With ongoing changes to employment laws, businesses must stay informed to ensure compliance and financial stability. One of the most significant updates in Western Australia’s employment regulations is the increase in casual loading. This change affects both employers and casual workers, impacting payroll calculations, tax obligations, and employment rights. Understanding these updates will help businesses plan effectively and manage workforce costs.

Increase Casual Loading

From 31 January 2025, Western Australia’s employment laws have changed, increasing casual loading from 20% to 25% under the state system. This means adult casual employees earning the state minimum wage will now receive $30.22 per hour. Employers must ensure their payroll systems reflect these changes to stay compliant and avoid potential disputes.

For more details on these employment law changes, visit the Government of Western Australia’s official employment updates.

Minimum Wage Updates

Employees in WA’s state industrial relations system who are not covered by a WA award or industrial agreement are classified as award-free employees. These employees must be paid at least the state minimum wage, which increased on 31 January 2025 due to the casual loading adjustment from 20% to 25%.

For award-free casual employees, the updated minimum pay rates are:

Industry-Specific Pay Rates

Casual pay rates still depend on factors like age, industry awards, and job classifications. Junior employees, apprentices, and trainees may have different wage structures. To ensure compliance, businesses should check the latest WA award summaries for their specific industry.

You can find the latest WA award summaries updates Here.

Tax and Financial Implication

The increase in casual loading will also have financial and tax implications for both employers and employees:

Impact on Businesses

• Higher Wage Expenses – The 5% increase in casual loading means businesses will have higher payroll costs, which may lead to adjustments in pricing or budgeting.
• Payroll Tax Considerations – For businesses that exceed the WA payroll tax threshold, higher wages may push them into a higher tax bracket, increasing payroll tax liabilities.
• Superannuation Contributions – While casual loading itself is not subject to super, the overall increase in wages means higher Superannuation Guarantee (SG) contributions, impacting employer expenses.
• Tax Deductibility – Higher wage expenses can be claimed as a tax deduction, potentially reducing a company’s taxable income.

Impact on Casual Employees

• Higher Taxable Income – With casual employees earning more per hour, their total taxable income may increase, potentially pushing them into a higher tax bracket.
• Medicare Levy & Government Benefits – Higher earnings may affect eligibility for government benefits (e.g., Centrelink payments) or increase Medicare Levy Surcharge liabilities if income thresholds are exceeded.

Key Actions for Employers

Employers covered under WA’s state industrial relations system should take the following steps:

• Update payroll systems – Ensure wage calculations reflect the new casual loading rate. Payroll software like Xero, MYOB, or QuickBooks should be updated accordingly.
• Ensure compliance – Review Single Touch Payroll (STP) submissions to confirm accurate wage reporting and avoid audit risks.
• Plan for increased costs – Businesses should assess the financial impact of higher wage expenses and adjust budgets where necessary. For example, a small business employing 10 casual staff at 20 hours per week could see a noticeable rise in wage costs due to the 5% increase in loading.
• Communicate with employees – Inform casual workers of the new rates and their right to request conversion to permanent employment where eligible.
• Review tax and payroll obligations – Ensure payroll tax thresholds are considered, and adjustments are made to superannuation contributions as needed.
• Stay informed – Keep up with employment law changes by referring to official WA Government resources or seeking advice from HR, payroll, and tax professionals.

Managing payroll and tax compliance can be challenging, but MKG Partners makes it easy. Our bookkeeping and payroll services ensure your business stays compliant with wage updates, payroll tax requirements, and STP reporting. Let us handle your payroll so you can focus on growing your business. Contact us now!