Payroll Services in Melbourne

What Does an Outsourced Payroll Service Include?

An outsourced payroll service processes your payroll from submission of timesheet or hours data through to employee payment and all statutory reporting. This includes calculating gross pay, PAYG withholding, and net pay for each employee; processing the pay run in your payroll software; submitting the STP Phase 2 report to the ATO; generating payslips; processing superannuation contributions to each employee's nominated fund; and providing payroll summaries for your accounts. Year-end obligations — payment summaries, finalisation through STP, and payroll tax annual reconciliations — are included.

What Is Single Touch Payroll Phase 2 and What Does It Require?

Single Touch Payroll Phase 2 (STP2) is the ATO's expanded real-time payroll reporting framework, mandatory for all employers since 1 January 2022 (with some extensions). STP2 requires employers to report disaggregated data per pay run — separating gross pay into income types (salary and wages, closely held payee amounts, foreign employment income), reporting tax treatment codes for each employee, and reporting child support garnishees and deductions directly to the ATO. This additional granularity enables the ATO to pre-fill tax returns, identify underpayment of super, and cross-match payroll data against BAS PAYG withholding figures in real time.

What Is the Superannuation Guarantee Rate and When Is Super Due?

The superannuation guarantee (SG) rate is 12% of ordinary time earnings for the 2025–26 financial year. Super must be paid to each employee's fund by the 28th day after the end of each quarter — 28 October, 28 January, 28 April, and 28 July. Failure to pay on time triggers the Superannuation Guarantee Charge (SGC), which applies to the full salary base (not just ordinary time earnings), is not tax-deductible, and attracts a 10% per annum interest component plus an administration fee. The SGC is materially more expensive than the underlying super obligation.

Does My Melbourne Business Need to Pay Payroll Tax?

Victorian businesses with total Australian wages (including wages paid by related entities) above $900,000 per year are liable for payroll tax. The Victorian payroll tax rate is 4.85% on wages above the threshold (reduced rate of 1.2125% for regional employers). Payroll tax is a state tax, not a federal one, and applies to all wages and most contractor payments where the contractor is an employee for payroll tax purposes. Many Melbourne businesses with contractors — IT, professional services, construction — are unaware that contractor payments can be deemed wages for payroll tax purposes under the relevant provisions of the Payroll Tax Act 2007 (Vic).

What Are the Risks of Getting Payroll Wrong in Melbourne?

Payroll errors expose Melbourne employers to several categories of risk simultaneously. PAYG withholding underpayments attract a 75% administrative penalty (for recklessness) or 25% (for lack of reasonable care) on the unpaid amount, plus general interest charge. Super guarantee shortfalls trigger the SGC as described above. Award and enterprise agreement underpayments attract Fair Work penalties of up to $18,780 per contravention for individuals and $93,900 per contravention for corporations (2024–25 penalty units). Wage theft is a criminal offence in Victoria under the Wage Theft Act 2020, with penalties of up to 10 years imprisonment for dishonest withholding of entitlements.