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.

Australia Country Guide

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

The Fair Work Act 2009 does not use the word ‘probationary’, but we incorporate this into our contracts for ease of understanding. The act states that a new employee must serve a minimum period of employment of six or 12 months before they are allowed to access the unfair dismissal legislation. The applicable period is subject to certain criteria.

The Fair Work Act 2009 allows for the following vacation leave as a minimum:

  • Four weeks paid annual leave (carried over if unused)
  • 10 days paid personal/carer’s leave (carried over if unused)
  • Payment for public holiday (if employee would have usually worked that day)
  • Two days paid compassionate leave for each occasion when a member of the employee’s immediate family or household sustains a serious illness, serious injury or dies
  • All employees are entitled to five days unpaid family and domestic violence leave (in a 12-month period)
In Australia, the public holidays which an employee will enjoy will vary depending on which province they reside in. Employers can also agree to different vacation days during employment negotiations.

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

Under national law, full-time employees in Australia are entitled to 10 days paid personal, sick or caregivers’ leave per year. Untaken sick leave accumulates from year to year, but it is not paid out on termination of employment.

Sick leave (called personal leave) can be taken when the employee is unwell or to allow the employee to care for a family member who is unwell or affected by an unexpected emergency. In Australia, sick leave is funded by the employer rather than by the state.

The Fair Work Act 2009 provides the following termination notice periods where no written agreement or relevant modern award applies:

  • One year or less — one week
  • More than one year to three years — two weeks
  • More than three years to five years — three weeks
  • More than five years — four weeks
Working in Australia

Healthcare in Australia

Australian Residents

Australia boasts a universal public healthcare system. All permanent Australian residents have access to Medicare, the state health care provider, and this is paid for through taxes.  The government is also active in trying to persuade anyone who earns over a certain threshold to take out private policies on top of their state coverage to relieve pressure on the system. Medicare provides coverage for basic healthcare coverage including GP costs, hospital costs, 85% of a specialist’s costs and pharmaceutical costs.

Private insurance

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).

Non-residents

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

Superannuation

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.

Australia EOR

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.

As of 1 July 2022, the current national minimum wage in Australia is $21.38 per hour, or $812.60 per 38-hour week (before tax). The minimum wage is reviewed every year on 1 July, and is set by the Fair Work Commission. The national minimum wage applies to all employees aged 21 years and over, who are full-time, part-time, casual, or employed on a commission or piecework basis.

Sick and carer's leave in Australia, also known as personal leave or personal/carer's leave, lets an employee take time off to help them deal with personal illness, caring responsibilities and family emergencies. This entitlement has a maximum of 10 days for full-time employees. It is pro-rata for part-time workers and does not apply to casual employees.

Australia has a number of statutory and common employee benefits that are outlined in the Fair Work Act 2009. These benefits include annual leave, personal/carer's leave and paid compassionate leave and sick leave. Annual leave is typically 4 weeks per year (20 days) for full-time employees, and pro-rata for part-time and casual employees.

A person is a casual employee if they accept an offer for a job or are already employed on an hourly, daily or weekly basis without any firm commitment or contract for further/ongoing work.

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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