Hire in Australia at a Glance: Employer Costs, Laws, and Benefits Explained
Hire in Australia at a Glance
Hiring employees in Australia comes with specific legal, tax, and compliance requirements that every employer must understand. Whether you are setting up a business, managing remote teams, or considering Employer of Record (EOR) solutions, this guide gives you a clear overview of employment laws, payroll obligations, employee rights, and hiring practices in Australia.
Key Facts About Hiring in Australia
|
CURRENCY |
$ Australian Dollar |
WORKING HOURS |
38 hours/week |
PUBLIC/BANK HOLIDAYS |
8 days |
|---|---|---|---|---|---|
|
CAPITAL |
Canberra |
LANGUAGE |
English |
REMOTE WORKERS |
1.1 M |
|
MINIMUM HOURLY SALARY |
$24.10 |
TAX YEAR |
1st Jul – 30th Jun |
DATE FORMAT |
DD/MM/YYYY |
|
MISCLASSIFICATION PENALTIES |
Misclassification fines of up to AU$54,000, plus AU$10,800 per manager involved, in addition to back-paying employee entitlements and interest. |
FUN FACT |
It would take more than 27 years to visit one new Aussie beach every day. |
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Employment Taxes in Australia
Employer Taxes
|
Tax Type |
Rate/Details |
|---|---|
|
Employment tax |
14.24% – 19.35% |
|
Payroll tax |
0 – 6.85% (varies by territory and salary) |
|
Superannuation |
11.5% (increasing to 12% in July 2025) |
Employee Taxes
|
Tax Type |
Rate/Details |
|---|---|
|
Medicare levy |
2% |
Progressive Income Tax Brackets
|
Taxable Income |
Income Tax |
|---|---|
|
$0 – $18,200 |
$0 |
|
$18,201 – $45,000 |
16c for each $1 over $18,200 |
|
$45,001 – $135,000 |
$4,288 plus 30c for each $1 over $45,000 |
|
$135,001 – $190,000 |
$31,288 plus 37c for each $1 over $135,000 |
|
Over $190,000 |
$51,638 plus 45c for each $1 over $190,000 |
Employer of Record (EOR) in Australia
An Employer of Record (EOR) in Australia is the legal employer of workers on behalf of foreign companies. The EOR handles all compliance requirements such as payroll, taxes, statutory benefits, and employment contracts.
Responsibilities of an EOR include:
- Ensuring compliance with Australian employment laws
- Processing payroll and issuing payslips
- Filing employment-related taxes and returns
- Distributing salary payments
- Managing statutory benefits
How EOR Works
- Company – Maintains a direct relationship with the employee, sets tasks, and manages performance.
- Employer of Record Provider – Manages payroll, taxes, benefits, and ensures compliance with all legal requirements.
- Employee – Works under the agreement, fulfilling their duties with full employment rights under Australian law.
Statutory Benefits in Australia
Mandatory Benefits:
- Medicare
- Superannuation
- Worker compensation insurance
- Flexible work rights
- Personal carer’s leave
Common Non-Mandatory Benefits:
- Life and disability insurance
- Long-term disability cover
- Employee Assistance Programs (EAP)
- Childcare places and subsidies
- Additional annual leave
- Private healthcare
- Paid parental leave
- Commuter allowances
- Career development allowances
Employee Rights and Protections
Employees in Australia benefit from strong workplace protections, including:
- Employment agreement and payslip entitlement
- Flexible working rights
- Equal opportunity and fair work information
- Protection from adverse employer actions
- Modern Awards and redundancy pay
- Union membership
Leave Entitlements in Australia
|
Leave Type |
Entitlement |
|---|---|
|
Paid time off |
4 weeks + bank holidays |
|
Paternity leave |
2 weeks paid leave |
|
Sick leave |
10 days |
|
Parental leave |
16 weeks |
|
Maternity leave |
52 weeks (90 days paid at the national minimum wage) |
Probation, Payment, and Termination
- Probation: No fixed statutory period; usually 3 to 6 months.
- Payment Frequency: Monthly is most common, but weekly or fortnightly is also permitted.
- End of Employment: Employers must follow fair dismissal procedures based on capacity, performance, misconduct, or redundancy. Failure to comply can result in unfair dismissal claims.
Employees with more than 6 months of service (12 months for small businesses) are legally protected from unfair dismissal. Redundancy pay applies to employees with over one year of service, in addition to notice periods.
Frequently Asked Questions About Hiring in Australia
What are the options for hiring workers in Australia?
- HQ payroll (not sustainable or compliant long-term)
- Independent contractors (non-compliant if full-time)
- Direct local employer setup (expensive and complex)
- Partnering with an Employer of Record (fast and compliant solution)
How long does it take to set up a company in Australia?
Company registration is straightforward, but ongoing compliance—payroll, taxes, and benefits management—adds complexity.
Can I hire people as independent contractors?
No, full-time contractors are not legally compliant under Australian law and may expose employers to fines.
What does HR compliance mean in Australia?
Employers must comply with laws covering contracts, wages, taxes, leave, and benefits. Non-compliance can lead to fines and employee claims.
How much does it cost to employ someone in Australia?
In addition to salary, employers must pay payroll tax and superannuation contributions. Exact amounts depend on salary levels and territory.
What does Employer of Record mean in Australia?
An EOR acts as the legal employer, handling compliance while the client company manages day-to-day tasks.
Who is responsible for filing and paying taxes through an EOR?
The EOR provider files taxes, superannuation, and social insurance on behalf of both the employer and employee.
Do employees get all rights when hired through an EOR?
Yes, employees receive full statutory rights, including maternity and parental leave, sick leave, minimum wage, and health coverage.
Final Thoughts
Hiring in Australia requires a deep understanding of employment law, payroll compliance, and statutory benefits. While direct hiring is possible, it can be complex and costly for foreign companies. Partnering with an Employer of Record in Australia offers a compliant, efficient, and flexible way to build teams while staying aligned with local laws.
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