When entering a roundabout, a driver must give way to any vehicle in the roundabout and any tram that is entering or approaching the roundabout. In many cases, this will mean giving way to vehicles already in the roundabout on your right. However in some cases, such as smaller roundabouts, vehicles who have entered to the left or the opposite side of the roundabout may mean you cannot safely enter and have to give way as they are already in the roundabout.
When entering a roundabout, it is not compulsory to come to a complete stop, unless it is done to avoid a collision. Roundabouts are meant to flow, and stopping unnecessarily is hazardous.
Once in the roundabout, a driver must give way to a tram, or a bus travelling along tram tracks that is in, entering or approaching the roundabout.
Using indicators at roundabouts also seems to cause confusion, but it’s not that different to any other type of intersection. Before entering the roundabout indicate as you normally would: left to turn left, right to turn right and no indicator if you are going straight ahead. Remember to indicate long enough to give sufficient warning to other drivers and pedestrians about where you plan to go.
If you are going to leave the roundabout more than halfway around, then you should indicate right. Halfway around is defined as leaving on a road that is substantially straight ahead from the road you entered on. The difference to other intersections is in exiting. Where practicable, give a left change of direction signal when leaving the roundabout.
Overtaking is permitted in roundabouts, so long as it is safe to do so, and remembering to indicate as you would normally do. The overtaking vehicle must pass at a sufficient distance to avoid a collision or obstructing the path of the vehicle being overtaken.
On multi-lane roundabouts, cyclists (and animal riders!) riding in the far left lane of the roundabout are required to give way to any vehicle leaving the roundabout. This means that riders who wish to turn right should position themselves towards the middle of the roundabout, if safe to do so for the speed and type of traffic. Drivers are not required to give way to pedestrians when leaving a roundabout, but common-sense should prevail.
For more information see the Victorian Road Safety Road Rules rules 109 to 119.
VicRoads has produced a short video to help motorists understand how to give way at roundabouts.