Australia — Full Gross-to-Net Payroll (PAYG Withholding, Superannuation Guarantee, State Payroll Tax)
Complete Australian payroll entry under the ATO's PAYG Withholding system — recording gross wages, PAYG tax withholding, Superannuation Guarantee contributions (11.5% in 2024/25), Medicare Levy, and state/territory payroll tax where applicable.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Salaries & Wages Expense — Gross Pay (All Australian Employees) | Expense (+) | 3,500,000.00 | - |
| Superannuation Guarantee Contribution Expense (11.5% of OTE — Ordinary Time Earnings — 2024/25) | Expense (+) | 402,500.00 | - |
| State Payroll Tax Expense (Rate Varies by State; e.g., NSW 5.45% above $1.2M threshold) | Expense (+) | 175,000.00 | - |
| Workers' Compensation Insurance Premium Expense (State-Based — WorkCover / icare / WorkSafe) | Expense (+) | 52,500.00 | - |
| Cash — Net Pay Disbursed (ABA File / EFT to Employee Accounts) | Asset (−) | - | 2,397,500.00 |
| PAYG Withholding Payable — ATO (Weekly/Monthly/Quarterly Depending on Withholder Category) | Liability (+) | - | 875,000.00 |
| Medicare Levy Withheld Payable — ATO (2% of Taxable Income — Included in PAYG Withholding Tables) | Liability (+) | - | 52,500.00 |
| Superannuation Payable — Complying Super Fund / SMSF (Due by 28th of Month after Quarter End) | Liability (+) | - | 402,500.00 |
| State Payroll Tax Payable (Monthly by 7th of Following Month in Most States) | Liability (+) | - | 175,000.00 |
| Workers' Compensation Premium Payable — State Authority | Liability (+) | - | 52,500.00 |
💡 Accountant's Note
Australian payroll combines federal (ATO) and state obligations. PAYG WITHHOLDING: Employers withhold tax from employee wages using ATO tax tables (NAT 1008 — updated annually). Individual income tax rates 2024/25: 0% on $0–$18,200; 16% on $18,201–$45,000 (reduced from 19% by Stage 3 tax cuts — note Stage 3 cuts restored 19% from 2024/25); 32.5% on $45,001–$135,000; 37% on $135,001–$190,000; 45% on above $190,000. Low Income Tax Offset (LITO up to $700) and Low and Middle Income Tax Offset (LMITO was abolished from 2022/23). MEDICARE LEVY: 2% of taxable income — already built into ATO PAYG withholding tables. Medicare Levy Surcharge (1–1.5% extra) applies to high-income earners without private hospital cover — employees with MLS exposure should adjust withholding via PAYG variation. SUPERANNUATION GUARANTEE (SG): 11.5% in 2024/25 (increasing to 12% from 1 July 2025). Paid on Ordinary Time Earnings (OTE) — regular wages, shift loadings, paid leave — NOT overtime. Paid to the employee's nominated complying super fund or the ATO Superannuation Holding Accounts Reserve (SHAR) for employees who don't provide fund details. Payment deadline: 28 days after each quarter end (28 Jan, 28 Apr, 28 Jul, 28 Oct). Late SG triggers the Superannuation Guarantee Charge (SGC) — the ATO assesses employer on the shortfall plus 10% interest plus administration fee, and SGC is NOT tax-deductible. Single Touch Payroll (STP) Phase 2: real-time reporting of payroll events to ATO with each pay run. STATE PAYROLL TAX: Each state/territory imposes payroll tax at varying rates and thresholds: NSW (5.45% above $1.2M monthly threshold), VIC (4.85% above $900K monthly), QLD (4.75% above $1.3M), WA (5.5% above $1.083M), SA (4.95% above $1.5M), ACT (6.85% above $2M annually).
Practitioner & Systems Framework
💻 ERP Architecture
Australian payroll platforms: MYOB, Xero Payroll, KeyPay, Employment Hero, ADP Australia, Elmo. All must be STP Phase 2 compliant — each pay event is reported to ATO in real time. Super fund choice: employees nominate their preferred super fund (MySuper product if no choice made). SuperStream: all super contributions must be paid electronically via SuperStream (using USI — Unique Superannuation Identifier — and ABN). Payroll tax registration required in each state where payroll exceeds the state-specific threshold. Group employer provisions allow related entities to share the payroll tax threshold.
⚠️ Audit Flags
(1) Super Guarantee rate — the SG rate increases on 1 July each year; systems must be updated. (2) OTE definition — super is not payable on overtime; payroll systems must classify payment types correctly. (3) Super payment timeliness — the SGC penalty for late payment is substantial; confirm payment reaches the fund by the due date. (4) State payroll tax registration — multi-state employers may be unregistered in states where they breach the threshold. (5) STP reporting accuracy — ATO cross-matches STP data to income tax returns; discrepancies trigger review.
📄 Required Documentation
STP Phase 2 pay event reports (ATO portal), super payment receipts per quarter, PAYG Payment Summary Annual Report (replaced by STP — annual finalisation declaration), state payroll tax returns, workers' compensation policy per state, employee TFN declarations, super fund choice forms (or ATO stapled fund details), and SG charge worksheets (if any late payments occurred).
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