The Sick Tax in Australian Workplaces and Why ‘Presenteeism’ Is Costing Businesses Billions

If you’ve ever felt guilty about calling in sick, you’re not alone. Natasha Hawker, founder of Employee Matters, recently explained on Channel 7’s Sunrise how the “sick tax” — an unspoken pressure on employees to attend work when ill — is costing Australian businesses $30 billion annually in lost productivity and workplace illness.

The sick tax refers to the culture of “presenteeism,” where workers feel pressured to go to work despite being sick. This often stems from fear of criticism, job insecurity, or feeling the need to prove commitment. Natasha highlights how this issue has been amplified in hybrid work settings, where employees worry about appearing less dedicated if they take sick leave on office days.

Presenteeism can lead to a cascade of negative effects — reduced productivity, longer recovery times, and the spread of infectious illnesses in the workplace. According to Natasha, one sick employee can end up sidelining an entire team, resulting in weeks of lost work and impacting overall business performance.

Employee Sick Leave Entitlements in Australia

Under Australian employment law, permanent full-time employees are entitled to 10 days of paid sick leave per year, with pro-rata entitlements for part-time workers. Despite these rights, many employees hesitate to use their sick leave due to the sick tax culture. Casual workers, however, do not receive paid sick leave.

How Employers Can Combat the Sick Tax and Promote Workplace Wellbeing

Creating a healthy workplace starts with leadership. Natasha advises:

• Lead by example: Encourage managers to take sick leave when necessary.
• Promote open communication: Ask employees to notify managers by phone rather than text when unwell.
• Normalise rest and recovery: Reassure staff that staying home when sick benefits everyone.
• Implement supportive policies: Ensure sick leave policies are clearly communicated and applied fairly.

Addressing the sick tax is essential for reducing presenteeism and fostering a culture that values employee wellbeing. Businesses that prioritise health see improved morale, higher productivity, and fewer outbreaks of illness in the workplace.