Australia PEO

Hiring in Australia

As an English-speaking APAC country with a diverse workforce and stable economy, Australia is a top country of interest for businesses engaged in global expansion. But like hiring in any country, it’s important to understand the local labor laws that would govern your workforce before jumping in.

For the most part, employment relationships in Australia are governed by the Fair Work Act of 2009, along with its accompanying Fair Work Regulations and subsequent amendments. These laws outline workers’ rights, employer obligations, and procedures for labor disputes. Like in many countries, employers in Australia are required to provide written employment contracts detailing terms and conditions, including job responsibilities, compensation, working hours, and benefits. Employers must also comply with statutory requirements such as minimum wage standards, retirement fund contributions, and working time regulations.

Additionally, Australian law places specific regulations on the use of temporary and agency workers. These workers are most often employed under a fixed-term contract, which must include a Fixed Term Contract Information Statement (FTCIS) as specified by the Australian government.

Australia also has workers known as apprentices. The Australian government can provide support for finding, hiring, and employing apprentices, including financial support. These workers have unique contracts known as training contracts. Training contracts contain employer provisions, including working with a registered training organization (RTO).

Partnering with an employer of record (EOR) in Australia

For companies looking to expand quickly, or with less risk, hiring an employer of record (EOR) provider like Safeguard Global may be a solution. EOR providers work as your legal employer in a country, taking on the risk and ensuring employment contracts, tax withholdings, and other legal requirements are in order. A partner like Safeguard Global can also provide guidance on cultural expectations and hiring best practices, while helping you stay current with regulatory changes. Learn more about our Employer of Record solution and how it makes hiring easier.

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Doing business in Australia

Global PEO Services (GPS) helps companies hire employees in Australia without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.

When hiring employees in Australia, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.

Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Australian labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Australia. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.

Country Overview 

Australia is the sixth-largest country globally and is known as the “island continent” as it is relatively isolated from the rest of the world. Australia’s economy emerged from the 2009 recession with minimal damage and has consistently ranked among the affluent nations in terms of per capita income. 

Capital City 

Canberra

Currency 

Australian Dollar (AUD)

Language 

English

Government  

Federal Parliamentary Democracy

In Australia, an employment contract can be either in writing or verbal. 

An employment contract must meet the legal minimum set out in the National Employment Standards (NES) or in any awards, enterprise agreements, or other registered agreements that may apply. Thus, irrespective of whether they have signed a contract, all employees are covered by the NES. 

Some of the details typically mentioned in the written contract include: 

• The type of employment 
• Working hours 
• Entitlements 
• and more 

The different types of employment relationships are: 

• Permanent Employment – Permanent employees in Australia are employed on an ongoing basis until the employment agreement is abolished by either the employer or the employee. Permanent employees can work full-time or part-time, depending on their schedule. Permanent employees are entitled to a variety of benefits. 
• Fixed-Term Contracts – A fixed-term contract is for a specific duration of employment, and the employees can usually work full-time or part-time. Whether full-time or part-time, fixed-term employees are generally entitled to the same wages, penalties, and leave as permanent employees. 
• Temporary Employment – Casual employees are temporary employees in Australia. A casual employee is someone who accepts a job offer from an employer knowing that there is no firm advance commitment to continuing work with an agreed-upon structure of work. They can terminate employment without notice unless a registered agreement, award, or employment contract requires it. 

Probationary period 

At the onset of employment, employers determine the length of the probationary period, which can vary from a few weeks to a few months. 

Work/Time Regulations 

In Australia, the average workweek is 38 hours. Awards, certified agreements, and Australian Workplace Agreements typically include regular working hours, rest breaks, overtime, and penalty rates. 

Leaves 

Employees in Australia are entitled to the following leaves: 

• Annual leave – Full-time and part-time employees in Australia are entitled to at least four weeks of paid annual leave. Shift workers are entitled to 5 weeks of paid vacation every year. Casual employees are not permitted to take annual leave. 
• Maternity leave – Female employees may begin their break up to 6 weeks before the expected delivery date. 
• Sick leave – Sick and carer’s leave are part of one entitlement in Australia. Full-time employees are entitled to ten days of vacation per year.  
• Paternity leave – Also known as Dad and Partner Pay, is provided to eligible employees in Australia for two weeks. Employees may be eligible for up to 18 weeks of paid parental leave if they meet specific qualifications. 

The following are the statutory national holidays observed in Australia: 

• January 1 – New Year’s Day 
• January 26 – Australia Day 
• April 2 – Good Friday 
• April 5 – Easter Monday 
• April 25 – ANZAC Day 
• December 25 – Christmas Day 
• December 26 – Boxing Day 

Benefits 

The retirement income system in Australia consists of three parts: 

• A means-tested Age Pension supported by public tax money. 
• Compulsory employer contributions to private superannuation funds provide a superannuation guarantee. 
• Voluntary pension contributions and other personal savings; retirement savings are encouraged by tax reductions. 

State benefits granted to residents of Australia are called social security (welfare) in Australia. Social security is a non-contributory scheme funded through general taxes (although there is a specific fee for Medicare). 

The core beneficiaries of social security are the elderly and disabled, single parents, families with children, unemployed people, and people who are sick or have a specific need. 

Some examples of social insurance programs are: 

• Dependents’/Survivors Benefit – Widow Allowance is a means-tested benefit that is paid every two weeks in Australia. On July 1, 2018, Widow Allowance was closed to new applicants, and it will be phased off entirely on January 1, 2022. Family tax benefit legislation may also provide further aid to families. 
• Life and Disability Insurance/Benefit – The Australian Social Security System provides disability payments in the form of the Disability Support Pension to persons under retirement whose income has fallen below the cut-off limit, which varies depending on age and family status to a chronic disability. Basic pension, mobility allowance, medical aid, and other benefits are available. 

The following are examples of other statutory benefits: 

• Unemployment 
• Birth Allowance 
• Child Allowance 

Termination 

Employers in Australia are required to provide employees with the following notice periods based on their continuous service: 

• Employment of 1 year or less – 1 week 
• Employment of 1 to 3 years – 2 weeks 
• Employment of 3 and 5 years – 3 weeks 
• Employment of more than 5 years – 4 weeks 

Employees over 45 who have worked with the same employer for at least two years are entitled to an extra week of notice. 

Visa/ Work Permits 

In Australia, typically, the following visa categories are available: 

• Visitor visas 
• Studying and training visas 
• Family and partner visas 
• Working and skilled visas 
• Refugee and humanitarian visas 
• Other visas 

Generally, there are two types of work visas available in Australia:  

• Temporary work visas – Temporary work visas usually require skilled workers where employers cannot find an adequately skilled Australian worker and allow for up to four years of stay. 
• Permanent work visas – Employers typically nominate permanent work visas, which can be regional or allow for work anywhere in Australia. 

Accounting 

Accounting standards must adhere to the Australian equivalent of International Financial Reporting Standards (A-IFRS). It is necessary to prepare annual financial reports. 

Taxes 

Corporate Tax 

The standard corporate tax rate is 30%. 

Value Added Tax (VAT) 

Goods and Services Tax (GST), an equivalent to value-added tax (VAT), applies at each level in the supply chain. 

The standard GST rate in Australia is 10%. It applies to most goods and services.

Filing Dates  

Typically, firms with June 30 year-ends are due to file tax returns on January 15 for big and medium-sized businesses (annual turnover surpassing AUD 10 million) and February 28 for other companies following the end of the financial year.

Penalties 

Significant global entities (SGEs) face penalties for late filing up to 100 times higher than large entities.

The 1988 Privacy Act regulates the protection of individuals’ privacy and handles personal data and information. Additionally, there are many other Federal and State Acts that govern privacy law. 

Effective May 25, 2018, Australian businesses of all sizes had to comply with GDPR if they have a business in the European Union (EU), offer goods and services in the EU, or supervise the conduct of individuals in the EU. 

The Criminal Code Act 1995 prohibits bribery in Australia. The penalties include imprisonment and a monetary fine. 

With our Global PEO/Employer of Record services, companies can expand into Australia and hire their employees without having to establish a branch office or subsidiary in Australia.

• Your candidate is hired via our Australia PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
• Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll – all in full compliance with Germany laws.
• Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
• With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

• Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 150+ Countries

• Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
• We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management, and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real-time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with a low headcount.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance, and staffing support. Learn more about our end-to-end international expansion services.

Contact Us

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How to hire in Australia

Expanding to other countries usually requires an organization to develop its workforce in that region first. This brings up the question; how to hire employees in Australia? International hiring isn’t always straightforward and there are a host of complexities with local laws and regulations. This creates a unique set of challenges in each new jurisdiction.

When hiring employees in Australia, it’s crucial to understand employment laws and compliance requirements. This sets realistic expectations for the process.

How can businesses hire in Australia?

Australia boasts a diverse and highly skilled workforce. In most countries, organizations doing business there must decide whether to hire independent contractors versus part-time or full-time employees. Regardless of the classification you choose, your Australian workers must comply with the guidelines of the designated classification.

Businesses preparing to hire in Australia will need to decide between handling everything in-house or outsourcing to an expert. Before deciding, it’s important to understand the pros and cons of each before making the final decision.

There are three options for employers planning to hire in Australia:

• Independent contractors
• Direct employees
• Professional Employer Organization (PEO)

Related: Australia employer of record

Hiring Contractors

If you opt to hire independent contractors in Australia, it’s important to know that this course of action has the most potential for errors. If left uncorrected, this can lead to expensive fines and penalties. Independent contractors must qualify under a specific set of employment laws. Most often these guidelines include the following:

• Contractors are allowed to work for multiple companies simultaneously – they cannot be restricted to only working for your business.
• Contractors are responsible for their working status and schedule – the business cannot dictate specific hours of operation.
• Contractors must be project-based, or they must work for shorter periods. If a contractor extends their time with a company, they run the risk of being classified as an employee.

The danger of misclassification is the fact that countries tend to side with employees during legal disputes. So, if a contractor works for an extended period, they can then legally argue for benefits and other compensation.

U.S. companies hiring and paying in Australia need international contractors to fill out IRS Form W-8BEN. This certifies their foreign worker status in the eyes of the U.S. government. Although this step will resolve tax compliance for the employer in the U.S., the business will still need to abide by Australian employment law.

If a worker is classified as an independent contractor but fails to adhere to the guidelines listed above, the worker can file suit for benefits, overtime, and more. This is a problem because the government historically sides with employees if there are any disputes without proper documentation from the employer. If the above guidelines are met, hiring an independent contractor in Australia can be an efficient method of employment.

For companies that are managing multiple contractors in different countries, contractor management might be the best solution. This allows you to pay all your contractors with a single invoice in their preferred currencies.

Hiring Employees Directly

If you are planning to hire in Australia for full- or part-time employees, you will need to establish a legal entity there. Setting up a legal entity is typically a costly and time-consuming endeavor, which can take anywhere from three to six months to complete.

Legal entities are the foundation of all operations within a country, meaning they can impact every aspect of a business, including finance, accounting, IT, and other supply chain functions. If this is the route your business decides to pursue, it’s highly recommended that you work with an expert during this process so you can ensure that the structure isn’t inefficient or costly to maintain.

In general, there are three primary components to incorporating a business in Australia:

1. Incorporation and Registration
   • Prepare entity registration documents
   • Prepare local entity articles of incorporation
   • Advise on corporate governance structure – local director/shareholders requirements
   • Apply for and obtain a business license and entity registration approval
   • Apply for and obtain a tax ID
   • Register the newly incorporated entity to be a local employer
2. Post Incorporation
   • Payroll setup
   • Statutory benefits and social security registration
   • Data protection registration
   • Accounting setup, including bookkeeping and reporting
   • Local bank account setup
   • Local indirect tax – VAT | GST | HST
3. Corporate Annual Compliance
   • Preparation of group consolidated accounts and financial statements under IFRS, US GAAP, or other local GAAP and statutory audit support
   • Tax, payroll, and statutory returns
   • Handling of correspondence and other administrative duties

Related: Hiring International Contractors or Employees

Outsource Hiring to a PEO Provider

You can hire and pay employees in Australia without the hassle of DIY processes by using a global Professional Employer Organization (PEO). PEOs, sometimes called an Employer of Record (EOR), act as partners to your business. Many businesses choose this route because the PEO reduces international risks and liabilities, while also enabling the business to continue managing the day-to-day responsibilities of their international workforce.

Put differently, the PEO handles the administrative burden related to hiring and paying international employees, which in turn allows the business to focus on other important growth initiatives. Because PEOs use their existing legal entity network for hiring and taxes, companies can hire much faster without sacrificing compliance. Here are a few of the administrative services a PEO provides:

• Fast international hiring
• Global payroll management
• In-country compliance
• Reduced risks with international contractors
• Global talent acquisition
• Best-in-class HR technology for international workforces
• Australian employment contracts

Related: Market expansion strategies that work

Australian Employment Law

Australian Employment Contracts

Although a written employment contract is not a statutory requirement for businesses that hire and pay in Australia, it’s good practice to have one in place, as it helps reduce the risks involved with managing the employment relationship and can be referred to if there are any disputes.

Employers need to be aware of a few terms and conditions as they enter an employment relationship with Australian employees. For example, the Australian Fair Work Act requires all employers to provide new employees with a copy of the Federal Government’s Fair Work Information Statement. New casual employees must also be provided with a copy of the Casual Employment Information Statement.

Collective Agreements

In Australia, Collective Agreements are referred to as Enterprise Agreements, and they fall under the Fair Work Act 2009.

If this applies to your hiring situation, your business may be subject to certain procedural steps to enter into a collective agreement, such as:

• Provide employees with a notice of their right to be represented during bargaining for the agreement.
• Provide a copy of the proposed agreement to employees and explain the terms of the agreement and the effect of those terms to employees, considering the circumstances and needs of the relevant employees.
• Notify employees of the date and place at which voting occurs and the voting method to be used.

The Fair Work Commission must approve these agreements. They will ultimately be the organization that determines if all the statutory requirements were met during the bargaining process.

Minimum Wage

The national minimum wage for hourly employees is $23.23 per hour or $882.80 per week. This applies to any employees who aren’t covered by an enterprise agreement or modern awards, which are legal documents that outline the minimum pay rates and conditions of employment. Minimum wages are generally lower for junior employees, apprentices, and those receiving a disability support pension.

Bonuses

Discretionary bonus schemes, as well as long-term incentive structures for executives, are common in Australian businesses. Australia has no statutory restrictions on bonus arrangements, so employers are free to decide how to implement bonuses. However, bonus schemes must be created with clarity to avoid any confusion or uncertainty.

This is crucial, as a lack of clarity around a specific bonus structure could cause unnecessary risk to the employer if there are any disputes. Employers should make it clear that they have the right to alter or withdraw a bonus scheme at their discretion.

Working Hours

According to the National Employment Standards (NES) in Australia, individuals have a maximum working week of 38 hours. Employers can ask employees to work additional hours if conditions are “reasonable”. Working hours can be established and defined by modern awards or enterprise agreements, which typically contain details regarding working hours, such as:

• The span of ordinary hours of work
• Maximum number of ordinary hours that can be worked in a day or shift
• Minimum number of rest breaks between finishing and starting work
• Additional pay rates for overtime, shift work, weekend, or public holiday work

Businesses can rarely opt out of these provisions on an individual basis. It almost always must be done through an enterprise agreement.

Holiday Entitlement

The NES requires that full-time employees receive four weeks of paid annual leave per year. This is pro-rated for part-time employees and increased for shift workers (which is defined in modern awards).

Casual employees do not have any annual leave requirements. Additionally, annual leave accrues each year and must be paid out upon termination. In some instances, companies can require employees to use their annual leave, instead of having it accrue each year.

In addition to annual leave, Australia has eight national paid public holidays and other state and territory paid public holidays. As you prepare to hire employees  in Australia, it’s important to take note of these dates:

• New Year’s Day
• Australia Day
• Good Friday
• Easter Monday
• Anzac Day
• Christmas
• Boxing Day

Australian employees are also entitled to:

• Maternity leave
• Paternal leave
• Sick leave
• Compassionate leave
• Community service leave
• Reserve leave
• Family and domestic violence leave

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HR & Benefits in Australia

Your Employees, Our HR

Get the Australia HR support you need without setting up a legal entity or hiring HR personnel. Save time and enjoy peace of mind as our experts manage all aspects of your Australia HR.

Australia Recruitment Solutions

Need help finding talent? Our dedicated team of experienced recruiters can help you find and hire the employees you need, fast. We have an in-depth understanding of local job markets and provide you with access to exclusive talent networks, so you are always choosing from the best available candidates.

A solution for every staffing need:

• Contingent Hire
• Permanent Hire
• Recruitment Process Outsourcing (RPO)

Best in Class Employee Benefits

We provide high-quality benefits packages for your employees and their families. Our robust heath and benefits plans are designed to enhance local mandatory benefits while addressing employee expectations and cultural nuances.

Our employee benefits plans include:

• Top of the line health benefits (medical, dental, vision)
• Life insurance and short-term / long-term disability
• Employee assistance program – phone/online counseling & support
• Employee wellness program – health & wellness classes
• Business travel insurance

Guaranteed HR Compliance

Stay compliant without the complexity. Our experts manage the HR compliance requirements for your Australia teams and consistently monitor changes to labor laws so you are always informed and up to date.

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Payroll in Australia

Pay Employees Without the Hassle

Pay employees in Australia without setting up a legal entity. Get peace of mind as we manage all aspects of your Australia payroll, ensuring your employees are always paid accurately, on time, and in their local currency.

Cross-Border Payments & Payroll Compliance

Run compliant payroll in Australia no matter where your business is located. Our Australia payroll experts get you set up fast and ensure you are always in compliance with local payroll requirements.

Struggling to Manage Payroll for Independent Contractors?

Pay your contractors easily and without the risk. Rather than taking on the liabilities associated with employing an independent contractor, we allow you to hire them as employees through our Australia PEO. They continue to work for you, while we manage all aspects of payroll, HR, and compliance.

The Solution to Low Headcount Payroll

Eliminate complexity and reduce the cost associated with running payroll for just a few employees. With Global PEO Services, you gain full access to our pre-existing Australia payroll infrastructure, teams, and processes. Stay flexible, save time, all while getting the payroll services and support you need.

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Payroll & PEO in Australia

Australia Payroll Outsourcing & Management Services

Hire and pay employees in Australia without setting up a legal entity. With our Australia payroll and PEO services, you select the candidate, and we handle the rest.

After successfully hiring and onboarding your employees, we manage all aspects of the payroll process, ensuring your employees are always paid accurately and on time.

Our Australia payroll experts have an in-depth understanding of local payroll requirements and provide you with in-depth guidance and compliance support.

 

Our Australia PEO Payroll Solutions Cover:

Struggling to Manage Payroll for Independent Contractors?

Global PEO Services eliminates the complexity and liabilities associated with employing and paying independent contractors. We allow you to hire your contractors as employees through our Australia PEO. The individual continues to work for you, while we manage all aspects of payroll, HR, tax, and compliance.

The Solution to Low Headcount Payroll

Finding a payroll option for countries where you have low headcounts can be a challenge. Global PEO Services provides the solution. By using our Australia PEO to manage your payroll, you leverage our pre-existing payroll infrastructure, teams, and processes, even if you only need payroll for just one employee. Stay flexible, save time, all while getting the payroll services and support you need.

Want to learn more about our PEO Payroll Services? Reach out to us today!

Work with Global PEO Services

Growing globally can be an exciting time for an organization. While there are always risks and challenges during global expansion, Global PEO Services (GPS), a Safeguard Global company, can help mitigate these risks, while still giving you control over your day-to-day operations.

With laws and regulations frequently changing, hiring and paying in Australia can be challenging when keeping track of compliance, legal and tax requirements. We manage all the legal requirements and payroll, while the business manages the international team on their daily tasks. For companies hoping to hire and pay in Australia, GPS can help you grow and remain compliant.