To increase an employee’s annual wage in QuickBooks Online (QBO) in Australia, you simply update their salary in their employee payroll profile and, if needed, use the new “effective date” feature to schedule the increase for a future pay period.

Quick steps in QBO Australia

1. Open the employee’s payroll profile

  1. In QBO, go to Payroll → Employees.
  2. Click the employee’s name to open their profile.
  3. Look for the Payroll details or Earnings section.

2. Update the annual salary

  1. Find the field for Annual Salary (or Hourly/Annual Rate depending on your setup).
  2. Enter the new annual wage amount.
  3. Save the changes.

Once saved, the new salary will apply to future payroll runs from that point onward.

3. (Optional) Schedule the increase with an effective date

QBO Payroll now supports effective dating for pay changes:

  1. When editing the employee’s pay rate, you can choose an effective date (e.g. “first pay period of the new year”).
  2. QBO will automatically switch to the new rate on that date, so you don’t need to remember to update it manually.

This is especially useful for:

  • Annual reviews
  • Birthday increases
  • Award-based rate changes

Handling raises mid‑pay period

If the raise is effective from a date inside an existing pay period , QBO doesn’t natively split old/new rates automatically. Common approaches:

  • Manual calculation :
    • Calculate what they earned on the old rate up to the change date.
    • Calculate what they earned on the new rate from that date to the period end.
    • Enter the total manually in the pay run.

  • Two pay items (Desktop-style workaround) :
    In some setups, you can:

    • Create a separate pay item like “Old rate” or “Pre‑increase rate”.
    • In the pay run, allocate hours/amounts to “Old rate” for days before the change and to the standard salary/hourly item for days after.
      This is more common in Desktop; in QBO, the usual approach is the manual split or using the effective date for future periods.

Australian compliance considerations

When increasing wages in Australia, make sure the new rate:

  • Meets or exceeds the relevant award minimum for that role.
  • Aligns with the employee’s contract (if under a contract of employment).
  • Is reflected in superannuation calculations (super is based on ordinary times earnings, which includes salary).
  • Doesn’t breach any payroll tax or Fair Work rules (e.g. notice periods for changes where required).

Checking and reporting

After changing the salary:

  • Run the Employee Details or Employee Employment Details report to confirm the new annual wage is showing correctly.
  • Check a sample pay run to ensure the new rate has been applied as expected.

Information gathered from public forums or data available on the internet and portrayed here.