How to Create an Australian Payslip: Complete 2026 Guide

What Is a Payslip?

A payslip is a document provided to an employee each time they are paid. It details the employee's gross earnings, all deductions (including PAYG withholding and superannuation), and the resulting net pay for a given pay period. In Australia, payslips are a legal requirement under the Fair Work Act 2009 — not just a nice-to-have.

Unlike some countries where pay documentation is optional or loosely regulated, Australia takes payslip compliance seriously. The Fair Work Ombudsman can impose significant penalties on employers who fail to provide accurate, timely payslips.

Why Payslips Matter in Australia

Every employer in Australia — whether you run a bustling cafe in Melbourne, a construction firm in Perth, or a tech startup in Sydney — must provide a payslip to each employee within one business day of paying them. This applies to full-time, part-time, and casual employees alike.

Payslips serve multiple purposes:

• Legal compliance with the Fair Work Act
• Transparency for employees to verify correct payment
• Record keeping for tax returns and ATO reporting
• Record keeping for employee queries, accounting, and tax administration
• Dispute resolution if questions arise about pay

What Must Be Included on an Australian Payslip?

Under the Fair Work Regulations 2009, a compliant payslip must include the following information:

Employer Details

• Employer's full legal name
• Australian Business Number (ABN)

Employee Details

• Employee's full name
• Classification or role under the applicable Modern Award or enterprise agreement

Pay Period Information

• Pay period (e.g., fortnightly from 1 Feb to 14 Feb 2026)
• Date of payment
• Pay frequency (weekly, fortnightly, or monthly)

Earnings Breakdown

• Gross pay amount
• Hourly rate of pay or annual salary
• Number of hours worked (for hourly workers)
• Overtime hours and rates
• Casual loading (25% for casual employees)
• Penalty rates (e.g., weekend, public holiday, late-night shifts)
• Allowances (travel, uniform, tool, meal allowances)
• Bonuses, commissions, or incentive payments
• Leave loading (17.5% loading on annual leave for many Awards)

Deductions

• PAYG withholding (income tax withheld on behalf of the ATO)
• HECS-HELP repayments (if the employee has a study loan and earns above the threshold)
• Salary sacrifice amounts (e.g., additional super contributions, novated lease)
• Union fees (if authorised by the employee)
• Any other agreed deductions

Superannuation

• Employer super contribution amount (12% of ordinary time earnings)
• Name of the super fund
• Any additional voluntary employee contributions

Net Pay

• The final amount transferred to the employee's bank account

Year-to-Date (YTD) Totals

• Running totals for the financial year (1 July to 30 June) for gross pay, PAYG withheld, and super

Step-by-Step: Creating a Payslip in Australia

Step 1: Gather Employee Information

Before creating a payslip, ensure you have:

• Employee's full legal name
• Tax File Number (TFN) declaration form completed
• Super fund details (or use the employee's stapled super fund via ATO)
• Employment type: full-time, part-time, or casual
• Applicable Modern Award or enterprise agreement
• Pay rate and hours arrangement

Step 2: Calculate Gross Earnings

Add up all earnings for the pay period:

• Base pay: Hours worked x hourly rate, or pro-rata of annual salary
• Overtime: Hours x overtime rate (typically 1.5x for first 2 hours, 2x thereafter)
• Penalty rates: Weekend rates (Saturday 1.25-1.5x, Sunday 1.5-2x), public holiday rates (2-2.5x)
• Casual loading: 25% on top of the base rate for casual employees
• Allowances: Travel, uniform, tool, or meal allowances as applicable
• Bonuses/commissions: Any additional earnings for the period

Step 3: Calculate PAYG Withholding

Use the ATO's current tax tables for the 2025-26 financial year:

• $0 – $18,200: No tax (tax-free threshold)
• $18,201 – $45,000: 16c for each $1 over $18,200
• $45,001 – $135,000: $4,288 plus 30c for each $1 over $45,000
• $135,001 – $190,000: $31,288 plus 37c for each $1 over $135,000
• $190,001+: $51,638 plus 45c for each $1 over $190,000

Add the Medicare levy (2% of taxable income) to get the total PAYG amount. If the employee has a HECS-HELP debt, additional withholding applies based on income thresholds.

Important: If the employee has not provided a TFN, you must withhold at the top marginal rate of 47% (including Medicare levy).

Step 4: Calculate Superannuation

• Super guarantee rate: 12% of ordinary time earnings (OTE)
• OTE includes: base salary, shift loadings, allowances that are part of ordinary hours, bonuses and commissions (in most cases)
• OTE excludes: overtime payments, reimbursements
• Maximum super contribution base: $65,070 per quarter (2025-26)
• Super must be paid at least quarterly (by the 28th of the month following the quarter end)

Coming in 2026: From 1 July 2026, employers will be required to pay super on the same day as wages ("payday super").

Step 5: Apply Other Deductions

• Salary sacrifice arrangements
• HECS-HELP repayments (if applicable)
• Union fees
• Any court-ordered deductions (e.g., child support)

Step 6: Calculate Net Pay

Net pay = Gross earnings - PAYG withholding - Employee super contributions (if any) - Other deductions

Note: Employer super contributions are NOT deducted from the employee's gross pay — they are an additional cost to the employer.

Step 7: Generate and Distribute

• Generate the payslip as a PDF or electronic record
• Provide to the employee within 1 business day of payment
• Keep records for 7 years (Fair Work requirement)

Using PayslipMate to Create Payslips

PayslipMate makes this entire process simple:

1. Enter your business details (name, ABN)
2. Add employee information (name, TFN status, employment type)
3. Input earnings (we handle casual loading and penalty rate calculations)
4. We calculate everything — PAYG, Medicare levy, super — all using current ATO rates
5. Download your professional PDF payslip instantly

Your first payslip is completely free. No credit card required.

Common Mistakes to Avoid

1. Not including the ABN — Every payslip must show the employer's ABN
2. Forgetting casual loading — Casual employees must receive 25% loading
3. Calculating super on net pay — Super is calculated on gross ordinary time earnings
4. Late payslips — Must be provided within 1 business day of payment
5. Missing overtime breakdown — Hours and rates must be itemised
6. Not keeping records — Payslip records must be kept for 7 years
7. Incorrect PAYG rates — Always use the current financial year's tax tables

Conclusion

Creating compliant Australian payslips does not have to be complicated. By understanding the Fair Work requirements and using the correct ATO tax rates, you can ensure your employees receive accurate, professional payslips every pay period. PayslipMate handles all the calculations automatically, so you can focus on running your business.

Create your first free payslip now →