National Employment Standards


The National Employment Standards (NES) are 10 minimum employment entitlements that have to be provided to all employees.

The 10 NES entitlements are:

  • maximum weekly hours
  • requests for flexible working arrangements
  • parental leave and related entitlements
  • annual leave
  • personal/carer's leave, compassionate leave and unpaid family and domestic violence leave
  • community service leave
  • long service leave
  • public holidays
  • notice of termination and redundancy pay
  • provision of Fair Work Information Statement

Do you live and work in WA?

Most WA sole traders and partnerships fall under the WA industrial relations system. If you're in the WA system, national awards and most of the NES don't apply to you.

You should refer to WA pay rates and WA hours of work, overtime and penalty rates.

Salaries and wages


As an employer, you must pay your employees at the correct rate, as well as any entitlements they are eligible for.

The wages and entitlements your employee is eligible for can depend on:

  • age
  • industry
  • qualifications
  • work duties and responsibilities

Minimum Wage

The national minimum wage is $740.80 per week, for a 38 hour week, or $19.49 per hour.

The national minimum wage provides a starting point to calculate your employees’ wages, however most employees are covered by an award. Awards set minimum wages for employees based on the type of work they’re doing and the industry they’re in. Some employees may receive a decreased hourly rate if they are:

Employees who have reduced capacity for work due to disability may also receive a percentage of a full wage. Go to the Fair Work Ombudsman website to learn more about employees with disability pay rates.

How to work out pay for your employees

Use the Fair Work Ombudsman (FWO) Pay Calculator to help you work out what you need to pay your employees.

Awards

Modern awards are industry or occupation based minimum employment standards which apply in addition to the NES. Look up the award(s) relevant to your business on the Fair Work Ombudsman website.

Enterprise Agreements

Enterprise agreements set out conditions of employment for a group of employees at one or more workplaces. You can draft your own enterprise agreement so that it reflects your particular business. You also must have two or more employees to create an enterprise agreement.

Most enterprise agreements result in better work conditions for employees than the modern award. If you use an enterprise agreement, it will apply instead of a modern award. The pay rate in an enterprise agreement can't be less than the pay rate in the relevant modern award.

Learn more about enterprise agreements on the Fair Work Commission website.

Tax and superannuation


When you hire employees, you must comply with tax and superannuation obligations.

PAYG withholding

When you pay employees, you’re required to withhold tax from their pay. You will need to register before you withhold an amount from a payment made to an employee. Once you have collected the pay as you go (PAYG) withholding send the withheld amounts to the ATO.

Payroll Tax

Payroll tax is a state tax on the wages paid by employers. It’s calculated on the amount of wages you pay per month. You must pay payroll tax if your total Australian wages exceed the exemption threshold that applies in your state or territory.

Fringe Benefits Tax

Fringe Benefits Tax (FBT) is a tax that employers pay when they provide certain benefits to their employees, including their employees’ family or other associates. The benefit may be in addition to, or part of, their salary or wage package. If you provide employees fringe benefits, you will need to:

Superannuation

Alongside your tax obligations, generally you will need to make superannuation contributions to your employees’ chosen superannuation fund when you pay them $450 or more before tax in a calendar month. Understand your superannuation obligations.

Reporting with Single Touch Payroll

Single Touch Payroll is a new way of reporting tax and superannuation information to the ATO each time you pay your employees. The information you need to report includes:

  • employees' salaries and wages
  • allowances
  • deductions (for example, workplace giving)
  • PAYG withholding
  • superannuation

Leave


Annual leave

Annual leave also known as holiday pay, allows an employee to be paid while taking time off work. Full-time and part-time workers get 4 weeks of annual leave for every 12 months worked. Leave begins accumulating from the first day the employee works and they can take leave as soon as they accumulate it.

How annual leave works

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Annual leave (also known as holiday pay) allows an employee to be paid while having time off from work.

The entitlement to annual leave comes from the National Employment Standards (NES).

Awards, enterprise agreements and other registered agreements can't offer less than the NES but they can give more annual leave.

Who is entitled to annual leave?

All employees (except for casual employees) get paid annual leave.

How much annual leave does an employee get?

Full-time and part-time employees get 4 weeks of annual leave, based on their ordinary hours of work.

Parental leave

Eligible employees can get unpaid parental leave when they have a child or adopt a child. Consider how you work with new parents to ensure that your business can maintain its operations during this time.

Parental leave - overview

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What is parental leave?

Parental leave is leave that can be taken when:
•an employee gives birth
•an employee's spouse or de facto partner gives birth
•an employee adopts a child under 16 years of age.

Employees are entitled to 12 months of unpaid parental leave. They can also request an additional 12 months of leave.

Sick and carer’s leave

Full-time and part-time employees can take paid sick or carer’s leave. Sick and carer's leave (also known as personal leave) allows an employee take time off to help them deal with:

  • personal illness or injury
  • caring responsibilities
  • family emergencies

It’s important to know:

  • Full-time and part-time employees get 10 days each year of paid sick or carer’s leave.
  • Casual employees or contractors do not get any paid sick or carer’s leave, but can access unpaid carer’s leave.
  • As an employer, you can ask an employee to give evidence to confirm why they have been away from work at any time. However, you might have a specific policy about when it is required. An employee’s medical certificate doesn't have to give exact details about the injury or illness.
  • An employee can take an extended period of unpaid sick leave. The Fair Work Ombudsman has more information on long periods of sick leave and unpaid carer's leave.

Religious and cultural holidays

Religious and cultural holidays are days that people celebrate for religious and cultural reasons. You can use the calendar of cultural and religious days to help you identify the holidays your employees may celebrate.

If you don’t allow your employees to celebrate religious or cultural holidays, it can be discrimination. Make sure you allow your employees flexibility to celebrate these days – or celebrate them together through work events.

Allowances


Allowances provide employees with additional funds or products to ensure they can complete their job to the best of their abilities. If you fall under a modern award or an enterprise agreement, these documents will detail what allowances you’re required to pay.

Uniform allowances to employees

If you expressly require your employees to have a uniform to work with you, that is sufficiently distinctive to your organisation, often you provide your staff with a:

  • uniform allowance to purchase the uniform
  • uniform free of charge

If your business has a uniform that you don’t require your employees to wear, you may offer certain incentives for your employees to wear your business uniform, such as a discount to purchase the uniform. If you do provide payments, reimbursements or offer discounts for non-compulsory uniforms to your employees, be aware that it may incur fringe benefits tax.

Legal obligations work-related items

You can’t make employees purchase work-related items from their wages. If you employ your staff under a modern award, each award has specific information on work related expenses.

Travel allowances to employees

A travel allowance is a payment to an employee to cover accommodation, food, drink or incidental expenses while they travel away from home or the office for work.

Awards and enterprise agreements often contain information regarding an employer’s obligations for travel requirements. However, you don’t have to employ your staff under an award or enterprise agreement to provide them with a travel allowance.

Tax and reporting obligations of travel allowances

Make sure you comply with your tax and reporting obligations. The ATO can help you identify what payments to record, report or pay tax on. It is your responsibility as an employer to do this for your employee.