Employee benefits: What businesses need to know
What are employee benefits?
Employee benefits are perks employers provide to their employees to entice them to work for their company. Employee benefits programs offer more than what the Australian government legislates for workers.
Why are employee benefits important?
The availability of employee benefits in Australia is becoming increasingly important in today’s job market, as all types of businesses are currently experiencing skills shortages. By offering benefits, employers can attract the best talent and create a work environment that adds value for employees.
According to a 2022 Global Benefits Attitudes Survey, employees not only value financial incentives but also health and wellness benefits to support their physical (23%) and emotional (27%) health. This is a shift in attitude, as many employees considered wellness a private matter before the COVID-19 pandemic made it a priority for many businesses.
Mandatory employee benefits and entitlements in Australia
The Fair Work Act 2009 governs leave entitlements in Australia. All employees are eligible for minimum leave entitlements, depending on their employment status.
Holidays and annual leave
Annual leave is an entitlement for employees who work full-time or part-time.
The minimum entitlement, based on ordinary work hours, is 4 weeks of paid vacation for each year of employment, according to the National Employment Standards (NES).
Public holidays vary depending on the territory or state your business operates in. Visit the Fair Work Ombudsman’s website for a list of holidays in your area.
Long service leave (LSL)
Employees who have worked with the same organisation for years are eligible for LSL.
States and territories set entitlement laws, so contact the LSL agency in your area to find out what they are.
Maternity or Parental leave is available to employees who:
adopt a child under the age of 16
will take responsibility for the care of a child
have a spouse or partner who gives birth.
Through Parental Leave Pay (PLP), employees can access up to 18 weeks of government-funded leave. Employees can also take up to 12 months of unpaid parental leave.
Sick and carer’s leave
Employees who can’t work because of a physical or mental illness affecting them or a member of their immediate family or household can take paid sick and carer’s leave.
Full-time workers can take 10 days of paid sick and carer’s leave each year, and part-time employees get a prorated amount depending on their hours worked.
Unpaid carer’s leave allows full-time and part-time employees to take time off to care for a household member or immediate family member who's sick, injured or facing an emergency. Employees can take unpaid leave if they don’t have any paid sick or carer’s leave left. They're entitled to two days of unpaid carer’s leave per occurrence.
The Australian Tax Office (ATO) requires all employers to make regular contributions to an employee’s superannuation (super) fund.
The minimum rate is currently 10.5% and will increase to 11% on 1 July 2023.
Workers’ compensation insurance
All employers must carry workers’ compensation insurance to cover employees in case of a workplace injury or illness.
Individual states and territories govern workers’ compensation, so contact your local regulator to learn more.
Which employee benefits are optional?
To help workers with child care expenses, employers may contribute financial support or even provide care on-site.
Some businesses provide a company car or stipend for workers who use their vehicle for business purposes.
The employer may be liable for fringe benefits tax (FBT) if the company vehicle is also available for the employee’s private use.
Education or personal development programs
Employers can invest in their employees by providing access to training programs that promote personal growth. This might involve:
Employee assistance program (EAP)
Many employers provide access to an employee assistance program (EAP) that supports employees dealing with work-related and personal problems. An EAP can provide:
office conflict intervention
substance abuse support.
Flexible work schedule
A 2021 survey conducted by the Australian Institute of Family Studies revealed that 67% of Australians work from home regularly — that number was about 42% before the COVID-19 pandemic.
have flexible start and finish times
work from home part-time
After working for a company for at least a year, non-casual employees can request modifications to their work schedule if they:
are age 55 or older
are a carer as defined by the Carer Recognition Act 2010
are a parent — or responsible for the care — of a child who’s school-aged or younger
are experiencing domestic/family violence or providing care to a household or family member who is
have a disability.
Gym or health club membership
By offering health club or gym memberships, businesses can support active lifestyles, which can increase morale, productivity and well-being.
Private health insurance covers health care services not included in Medicare, such as:
Depending on the level of cover, it may also allow treatment in hospital as a private patient.
Some businesses provide access to corporate health insurance plans at no cost or with a sizeable discount or a free period. This serves as a non-remunerative employee benefit and demonstrates that the company cares for the health and wellbeing of their people.
Some employers provide their employees with Life, Total and Permanent Disability, and Income Protection insurances. Because members are part of a group, they have access to more competitive rates than if they took out personal insurance policies. As a result, this is a common non-mandatory employee benefit in Australia.
Offer employee benefits through MYOB
MYOB has teamed up with workplace benefits provider Flare to offer affordable employee onboarding and benefits for all customers on MYOB Business. Whatever your business’ size or budget, you can offer your employees perks to attract the best people to your company and to strengthen their committment to their workplace. At MYOB, we have you covered.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.