Employing in Australia
An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Australia – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Australia worth checking out!
With its reliable economy and progressive economic growth, we’re seeing an increasing number of employers look for their next expansion opportunity “down under”. As the world’s 14th largest economy, Australia is a reliable and low-risk market to enter — representing a safe but potentially rewarding option for those looking to grow internationally.
Australia is a great place to find talented people to join an international team. As well as having a well-educated workforce (well over a third of the population hold a tertiary qualification), the country also offers a multi-cultural, multi-lingual talent pool.
Thanks to its close business ties with Asia, Australia offers a potential gateway to sell goods and services into Asian markets, while its many free trade agreements also provide opportunities to do business all around the world. This combination of a thriving domestic market and a stepping stone for further global trade makes Australia a tempting target for internationally expanding companies.
Master Country Guide in Australia
This guide covers everything from the basics of employer of record services to the latest changes in Australian employment law. Whether you're new to the Australian market or a seasoned veteran, this guide will help you find and retain top talent.
Employment contracts and related legislation
Employees in Australia benefit from protection in the workplace through a combination of fair work laws, awards, enterprise agreements and employment contracts.
If you’re looking to expand into Australia, you should be aware that some jobs are covered by awards (modern awards). A modern award is a document which sets out the minimum terms and conditions of employment on top of the National Employment Standards (NES). These modern awards came into effect on the 1st of January 2010. Our contracts team will work with you to identify if an award applies and if so, we will ensure the contractual provisions meet the requirements of the applicable award.
Alongside awards, employment in Australia is governed by the National Employment Standards, which dictate certain statutory provisions: maximum working hours, annual leave, personal/carer's leave and compassionate leave. It’s compulsory for employees to be provided with a copy of these provisions (Fair Work Information Statement) on commencement of employment. Further information on the Fair Work Information Statement.
Holidays & leave
Healthcare in Australia
High earners face an extra tax unless they take out private insurance, and costs for private insurance rise incrementally once an individual reaches the age of 30. A high proportion of the population — around 50% — has private insurance. For most, this is in addition to Medicare.
There are three basic types of private insurance: hospital insurance, ‘extras’ and ambulance insurance. Hospital insurance provides cover in private hospitals with private doctors. Extras include things like glasses and dental costs. Ambulance insurance provides cover as emergency vehicles are not covered by Medicare (except in some states).
Individuals who are not resident in Australia but who may be working on a visa would not normally be entitled to Medicare in Australia — instead, the individual is required to take out their own private policy. It should be noted that some visas dictate that the policy must be one of the "registered private healthcare policy providers” and places the onus on securing this healthcare on the employee.
If an employee on a working visa doesn't have access to the state system and is taken ill or hospitalised, this can be very costly for them and the state may well levy these charges on the employee. It’s, therefore, important to ensure employees on a visa have the requisite insurance in place.
Employers costs in Australia
Employers are required to pay superannuation contributions (also called “superannuation guarantee” (SG) contributions) to an approved superannuation fund for their employees at 9.5% (as of 2020) of the employees’ “ordinary time earnings”. This generally consists of wages and salaries, commissions and allowances — but not overtime. This rate is due to increase to 10% from 1 July 2021 and will continue to increase progressively up to 12% from 1 July 2025. This generally consists of wages and salaries, commissions and allowances — but not overtime.
Fringe benefit taxes
In Australia, employers have to pay an additional Fringe Benefit Tax (FBT) if they provide certain benefits to their employees. This FBT applies even if the benefit is provided by a third party under an arrangement with the employer. Examples of these include:
- Allowing an employee to use a work car for private purposes
- Giving an employee a discounted loan
- Paying an employee’s gym membership
- Providing entertainment by way of free tickets to concerts
- Reimbursing an expense incurred by an employee, such as school fees
- Giving benefits under a salary sacrifice arrangement with an employee
A fringe benefit liability may also arise if an employee incurs expenses and the employer:
- Reimburses them for expenses
- Pays a third party for the expenses
The expenses can be business or private expenses or a combination of both, but they need to be incurred by the employee. If the employer incurs the expense, for example through a corporate credit card, they won’t have provided an expense payment fringe benefit. However, depending on what is paid for — a property, meal entertainment or tax-exempt body, for example — entertainment fringe benefit could arise.
Frequently asked questions.
Keen to engage an EOR in Australia? At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey
To find out how we can help your business with our employment solutions, contact us today.
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