How do I install the Australia Payroll skill?

Run npx skillmds@latest add openaccountants/australia-payroll in your terminal (requires Node.js), paste this page's agent-chat prompt into Claude, Cursor, or any MCP-connected agent, or download the SKILL.md file and copy it into your agent's skills directory.

What does the Australia Payroll skill do?

> Use this skill whenever asked about Australian payroll, PAYG withholding, superannuation guarantee, Single Touch Payroll, or employer obligations in Australia. Trigger on phrases like "PAYG", "pay as you go withholding", "superannuation", "super guarantee", "STP", "Single Touch Payroll", "STP Phase 2", "Medicare levy", "tax file number", "TFN declaration", "HECS-HELP", "STSL", "Fair Work", "NES", "national employment standards", "modern award", "payslip Australia", "ATO payroll", "BAS", "IAS", "activity statement", "annual leave", "long service leave", "minimum wage Australia", or any question about running payroll in Australia. ALWAYS read this skill before processing any Australian payroll work. It is listed under AI & ML on SkillMD.

Is Australia Payroll safe to use?

This skill has not completed SkillMD's automated safety review yet. SkillMD never runs a skill's scripts for you; review the SKILL.md before installing.

Which AI agents work with Australia Payroll?

This skill is tagged as working with Claude Code, Claude.ai, OpenAI Codex. SKILL.md is an open format, so most agents that read a skills directory can load it too.

Is Australia Payroll free to use?

Yes. Installing skills from SkillMD is free. This skill is licensed under AGPL-3.

Who published Australia Payroll?

openaccountants (@openaccountants) published this skill. Their other Agent Skills are listed on their SkillMD profile.

Australia Payroll by openaccountants

Name: Australia Payroll
Author: openaccountants

Australia -- Payroll Skill v1.0

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Section 1 -- Quick Reference

Field	Value
Country	Australia (Commonwealth of Australia)
Currency	AUD ($) only
Tax year (income year)	1 July -- 30 June
Primary legislation	Income Tax Assessment Act 1997; Superannuation Guarantee (Administration) Act 1992; Fair Work Act 2009
Tax authority	Australian Taxation Office (ATO)
Workplace regulator	Fair Work Ombudsman (FWO)
Reporting system	Single Touch Payroll (STP) Phase 2
Pay frequency	Weekly, fortnightly, monthly (fortnightly most common)
Employer registration	ABN + PAYG withholding registration via ATO
Validated by	Pending -- requires sign-off by an Australian CPA, CA, or registered tax agent
Skill version	1.0

Section 2 -- Income Tax Withholding (PAYG)

PAYG withholding is calculated per pay period using ATO tax tables (Schedule 1 -- NAT 1004) or the Statement of Formulas. The employer applies the appropriate coefficients based on weekly/fortnightly/monthly earnings.

Resident Individual Tax Rates (2025--26)

Taxable Income (AUD)	Rate	Tax on This Income
0 -- 18,200	0%	Nil
18,201 -- 45,000	16%	16c for each $1 over $18,200
45,001 -- 135,000	30%	$4,288 plus 30c for each $1 over $45,000
135,001 -- 190,000	37%	$31,288 plus 37c for each $1 over $135,000
190,001+	45%	$51,638 plus 45c for each $1 over $190,000

These rates exclude the Medicare levy (2%).

Medicare Levy

Item	Detail
Standard rate	2% of taxable income
Low-income threshold (single)	No levy up to $28,011; reduced levy $28,012--$35,014
Low-income threshold (family)	No levy up to $47,238; reduced $47,239--$59,048
Medicare Levy Surcharge	1.0%--1.5% additional for high earners without private hospital cover

The Medicare levy is incorporated into PAYG withholding calculations via the tax tables.

Tax File Number (TFN) Declaration

Every new employee must complete a TFN declaration. If no TFN is provided, withhold at the top marginal rate (45% + Medicare levy = 47%) from the first dollar.

Study and Training Support Loans (STSL)

Formerly HECS-HELP. Compulsory repayments are withheld via PAYG based on Schedule 8 thresholds. Updated STSL repayment thresholds apply from 24 September 2025, reducing compulsory repayments for most borrowers.

Section 3 -- Social Security: Employee Deductions

Australia does not have a separate employee social security contribution. The Medicare levy (2%) serves a similar function but is collected through PAYG withholding, not as a separate line item.

Employee-Side Deductions Summary

Deduction	Rate	Ceiling	Notes
PAYG income tax	Progressive (see above)	No ceiling	Includes Medicare levy in tax tables
STSL repayment	1%--10% (income-based)	No ceiling	Only if employee has HELP/STSL debt
Salary sacrifice (super)	Voluntary	Concessional cap $30,000/year	Pre-tax; reduces PAYG withholding base

There is no employee-paid social insurance premium equivalent to NIC (UK) or social security tax (US).

Section 4 -- Social Security: Employer Contributions

Superannuation Guarantee (SG)

Parameter	2025--26 Value
SG rate	12% of ordinary time earnings (OTE)
Maximum contribution base	$65,070 per quarter ($260,280/year)
Minimum earnings threshold	Abolished (no $450/month threshold from 1 Jul 2022)
Payment frequency	Quarterly (28 days after quarter end)
Eligible employees	All employees 18+; under-18s working 30+ hours/week

SG quarterly due dates: 28 October, 28 January, 28 April, 28 July.

12% is the final scheduled SG rate (reached 1 July 2025). No further increases are planned.

Superannuation Guarantee Charge (SGC)

If SG is not paid in full by the quarterly deadline, the employer must lodge an SGC statement and pay:

The shortfall amount (calculated on total salary/wages, not just OTE)
Nominal interest (10% per annum)
An administration fee ($20 per employee per quarter)

SGC amounts are not tax-deductible.

Workers' Compensation Insurance

Mandatory in all states/territories. Premium rates vary by industry, state, and claims history. Typically 1%--5% of wages for office-based roles.

Payroll Tax (State/Territory)

State/Territory	Threshold (Annual)	Rate
NSW	$1,200,000	4.85%
VIC	$900,000	4.85%
QLD	$1,300,000	4.75%
WA	$1,000,000	5.50%
SA	$1,500,000	Varies (0%--4.95%)
TAS	$1,250,000	4.00%
ACT	$2,000,000	6.85%
NT	$1,500,000	5.50%

Payroll tax is a state/territory tax on total Australian wages above the threshold. Interstate employers must register in each jurisdiction where they have employees.

Section 5 -- Minimum Wage and Overtime

National Minimum Wage (from 1 July 2025)

Category	Rate
Adult (full-time, 38 hrs/week)	$24.95/hour ($948.10/week)
Junior rates	Percentage of adult rate by age (under awards)
Casual loading	25% on top of base rate (in lieu of leave entitlements)

Most employees are covered by a modern award, which sets higher minimum rates by classification level.

Overtime (Under Awards)

Period	Typical Award Rate
First 2 hours overtime (Mon--Sat)	150% (time and a half)
After 2 hours overtime	200% (double time)
Sunday work	200%
Public holiday work	250%

Exact rates depend on the applicable modern award or enterprise agreement. The Fair Work Act does not prescribe a single universal overtime rate.

Maximum Ordinary Hours

38 hours/week under the NES. Can be averaged over up to 26 weeks if permitted by the award or agreement.

Section 6 -- Mandatory Benefits

Annual Leave

4 weeks per year (pro-rata for part-time). Accrues progressively. Shift workers may receive 5 weeks. 17.5% annual leave loading is common under awards (paid on top of base rate when leave is taken).

Personal / Carer's Leave (Sick Leave)

10 days per year for full-time employees (pro-rata for part-time). Accumulates year to year with no cap. Paid at the base rate of pay.

Compassionate / Bereavement Leave

2 days per occasion (paid for permanent employees).

Long Service Leave

Governed by state/territory legislation. Typically 8.67 weeks after 10 years of continuous service. Some states allow pro-rata access after 5--7 years.

Parental Leave

Type	Duration	Payment
Government Paid Parental Leave	Up to 22 weeks (increasing to 26 weeks by Jul 2026)	National minimum wage rate
Unpaid parental leave	Up to 12 months (can request additional 12 months)	Nil (job-protected)

Public Holidays

8 national public holidays. Additional state/territory-specific holidays. Employees (except casuals) are entitled to be absent on public holidays without loss of pay.

Redundancy Pay (NES)

Years of Service	Weeks of Pay
1--2 years	4 weeks
2--3 years	6 weeks
3--4 years	7 weeks
4--5 years	8 weeks
5--6 years	10 weeks
6--7 years	11 weeks
7--8 years	13 weeks
8--9 years	14 weeks
9--10 years	16 weeks
10+ years	12 weeks

Small business employers (< 15 employees) are exempt from NES redundancy pay.

Section 7 -- Payslip Requirements

Payslips must be issued within 1 working day of payday (Fair Work Act s536, Fair Work Regulations r3.36).

Mandatory Payslip Contents

Employer's name and ABN
Employee's name
Pay period and payment date
Gross and net amounts paid
Hourly rate (or annual salary)
Hours worked (if hourly or pay varies)
All loadings, allowances, bonuses, incentive payments, penalty rates -- separately itemised
All deductions (PAYG withholding, salary sacrifice, union fees, etc.)
Superannuation contributions (employer and any salary sacrifice)
Name of superannuation fund

Leave Balances

Not strictly required on payslips but must be provided to employees on request. Best practice is to include annual leave and personal leave balances.

Section 8 -- Filing Obligations

Single Touch Payroll (STP) Phase 2

Item	Detail
Reporting frequency	Each pay event (each time employees are paid)
Method	STP-enabled payroll software submits to ATO
Content	Gross payments, PAYG withheld, super liability, employee details, income types, country codes
Finalisation deadline	14 July following end of financial year
Closely held payees	May report quarterly; finalise by 14 July

PAYG Withholding Remittance

Employer Size	Reporting	Payment Due
Small withholders (< $25,000 annual PAYG)	Quarterly BAS	28 days after quarter end
Medium withholders ($25,000--$1M)	Monthly IAS	21st of following month
Large withholders (> $1M)	Monthly IAS + may need to pay more frequently	21st of following month

Superannuation Remittance

Due Date	Quarter
28 October	July -- September
28 January	October -- December
28 April	January -- March
28 July	April -- June

Annual Obligations

Task	Deadline
STP finalisation	14 July
PAYG payment summary (now replaced by STP income statement)	Via STP -- no separate form required
Workers' comp annual declaration	Per state insurer schedule
Payroll tax annual reconciliation	Per state revenue office (typically July/August)

Penalties

Violation	Consequence
Late SG payment	SGC: shortfall + 10% interest + $20/employee admin fee; not deductible
Failure to withhold PAYG	Employer liable for amount that should have been withheld
Late BAS/IAS lodgement	General interest charge (GIC) + potential failure-to-lodge penalty
Payslip non-compliance	Up to $16,500 per contravention (individual); $82,500 (body corporate)

Section 9 -- Common Payroll Patterns

Pattern 1 -- Full-Time Monthly Employee

Annual salary $85,000. Paid monthly. No STSL debt.

Monthly gross: $85,000 ÷ 12 = $7,083.33
PAYG withholding: per Schedule 1 tax table coefficients (~$1,420/month incl. Medicare)
Super guarantee: $7,083.33 × 12% = $850.00 (employer cost, paid quarterly)
Net pay: $7,083.33 - $1,420.00 - deductions

Pattern 2 -- Casual Employee with Loading

Base rate $28.50/hour under award. Casual loading 25% = $35.63/hour. Works 25 hours.

Gross: 25 × $35.63 = $890.75
PAYG: per weekly tax table for $890.75
Super: $890.75 × 12% = $106.89 (employer cost)
No leave accrual (casual loading compensates)

Pattern 3 -- Employee with Salary Sacrifice to Super

Annual salary $120,000. Sacrifices $10,000/year to super.

Taxable salary: $110,000 (reduced PAYG base)
Employer SG: $120,000 × 12% = $14,400 (calculated on pre-sacrifice OTE)
Concessional super cap: $30,000 (includes SG $14,400 + sacrifice $10,000 = $24,400; within cap)
The $10,000 is taxed at 15% inside the super fund instead of the employee's marginal rate

Pattern 4 -- STSL Repayment

Employee earning $65,000 with HELP debt. STSL repayment rate from Schedule 8 tables: approximately 4.5%. Annual repayment: $65,000 × 4.5% = $2,925, withheld progressively via PAYG.

Section 10 -- Interaction with Other Skills

Skill	Interaction
payroll-workflow-base	Provides generic payroll processing steps; this skill adds Australian-specific rules
australia-bookkeeping	Payroll journals: salaries + super + payroll tax to P&L; PAYG liability + super liability + net pay to BS
australia-bas	PAYG withholding reported on BAS/IAS; GST does not apply to wages
australia-stp	STP Phase 2 reporting is the primary payroll compliance mechanism

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

Source: OpenAccountants — open tax Guides for AI, reviewed by named CPAs/CAs/EAs. Quality: source-cited draft. For always-current figures and named-accountant backing, connect the OpenAccountants MCP server (openaccountants-mcp).

Australia Payroll

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