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Medicare is a universal health program that provides basic medical and hospital care free of charge available to Australian residents. Medicare is funded by most resident taxpayers, who are subject to a 2% levy of their taxable income to support this scheme.
High-earners not covered by health insurance for private patient hospitals have an additional surcharge of up to 1.5%. Therefore, it is important that employers and foreign nationals working in Australia carefully choose a health fund which provides good coverage but also qualifies them for the exemption from the Medicare levy surcharge. Some policies offer full coverage but do not exempt the policyholder and their family members from the surcharge.
Superannuation is a government arrangement to encourage people to accumulate funds to provide them with an income stream when they retire. A company is required to have a default superannuation fund that is "My Super" (low cost) fund. Such a fund needs to comply with a regulated set of features, including:
From the start of 2024, the right to superannuation contributions has become one of the National Employment Standards. This means that unpaid or underpaid superannuation will be enforceable by the Fair Work Act 2009 (Cth) and action could be taken for breaches by employees, unions or the Fair Work Ombudsman. The Australian Tax Office will continue to be the regulator enforcing employer compliance under existing superannuation legislation.
The selected fund may require the employer to register if it is an employer-based superannuation fund. However, the existing trend is for employees to individually sign up as a member of funds rather than employers to have to register. The current rate of Superannuation contribution (as of July 2024) is 11.5% payable by the employer, and employees are encouraged to supplement the superannuation contributions with voluntary contributions.
Employees have a right to choose their superannuation fund and have hundreds of options. They can also use their self-managed superannuation fund. The only requirement is that the Australian Government records them as complying superannuation funds and listed in the Super Fund Lookup.
Employers must cover employees with workers' compensation insurance to protect workers if they suffer a work-related injury or disease. Coverage must be purchased for every state and territory where the employer has workers. Premiums are usually a percentage of the employee's pay and are based on factors such as industry, claim history, and remuneration.
Under the FW Act, eligible employees who have worked for their employer for at least 12 months have a legal right to request flexible work arrangements. Employers can only refuse a request on reasonable business grounds.
Both Full-time and part-time employees are extended ten days of personal sickness and carer's leave for each year of employment, although employers may voluntarily offer more time. Employees may also be eligible for compassionate & bereavement leave and unpaid family and domestic violence leave. An employer does not pay out these forms of leave on termination of an employee's employment.
Most common non-mandatory benefits in Australia.
The most common non-mandatory benefit in Australia is a Life and Disability insurance. Premiums are usually between 0.5% and 0.8% of the salary and vary according to age, occupation, location and company size.
In the tech industry, the benefit is usually three times the employee's basic salary.
A long term disability insurance is often provided to selected professions and higher-grade employees. It's typically based on 75% of the salary plus 10% of the superannuation benefit and the premium costs are usually between 0.8% and 1.2% of payroll. A good benefit consists of 75% of salary plus Super benefit with a 30, 60 or 90-day wait and a 5-year benefit period.
Most larger Australian companies provide access to an EAP to employees. The programmes can either be bought on a stand-alone basis or supplied on a 'pay as you use' arrangement. Higher quality policies include face-to-face counselling as well as a telephone helpline. Costs are typically less than $50 per employee per year.
An increasing number of large, professional services companies are looking to offer childcare placements and or daycare facilities.
Tech companies usually offer 5-10 additional days off above the statutory minimum while other employers allow staff to buy extra days off.
Some employers offer Australian work visa sponsorship, and a relocation expenses allowance to attract international talent.
Most tech companies give employees flexible work hours to better control their time and obligations between work and private life.
Although not very common, big tech companies usually cover employee's and their dependents' private healthcare and dental insurance.
Some tech companies offer fitness membership allowances to employees.
Many employers offer a top-up of the government-funded parental leave.
Some companies offer employees commuter benefits.
Most tech companies give employees state-of-the-art technology when they join the company.
Some of the more prominent tech companies give employees an individual learning & development budget.
Share-save plans are standard with employers who want to encourage staff participation in the company's shared ownership.
Annual bonuses ranging from 6%-10% are a standard benefit in Australia, and some high-level executives may receive up to half of their salary as an incentive bonus.
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