What is a typical payroll cycle in Australia and New Zealand? Understanding the Fortnightly Payroll Schedule

Payroll is an essential aspect of any business. To retain employees, it is essential to ensure their wages, taxes, and benefits are accurate and received on time, every time. Payroll cycles vary across different countries, and in this article, we're going to explore the fortnightly payroll cycle, which is common practice in Australia and New Zealand. We'll delve into the reasons behind this payroll cycle and provide tips for companies looking to expand into the Australian market. 

What is a fortnightly payroll cycle?

In Australia, the fortnightly payroll cycle is widely used by most companies. A fortnightly payroll cycle is a type of payroll schedule that occurs every two weeks. This means that employees are paid once every two weeks, which usually results in 26 pay periods per year. The exact days of the week that the payroll is processed and paid out can vary depending on the organisation and the terms of the employment contract. 

A fortnightly payroll cycle is a common practice in Australia and New Zealand, as well as in some other countries around the world. It provides a regular and predictable pay schedule for employees and allows employers to better manage their cash flow. However, it also means that employees may have to budget their finances differently than those who are paid on a monthly or weekly basis. 

It's important for both employers and employees to understand the specifics of their payroll cycle, including the pay period end date, the pay date, and any applicable taxes or deductions. This ensures that everyone is on the same page and can plan their finances accordingly. 

Why Australia and New Zealand using fortnightly payroll cycle?

Historically, Australia was a British commonwealth nation, and it followed the UK's payroll practices. While these days the UK primarily uses monthly and weekly payroll cycles, the fortnightly payroll cycle is still popular in Australia. 

Fortnightly pay has become the norm for many workers in Australia. The first legislation Legislation requires employers to pay their employees on a regular basis  – at least once per month. The adoption of the fortnightly pay cycle was most likely driven by several factors, including the need to align pay cycles with other financial obligations such as rent or mortgage payments.

For practical information on Australian work-related policies, companies can refer to the Fair Work Ombudsman and the Workplace Gender Equality Agency. These resources provide comprehensive information on employment laws, workplace health and safety, and pay and conditions. 

If you're a company looking to expand into Australia, partnering with Atlas can help you handle payroll and compliance with ease. Our team of experts understands the local practices and laws and can ensure that companies remain compliant with statutory requirements. With Atlas, companies can manage their payroll and HR functions hassle-free, allowing them to focus on their core business activities. 

In conclusion, the fortnightly payroll cycle is a popular practice in Australia due to its high income, social benefits, and tax rates. Companies looking to expand into Australia must understand the local practices and comply with statutory requirements to avoid legal issues. By partnering with Atlas, companies can handle their payroll and compliance with ease and focus on their core business activities.