The absorptivity of a material is a major uncertainty in numerical simulations of laser welding and additive manufacturing, and its value is often calibrated through trial-and-error exercises. This adversely affects the capability of numerical simulations when predicting the process behaviour and can eventually hinder the exploitation of fully digitised manufacturing processes, which is a goal of “industry 4.0”. In the present work, an enhanced absorption model that takes into account the effects of laser characteristics, incident angle, surface temperature, and material composition is utilised to predict internal heat and fluid flow in laser melting of stainless steel 316L. Employing such an absorption model is physically more realistic than assuming a constant absorptivity and can reduce the costs associated with calibrating an appropriate value. High-fidelity three-dimensional numerical simulations were performed using both variable and constant absorptivity models and the predictions compared with experimental data. The results of the present work unravel the crucial effect of absorptivity on the physics of internal flow in laser material processing. The difference between melt-pool shapes obtained using fibre and CO2 laser sources is explained, and factors affecting the local energy absorption are discussed.