withhold tax, give payslips, keep records and provide a safe workplace. The employer must also meet any extra terms in the employment contract or enterprise agreement.

Do small businesses have to follow the Fair Work Act?

Yes. Almost every private sector employer in Australia is covered by the Fair Work Act, whatever its size. Small businesses with fewer than 15 employees get some concessions, including the Small Business Fair Dismissal Code and no redundancy pay obligation.

Do I need workers compensation insurance for one employee?

Yes, in almost all cases. Workers compensation insurance is compulsory once you employ staff, including a single part-time or casual employee. A few states exempt employers with very small annual wage bills, so check with your state’s scheme.

Do I have to pay super for casual and part-time employees?

Yes. Casual and part-time employees are entitled to 12% super on their qualifying earnings, with no minimum earnings threshold (employees under 18 qualify once they work more than 30 hours in a week). Since 1 July 2026, employers must pay it with each pay under Payday Super.

What records must an employer keep, and for how long?

Employers must keep time and wage records for 7 years, including hours worked, pay rates, gross and net pay, deductions, leave, super contributions and termination details. Records must be legible, in English and available to a Fair Work inspector on request.

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Further Information

• Contractor vs Employee: ATO and Fair Work Tests
• Hiring an Independent Contractor in Australia
• Contractor Superannuation: Who Pays and When
• Sham Contracting: Penalties and How to Avoid It
• Can You Hire Overseas Contractors in Australia?
• How to Hire a Website Designer or Developer
• What Workplace Policies Do I Need for My Business?
• Return to Office and Working from Home
• Contractor Agreement Template

References

• Australian Bureau of Statistics, Counts of Australian Businesses, including Entries and Exits (July 2021 to June 2025)
• Fair Work Ombudsman, Annual Wage Review 2026 (minimum wages from 1 July 2026)
• Fair Work Ombudsman, Horticulture compliance report (25 June 2025)
• Australian Taxation Office, Super guarantee annual employer compliance results (2024-25 results)
• Australian Taxation Office, Getting it right: compliance in the first year of Payday Super (PCG 2026/1) (1 July 2026 to 30 June 2027)
• Fair Work Ombudsman, Voluntary Small Business Wage Compliance Code (from 1 January 2025)
• Federal Register of Legislation, Fair Work Act 2009 (Cth) (current)
• Federal Register of Legislation, Crimes (Amount of a Penalty Unit) Instrument 2026 (penalty unit $364 from 1 July 2026)
• Baker McKenzie, Australia: Draft legislation takes hammer to non-competes (9 September 2026)

About the Author: Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with 20+ years experience in corporate, banking and trust law. Click for full bio of Vanessa Emilio or follow on LinkedIn.

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