When you have to hire and manage a team in Australia, the most significant aspect of it is staying compliant with the payroll regulations. For this, you need to stay updated with the latest payroll compliance updates in Australia.
Previously, we discussed payroll tax in Australia, superannuation compliance, and explored the key dates and deadlines in the Australian payroll calendar. Today, we will focus on the payroll compliance updates you need to stay on top of in 2025.
With time, the updates roll out as the market demands change. This year, in 2025, starting from July 1, several updates came for employment policies affecting payroll, benefits, and tax obligations.
Whether you are a small business working with global employees or a private organisation hiring teams, these updates are important for you.
But what is new? Let’s learn about it.
What’s New: Latest Payroll Laws in Australia 2025
Compliance is not just about one country. But since the workplace is no longer just the office and it’s a whole world, implementing regulations for payroll is overwhelming. This experience is challenging for both employers and employees.
Before you implement HR and Payroll solutions in Australia, make sure the system is compliant with the latest updates. The Payroll Legislation Updates Australia 2025 you must know are:
1. Wage Theft Is Now a Criminal Offence
Deliberately underpaying wages, super, allowances, or entitlements will be illegal as of January 1, 2025.
Penalties are also harsh. Companies could be fined up to $7.8 million, while individuals could be fined up to $1.65 million and imprisoned for up to 10 years.
Criminal investigations could be triggered even by repeated “honest mistakes.”
2. Superannuation Guarantee Hits 12%
The phased plan is completed on July 1, 2025, when the Superannuation Guarantee (SG) increases from 11.5% to 12%.
Employers are responsible for making sure the new rate is accurately reflected in employment contracts and payroll systems.
3. National Minimum Wage Increased
With effect from July 1, 2025, the National Minimum Wage will also rise by 3.5% to $24.95 per hour, or $948 per week.
4. Paid Parental Leave & Super Boost
Superannuation will be paid on government-funded parental leave pay as of July 1, 2025.
5. Right to Disconnect for Small Businesses
Small businesses will be covered by the “right to disconnect” clause as of August 26, 2025.
6. Casual Conversion Deadline Passed
Eligible casuals were able to apply for permanent status after the mandatory “casual conversion” transition period ended on February 26, 2025.
7. Payroll Tax Return Requirements Extended
Payroll tax returns often contain mistakes like:
- Failing to include Employee Share Plans
- Misallocating Fringe Benefits
- Neglecting director compensation
- Incorrectly categorising pertinent contractors.
Interestingly, payroll tax deductions are eliminated for employers in Victoria with taxable wages exceeding $5 million.
8. Student Loans & Termination Payments Updated
The $67,000 student loan repayment threshold is reached; above this amount, higher rates are applicable.
Employment Termination Payment (ETP) caps are rising, with redundancy and retirement plan limits as well as a life benefits cap of up to $260,000.
9. Pay Transparency Laws - Still a Compliance Must
Employers must continue to enforce pay transparency in 2025, even though it is not new: there should be no pay secrecy clauses, and employees should be free to discuss their salaries.
10. Heightened Risk & Audit-Ready Culture
Regulatory agencies and unions are increasingly auditing wage records, and employers may be held accountable for inadequate record-keeping.
Maintain thorough, easily accessible records for seven years as a best practice.
Recap: Momentum of Payroll Compliance Updates
As you get the best payroll software for small businesses in Australia, stay updated about the new changes. Here is a short summary of Australia payroll compliance changes 2025. You must consider the following updates:
Key Change | Effective Date | Impact |
Wage Theft Criminalisation | 1 Jan 2025 | Heavy fines/jail for deliberate underpayment |
SG Rate Increase to 12% | 1 Jul 2025 | Higher super contributions |
Minimum Wage Lift | 1 Jul 2025 | Wage expense increase |
Paid Parental Leave Super | 1 Jul 2025 | New super payments on leave |
Right to Disconnect | 26 Aug 2025 | New workplace contact rules |
Casual Conversion Window Close | 26 Feb 2025 | Mandatory transition processes |
Payroll Tax Updates | FY2025 | Higher risk of tax liability |
Student Loans & ETP Caps | FY2025–26 | Adjust deductions and entitlements |
Pay Transparency Laws | Ongoing | Confirmed employer obligations |
Practical Steps To Stay Compliant
In light of the upcoming wave of Payroll Compliance Updates Australia 2025, Australia is focusing on updates, resilience, strategic investment, and moral leadership rather than merely checking boxes.
You can confidently and clearly traverse the changing payroll compliance landscape by integrating strong systems, utilising intelligent HR-payroll technology, and informing your employees.
What are the best practices, then? Here are some examples:
- Keep up with any changes to the law.
- Examine the super settings and employee tax.
- Get ready to report for STP Phase 2.
- Payroll systems should be updated to reflect the Fair Work Act.
- Conduct an audit of compliance.
- Inform staff members of any changes.
Conclusion
Payroll compliance in Australia for 2025 is more complex than ever, with stricter laws, higher contributions, and increased audit risks.
Businesses must adopt robust systems that ensure accuracy and accountability across every payroll process. Partnering with a payroll implementation specialist can make the difference between costly penalties and smooth operations.
At DHRP, we help organisations integrate Dynamics 365 HR & Payroll to stay compliant, reduce risks, and improve efficiency. With expert guidance and advanced payroll technology, your business can remain audit-ready, compliant, and focused on growth in the evolving Australian payroll environment.
FAQs
The 2025 payroll compliance updates in Australia include revised superannuation contribution rates, tax thresholds, leave entitlements, and reporting obligations. These updates, effective from July 1, ensure payroll systems align with evolving workplace policies, employee benefits, and statutory compliance requirements.
Payroll compliance updates in Australia 2025 directly affect businesses by altering payroll calculations, employee benefits management, and tax obligations. Employers must update payroll systems to remain compliant, avoid penalties, ensure accurate wage distribution, and maintain trust with employees and regulatory authorities.
Official payroll compliance updates in Australia 2025 are available on government portals like the Australian Taxation Office (ATO) and Fair Work Ombudsman. Businesses can also refer to professional associations, payroll service providers, or accounting firms offering compliance advisory services.
