The Influenza Complications Alert Network (FluCAN) is a sentinel hospital-based surveillance program that operates at sites in all jurisdictions in Australia. This report summarises the epidemiology of hospitalisations with laboratory-confirmed influenza during the 2018 influenza season. In this observational surveillance system, cases were defined as patients admitted to any of the 17 sentinel hospitals with influenza confirmed by nucleic acid detection. Data were also collected on a frequency-matched control group of influenza-negative patients admitted with acute respiratory infection. During the period 3 April to 31 October 2018 (the 2018 influenza season), 769 patients were admitted with confirmed influenza to one of 17 FluCAN sentinel hospitals. Of these, 30% were elderly (≥65 years), 28% were children (<16 years), 6.4% were Aboriginal and Torres Strait Islander peoples, 2.2% were pregnant and 66% had chronic comorbidities. A small proportion of FluCAN admissions were due to influenza B (13%). Estimated vaccine coverage was 77% in the elderly (≥65 years), 45% in non-elderly adults with medical comorbidities and 26% in children (<16 years) with medical comorbidities. The estimated vaccine effectiveness (VE) in the target population was 52% (95% CI: 37%, 63%). There were a smaller number of hospital admissions detected with confirmed influenza in this national observational surveillance system in 2018 than in 2017, with the demographic profile reflecting the change in circulating subtype from A/H3N2 to A/H1N1.