AustraliaAn employer’s guide to employment regulations, laws and Employer of Record (EOR) services in Australia.
Looking to hire in Australia? EOR services can help.
Planning to grow your business in Australia? An Employer of Record (EOR) service lets you recruit, onboard, and manage staff without the hassle of setting up a local legal entity.
The EOR becomes the formal employer for your team, overseeing local recruitment, payroll processing, benefits, and tax obligations in compliance with Australian employment standards.
Using an EOR streamlines the management of your global workforce, letting you navigate the intricacies of international employment regulations with ease and maintain control over your operations.
How to hire in Australia
Step 1: Choose between using an entity or an EOR
When planning to expand into Australia, you need to decide whether to establish a local entity or to work with an Employer of Record (EOR) service.
Creating a local entity gives you complete control over your business operations. It allows you to build a direct relationship with your employees and establishes a firm presence in the market.
This option is generally suited for companies that intend to hire a large workforce. However, it demands a significant investment in time and resources. You’ll have to navigate Australian regulations, set up a business entity, and ensure compliance with all relevant laws.
Using an EOR can streamline the process of hiring and onboarding staff. The EOR manages all the legal and administrative aspects of employment, making it easier and less risky for you to enter and exit the Australian market.
With an EOR, while the service handles the legal requirements, you retain control over day-to-day operations and employee management.
Step 2: Finding an EOR
Selecting the right EOR for your Australian team is crucial. An unsuitable EOR can lead to compliance problems, unforeseen costs, and dissatisfaction among your employees.
Here are key factors to consider when choosing an EOR:
- Legal compliance. Make sure the EOR is knowledgeable about Australian labor laws, employee rights, tax obligations, and local benefits. Opt for a provider with proven experience and a solid reputation in your industry.
- Customer service. Look for an EOR that offers thorough support. Multiplier provides 24/5 support and dedicated account managers.
- Transparent pricing. Avoid EORs that offer low initial costs but have hidden fees or ambiguous pricing. Clarify all potential charges to prevent unexpected expenses.
- Total cost of ownership. Focus on the overall value rather than just the lowest price. Sometimes, the cheapest option can lead to higher costs due to poor service or hidden issues.
Step 3: Employing and onboarding in Australia
Send the contract
Once you’ve selected a candidate, the next step is to create an employment contract that aligns with Australian labor laws. Provide the contract in English and any other relevant languages to ensure clarity for all parties.
An EOR can draft contracts that comply with Australian legal standards and are customized to your requirements in minutes.
Enhance compensation with competitive benefits
To attract top talent in Australia, you need to offer a robust benefits package. Rather than sourcing local benefits providers yourself, you can leverage the packages provided by your EOR. They can also handle the distribution of any necessary equipment to your new hires.
Get all your documentation in order
Onboarding includes collecting the new employee’s tax and banking details. An EOR can simplify this process, efficiently setting up payroll and minimizing paperwork.
With the support of an EOR, you can complete the onboarding process in as little as two weeks.
Step 4: Run payroll for employees based in Australia
Managing payroll for employees in Australia requires understanding local tax laws and mandatory contributions. Australia’s tax system is progressive, with rates reaching up to 45% depending on income levels.
Employers in Australia must also contribute to several statutory programs, including the Superannuation Guarantee (SG) and Medicare.
The SG is a retirement savings program where employers must contribute a percentage of each employee’s salary to their superannuation fund. This helps employees save for retirement and ensures financial security in their later years.
The Medicare system provides access to healthcare services and financial support for medical expenses. Employers are required to contribute to this system, which helps ensure employees receive necessary medical care.
An EOR can streamline payroll management by ensuring accurate and timely salary payments while handling all local taxes, contributions, and deductions.
With an integrated global payroll solution, you can manage payroll for your international team from a single platform, eliminating the need for multiple local providers.
Employ top talent in Australia through an EOR
Onboard, pay, and manage all your international employees
Employment regulations and laws in Australia
In Australia, employers must follow various regulations related to their workforce. These include managing working hours, overtime, mandatory benefits, and termination procedures.
The standard workweek in Australia is capped at 38 hours, with a maximum of 7.6 hours per day. Overtime must be compensated at between 1.5 to 2.5 times the regular hourly rate.
For a detailed overview of how these laws impact hiring and managing employees in Australia, refer to Multiplier’s guide on employment law in Australia.
Employee benefits and compensation
The minimum wage in Australia is set nationally and is currently around AUD 24.10 per hour, though it can vary depending on the industry and specific awards or agreements.
Australia, employee benefits are a crucial part of the overall compensation package. Australian labor laws stipulate several important benefits for employees.
Employees are entitled to a minimum of 4 weeks of paid annual leave per year, which can increase with longer service. They also receive 10 days of paid personal/carer’s leave annually, which can be used for illness or to care for a family member.
Employers are required to provide benefits such as contributions to Superannuation (SG) and paid leave entitlements.
Bonuses are not mandatory, but many companies include them as part of their compensation packages, often as performance bonuses or end-of-year bonuses.
For help navigating benefits, look to an EOR. Multiplier’s Global Benefits platform provides a range of benefits to meet the needs of your team in Australia.
Termination and offboarding procedures
In Australia, termination and offboarding procedures must adhere to local regulations regarding notice periods and severance pay. The standard notice period typically ranges from 1 to 4 weeks, depending on the employee’s length of service and the terms of their employment contract.
Severance pay, also known as redundancy pay, is required in certain situations, such as when an employee’s role is made redundant. The amount depends on the employee’s length of service and can vary according to the National Employment Standards (NES) and relevant Modern Awards or Enterprise Agreements.
Handling these procedures can be intricate, particularly for companies unfamiliar with Australian employment laws. An EOR, like Multiplier, can streamline the termination and offboarding process by managing all related tasks and ensuring compliance with local regulations.
Visa and work permit assistance
Hiring international employees in Australia requires obtaining the correct visas and work permits. The specific visa needed depends on the job role, employment duration, and the employee’s nationality.
Here are the main visa categories for working professionals in Australia:
- Temporary Skill Shortage (TSS) Visa (subclass 482). For foreign workers filling roles that require specific skills. This visa is typically granted for up to four years and can be extended.
- Skilled Employer Sponsored Regional (SESR) Visa (subclass 494). For skilled workers nominated by an Australian employer to work in regional areas. This visa is valid for up to five years and provides a pathway to permanent residency.
- Skilled Independent Visa (subclass 189). For skilled workers who are not sponsored by an employer but meet the criteria for skilled migration. This visa provides a pathway to permanent residency.
- Temporary Graduate Visa (subclass 485). For international students who have recently graduated and wish to stay temporarily while looking for work related to their qualifications.
- Working Holiday Visa (subclass 417 and 462). For young people from eligible countries who wish to travel and work in Australia for up to 12 months. This visa allows casual work and short-term employment.
For details about work permits in Australia, check out our guide.
Multiplier offers comprehensive support for work permits and visa management as part of its Employer of Record (EOR) services. For more details, visit our Global Immigration page.
Get started with Multiplier’s EOR services
Multiplier’s Employer of Record (EOR) services make it easy to expand your team in Australia.
With our EOR, you can recruit employees without the need to establish a local entity. We take care of all HR responsibilities, including compliant contracts, payroll, tax obligations, and local benefits.
You can concentrate on growing your business while we handle the compliance and administrative details.
Book a demo with Multiplier’s experts to discover how we can support your expansion into Australia.
