How to Read Your Australian Payslip: Every Line Item Explained
Published by SWIFT ACCOUNTANTS PTY LTD · Last reviewed
Many Australian employees receive their payslip each fortnight without fully understanding what each line means. Whether you are a new employee, a recent graduate, or simply want to verify that your employer is deducting the correct amount of tax and super, this guide walks through every component of a standard Australian payslip.
What Information Must Appear on an Australian Payslip?
Under the Fair Work Act 2009, Australian employers must provide payslips within one working day of each pay period. A compliant payslip must include:
| Required Field |
|---|
| Employer name and ABN |
| Employee name |
| Date of payment and pay period |
| Gross pay |
| Net pay |
| All deductions |
| Superannuation |
| Leave balances |
Gross Pay
Gross pay is your total earnings before any deductions. It includes your base salary or ordinary hourly rate, plus any additional components paid in the period:
- Base salary / ordinary hours: Your standard wage for the period
- Overtime: Hours worked above your ordinary hours, typically at 1.5× or 2× your base rate
- Penalty rates: Higher rates for weekend, public holiday, or shift work
- Allowances: Payments for vehicle use, uniforms, tools, or other specific purposes
- Commission / bonuses: Performance-related payments
PAYG Withholding (Income Tax)
The largest deduction on most payslips is PAYG (Pay As You Go) withholding — the income tax your employer collects on behalf of the ATO. The amount withheld depends on your annual salary and your TFN declaration, including whether you have claimed the tax-free threshold.
If you have not provided a TFN to your employer, they are required to withhold tax at the top marginal rate of 47% (including the Medicare Levy) until you do so. Always submit your TFN declaration promptly when starting a new role.
Use our Salary & Tax Calculator to verify whether the PAYG amount on your payslip looks correct for your income level.
Medicare Levy
The Medicare Levy (2% of taxable income) is typically included within the PAYG withholding figure on your payslip — it is not always shown as a separate line item. When you lodge your tax return, the ATO calculates the Medicare Levy separately based on your actual annual income. See our Medicare Levy guide for full details including the Surcharge.
HECS/HELP Repayments
If you have a HECS-HELP debt and earn above the repayment threshold (approximately $54,435 for 2025–26), your employer will withhold an additional amount for HECS repayments — this appears as a separate line on compliant payslips. The withholding amount is based on your annual salary, ensuring you don't face a large HECS debt at tax time.
You indicate your HECS debt status on your TFN declaration form when you start employment. This triggers the correct withholding schedule. See our HECS/HELP guide for repayment rates and thresholds.
Salary Sacrifice
If you have a salary sacrifice arrangement (most commonly for superannuation or a novated car lease), the sacrificed amount reduces your gross taxable income on the payslip:
The sacrificed portion is taxed at 15% within the super fund rather than at your marginal income tax rate — a significant tax saving for those in the 30%+ brackets.
Superannuation on Your Payslip
Your payslip must disclose the superannuation contribution your employer has made or will make. For 2025–26, this is 12% of your ordinary time earnings.
Important: some employers pay super monthly, others quarterly. Confirm whether super amounts shown are already paid to the fund or are accruing. You can verify super has actually been received by your fund via myGov (linked to the ATO). Unpaid super can be reported to the ATO.
Leave Balances
Most payslips show your accrued and available leave balances, including:
- Annual leave: Accrues at 4 weeks per year (pro-rata for part-time)
- Personal/sick leave: Accrues at 10 days per year under the National Employment Standards
- Long service leave: Varies by state — typically accessible after 7–10 years of service
Net Pay
Net pay is the final amount deposited into your bank account after all deductions:
Super is not deducted from your net pay — it is paid by your employer separately, on top of your gross salary.
Checking for Errors
Common payslip errors include:
- Incorrect hourly rates or classification levels (check against your award or enterprise agreement)
- Missing or underpaid super (check using the ATO's super guarantee calculator)
- Incorrect PAYG withholding (can occur if TFN or tax-free threshold status is not updated)
If you believe your payslip contains an error, raise it with your payroll team first. Persistent underpayment of wages or super can be reported to the Fair Work Ombudsman or the ATO.