Hire in Australia: A Comprehensive Guide for 2026

Introduction

Hiring employees in Australia means working within the Fair Work Act 2009, which sets the National Employment Standards and requires a superannuation guarantee at 12% of earnings.

Foreign companies without a local presence must employ through a registered entity, an employer of record (EOR) that holds the legal employment relationship, or an agent of record (AOR) for contractors.

Registering a local entity with the Australian Securities and Investments Commission and an Australian Business Number can take weeks, and payroll tax must then be registered separately in every state where you have staff. Hiring contractors looks simpler, but recent reforms have redefined casual employment, so a contractor can be reclassified as an employee, leaving you liable for back pay and penalties.

In this guide, we cover the three ways to hire employees in Australia, what each option costs, the employment laws that apply, and the challenges to plan for.

How to hire in Australia?

Building your global team in Australia requires navigating the hiring process effectively. Here are some of the best ways to find the right fit:

• Popular online job boards like Workforce Australia, Seek, and CareerOne allow you to reach a broad pool of Australian candidates.
• Consider working with recruitment agencies specializing in your industry for targeted searches and expertise.
• Industry events and conferences are another potential resource to find management-level candidates.

Further, consider one of the three most common ways to hire employees in Australia.

The best model for you depends on factors like your budget, resource availability, and future growth plans:

• The local entity is ideal for long-term commitment and control.
• Employer of Record (EOR) simplifies compliance and is an excellent option for hiring employees in Australia.
• Agent of Record (AOR) suits scenarios where you need to hire contractors in Australia.

How to hire employees by setting up a local entity?

Establishing a local subsidiary to hire in Australia offers complete control over the recruitment process but involves legal and administrative complexities.

You can start by choosing among common business structures:

• Sole Trader: One person owns and operates the business
• Company: A separate legal entity from the owner
• Partnership: Two or more people share ownership and profits of the business

Subsequently, you can register your business name with the Australian Securities and Investments Commission (ASIC) and obtain an Australian Business Number (ABN) for tax registration.

However, if establishing a local entity isn't ideal, hire an employer of record in Australia or an agent of record like Skuad.

How to hire employees via EOR?

An Employer of Record (EOR) acts as a legal employer on your behalf when hiring an employee in Australia. The EOR assumes the legal responsibility of an employer in Australia so that:

• You can offload administrative tasks like new employee onboarding, managing payroll, and handling employee benefits.
• You can minimize compliance risks during tax withholding requirements and employee classification.

How to hire contractors through AOR?

An AOR (Agent of Record) acts as an intermediary between you and your independent contractors in Australia.

Unlike an EOR (Employer of Record) that becomes the legal employer, an AOR focuses on ensuring proper classification and legal compliance for hiring independent contractors.

AORs guide contractor agreements, tax forms, and other compliance aspects and are generally less expensive than EOR solutions.

Whether you hire full-time employees or contractors in Australia, getting the legal structure wrong carries real cost, from misclassification penalties to state payroll tax exposure.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire in Australia without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable pension and insurance obligations
• Supports payroll processing in 70+ currencies with automated tax withholding and reconciliation
• Helps administer statutory benefits and leave entitlements in line with local requirements

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing in local currency
• Helps flag classification risk before it becomes a compliance issue
• Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
• Helps manage contractor records and payment history from a single dashboard

Customer story: How OpenSolar scaled its global team with Skuad

OpenSolar, a solar design and sales platform headquartered in Sydney, needed to hire skilled professionals across multiple countries without setting up local entities in each one. Skuad supported compliant onboarding and payroll for the company's international workforce. OpenSolar onboarded 40 team members across the Philippines, Italy, and Portugal, with payments processed accurately in local currencies.

"Skuad, a Payoneer company, has been a key partner in our international expansion. Their seamless onboarding process and compliance expertise have allowed us to focus on our core mission, which is to accelerate the world's transition from fossil fuels to solar energy."

- Lavinia Davison, Global Head of Talent & Operations, OpenSolar

Read the full case study

How much does it cost to hire in Australia?

You must incur the following expenses to hire in Australia:

• Recruitment costs: Expenses associated with advertising jobs, screening resumes, and conducting interviews.
• Onboarding costs: Costs related to training new hires, providing necessary equipment, and administrative tasks.
• Payroll: This includes the base salary offered to the employee before taxes and deductions. Some Australian states may also levy payroll taxes on employers.
• Superannuation: Employers must contribute a minimum percentage, currently 12%, of an employee's pre-tax salary towards their superannuation (pension) fund.
• Employee benefits: Offering benefits like paid leave for vacation, sick leave, health insurance, professional development opportunities, and ensuring workplace safety add to the overall cost.

The table summarizes the cost of hiring in Australia using three different models:

Between recruitment, onboarding, superannuation, and state payroll taxes, the true cost of hiring in Australia is rarely the number on an offer letter.

Skuad helps you model these costs upfront with its employee cost calculator, so budgeting for an Australian hire doesn't rely on guesswork.

• Estimates total employer cost including statutory contributions and payroll taxes across supported markets
• Breaks down base salary against mandatory employer-side costs before an offer is extended
• Supports comparison of hiring costs across countries when evaluating where to build a team
• Updates estimates as statutory rates change, so budgets stay current

Running the numbers before you extend an offer helps avoid surprises once payroll starts.

Estimate the true cost of hiring in Australia

What employment laws apply when you hire in Australia?

A mix of federal and state legislation governs Australian employment law. You must comply with the following employment laws to successfully hire in Australia:

• Fair Work Act 2009: You can follow the provisions laid under this law to set minimum wage, hours of work, notice periods, and termination policy.
• National Employment Standards (NES): You can follow the provisions of this law, which outline annual leave, personal leave, and public holidays.
• Work Health and Safety Act 2011 and other anti-discrimination legislation prescribe employer obligations for a safe work environment.
• Superannuation Guarantee (Administration) Act 1992: Enforces employer contributions to employee retirement funds and sets out choice-of-fund requirements.
• ‍Misc. state-based legislation: For specific industries or employment rights in each state/territory.

Challenges of Hiring in Australia

You must understand the following challenges and implement effective strategies to hire in Australia and build a successful team: 

1. Changing employment laws

Complying with Australian labor law is a must when hiring in the country. However, the evolving landscape of the Australian workplace regulations makes it challenging for employers like you to keep up with it. 

Australian labor law has undergone major changes through the Closing Loopholes Acts, including a redefined test for casual employment, same job same pay protections for labour hire workers, and the right to disconnect outside working hours. Understanding and complying with the latest legislation is crucial for attracting and retaining top talent.

2. Compliance with payroll and taxes

Payroll considerations are complex yet essential to hire in Australia and mandates: 

• You keep accurate records of working hours, leave entitlements, and absences for payroll processing.
• You withhold taxes from employee salaries, adding to your administrative burden of timely submissions to the Australian Taxation Office (ATO).

Consider other statutory obligations, including superannuation guarantee contributions to your employees' pension fund and state-based payroll tax. The Medicare levy, by contrast, is withheld from the employee's own pay through PAYG rather than paid separately by employers.

Moreover, Single Touch Payroll (STP) mandates real-time reporting of payroll data, and from 1 July 2026, Payday Super requires employers to pay superannuation guarantee contributions on the same day as wages, rather than quarterly.

You must also ensure employee data privacy regulations during the payroll process. Here is a detailed guide on payroll in Australia for better understanding. 

Maintaining a compliant payroll system can be a big challenge. 

While most businesses hire contractors in Australia to avoid payroll obligations, independent contractors may not be suitable for job roles requiring long-term commitment or management positions. 

3. Retaining top talent

Australia ranks 10th globally in talent competitiveness. Even so, retaining top talent is challenging because:

• Significant skills gaps for in-demand roles like STEM occupations, healthcare, and trades make it challenging to hire in Australia. 
• You can hire remote staff in Australia, but it necessitates adapting recruitment strategies to avoid moonlighting issues. 

Hire in Australia without setting up an entity

Hiring in Australia comes with real operational weight: choosing between entity setup and an EOR, staying aligned with the Fair Work Act, managing superannuation, and navigating payroll taxes that vary by state.

Skuad supports the operational complexity of hiring in Australia, employment contracts, superannuation and payroll tax handling, Fair Work Act compliance, and contractor classification, so your team can focus on the work, not the paperwork.

Companies across SaaS, technology, and professional services use Skuad to build teams in Australia without setting up a local entity first.

Book a demo to see how Skuad supports hiring in Australia

FAQs

1. How do I hire employees in Australia?

Foreign companies can typically hire in Australia by registering a local entity with the Australian Securities and Investments Commission, engaging an employer of record to act as legal employer, or using an agent of record for contractor arrangements under the Fair Work Act.

2. What is the minimum wage in Australia?

The minimum wage in Australia typically applies to a 38-hour work week, currently set at $26.44 per hour, or around $1,004.90 per week before tax, effective from 1 July 2026. Specific industries may have higher minimum rates under applicable modern awards set by the Fair Work Commission.

3. Can a foreign company hire employees in Australia without a local entity?

Foreign companies can typically hire employees in Australia through an employer of record without registering a local entity or obtaining an Australian Business Number. The EOR becomes the legal employer, handling payroll, superannuation contributions, and compliance with the Fair Work Act on the company's behalf.

4. What are the penalties for hiring foreign workers illegally in Australia?

Employers found allowing an unlawful non-citizen to work in Australia can typically face civil penalties of up to $396,000 per worker for a company, or criminal penalties of up to $594,000 and two years' imprisonment. Aggravated cases involving worker exploitation can reach $1,485,000 and five years' imprisonment.

5. What is the difference between an EOR and an AOR in Australia?

An EOR typically becomes the legal employer, managing payroll, superannuation, and Fair Work Act compliance for full-time staff, while an AOR generally supports contractor classification and agreements without taking on employer status. The right choice usually depends on the type of workforce being hired.

6. What benefits are employers required to provide in Australia?

Employers in Australia are generally required to provide paid annual leave, personal or sick leave, superannuation contributions, and a safe workplace under the National Employment Standards. Additional entitlements, such as higher leave loading or allowances, can apply depending on the relevant modern award or enterprise agreement.