Benefits of Australia

Mandatory employee benefits in Australia include retirement or ‘superannuation,’ and PTO including holiday pay, long service leave, maternity/paternity leave, and sick pay. Supplementary employee benefits include education advancement, voluntary benefits, health insurance and flexible working arrangements.

Mandatory Employee Benefits in Australia

Superannuation/pension

This is a mandatory benefit in Australia subject to legislative requirements. Employers must follow the ‘Choice of Fund’ legislation to allow an employee to select their own, preferred pension plan or auto enroll eligible employees into a complying Group Superannuation scheme.

The legislated minimum is currently 9.5% up to a maximum quarterly salary of $55,270 (i.e., contribution of $5,250.65 per quarter p.a.). Employees can then elect to salary sacrifice pre-tax dollars into the fund (up to yearly limits).

The numbers shown above are minimum requirements. Most employers base their contribution strategy on industry norms and benchmarking data, which can vary from sector to sector.

When designing your Australian superannuation scheme, great care needs to be taken in three areas:

• Contributions — how do they benchmark in your sector?
• Supplier — selecting the best supplier based on service and costs is important. This will largely depend on member numbers.
• Insurance included — default employer plans have a basic minimum of life and disability lump sum cover, but larger employers typically look towards higher levels of cover. This provides the benefit of scale such as auto cover and cheaper premiums.

Paid Time Off

• Holiday Pay – All full- and part-time employees are legally entitled to 20 paid holidays per year. This does not apply to casual employees however who are more typically paid by the hour or on flexible work contracts. This is in addition to the public holidays. It is now more and more common for employers to allow staff to ‘buy’ or ‘salary sacrifice’ extra days.
• Long Service Leave – Reasonable and unique to Australia, there is a legislated 8.67 weeks of paid leave in addition to the annual leave payable on the completion of 10 years’ service. This entitlement starts to accrue from five years and many businesses will have this registered as a ‘liability’ in their balance sheet.
• Maternity / Paternity Pay – Although there are no legislated paid parental leave requirements for the employer, today companies offer paid parental leave. There is, however, a government parental leave payment (for those eligible), which can be paid through the employer. Full rules can be found at: gov.au
• Sick Pay – There are no official Statutory Sick Pay benefits — however, most employers voluntarily offer between five and ten days per year. This is sometimes inclusive or exclusive of the typical bereavement leave (commonly up to five days).