Hiring employees in Australia offers a remarkable opportunity to tap into a highly-skilled, multinational, diverse, and motivated English-speaking workforce. Global companies may rely on the multifaceted legal framework to hire in Australia.
Six states and two territories constitute Australia, each wielding a degree of legislative power. This division also provides flexibility and certainty to employers and their employees, with each state and territory having its own set of employment rules over and above federal law.
Australian labor laws also share a heritage with the Commonwealth of Nations and the International Labor Organization standards. Therefore, a keen understanding of statutory employer obligations, compliance risks, and recent hiring trends will help companies confidently hire employees in Australia.
Australian Labor Laws
A combination of federal and state-based laws, including modern awards, enterprise agreements, and statutory minimums, collectively establishes conditions to hire in Australia. Together, they provide a framework for setting minimum employment standards, such as working hours, minimum wages, leave entitlements, payroll taxes, and termination.
Working hours in Australia
- The National Employment Standards (NES) prescribes a maximum working week of 38 hours.
- However, employers can extend working hours in Australia beyond the prescribed limit upon prior consent from employees.
Special Provision Pay
- Special provisions for shift work during unsociable hours mandate additional pay rates of
- 15% for the afternoon shift
- 30% for the night shift
Employers in Australia must acknowledge statutory employee benefits concerning termination of employment contracts, including
- A minimum statutory notice period is between one and four weeks.
- Additional one-week notice for employees over 45 years of age, and who completed at least two years of service.
- Employees with a valid medical condition and absent for less than three consecutive months may not be dismissed.
- Employees can not be dismissed for unlawful reasons.
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Payroll and Taxes in Australia
Payroll in Australia involves calculating and paying employee salaries and wages alongside deducting taxes and other contributions. Several laws and regulations, including the Fair Work Act 2009, the Income Tax Assessment Act 1997, and the Superannuation Guarantee (Administration) Act 1992, govern employer payroll obligations in Australia.
Minimum wage in Australia:
- Employers may take into account the employee base salary, overtime, bonuses, and other allowances.
- The statutory minimum wage in Australia is $882.80 per 38-hour week ($23.23 per hour) before taxes.
Taxes and other contributions:
- Payroll frequency in Australia can be monthly, bi-weekly, or bi-monthly. You can pay salaries through direct deposit, cheque, or cash.
Employee Benefits in Australia
Employers must observe seven national paid public holidays alongside paid public holidays in the state and territories of operation. The national public holidays are as follows:
- New Year's Day (January 1st)
- Australia Day (January 26th)
- Good Friday
- Easter Monday
- Anzac Day (April 25th)
- Monarchy’s Birthday
- Christmas Day (December 25th)
Each state and territory in Australia may have its additional public holidays, including:
- Labor Day: Celebrated in different states on different dates
- Queensland Day: Celebrated in Queensland to mark the state's founding.
- Melbourne Cup Day: A public holiday in Victoria, celebrated on the first Tuesday of November to coincide with the Melbourne Cup horse race.
- Picnic Day: Celebrated in the Northern Territory.
- Bank Holiday: Observed in New South Wales and the Australian Capital Territory.
Leave policy in Australia
Employers must pass on the following statutory benefits in Australia to their employees:
Sick and Carer’s leave:
Paid annual leave:
- Employers shall offer their full-time employees at least four weeks of paid annual leave.
- Employers may also pay a lump sum vacation bonus.
- Modern awards often include a 17.5% pay bonus, but enterprise agreements can offer more. Employees may also cash out leave entitlements in specific circumstances, like termination or mutual agreement.
Cost of Hiring an Employee in Australia
The choice between registering a local entity and using an employer-of-record (EOR) in Australia to hire talents depends on your long-term business objectives, resources, and risk tolerance. Let’s simplify your decision and compare the cost of hiring in Australia through establishing a subsidiary versus an EOR solution like Skuad.
Establishing a Subsidiary vs. Employer of Record (EOR) in Australia
Top Job Listing Sites in Australia
The top job listing sites in Australia for employers to post jobs are:
These sites are popular with job seekers in Australia, so posting your jobs on these sites will give you a good chance of reaching a large pool of qualified candidates.
In addition to these general job listing sites, there are several industry-specific job boards in Australia where employers can post jobs. For example, EthicalJobs focuses on ethical and sustainable sector jobs, while MiningLink Jobs specializes in mining industry jobs.
Compliance Risks of Hiring Employees in Australia
Hiring in Australia carries several compliance risks that employers must be aware of and manage effectively to avoid legal issues and financial penalties.
- Employment Contracts and Workplace Policies: Compliance risks arise if employment contracts do not align with Australian labor laws. It can result in disputes and legal action, particularly in termination, notice periods, and unfair treatment.
- Visa and Work Authorization: Employers must navigate complex work permits and work visa authorization requirements if hiring non-Australian citizens or non-permanent residents.
- Payroll and Taxation Compliance: Employers must accurately calculate and withhold taxes from employee wages, make superannuation contributions to retirement savings accounts, and comply with the Goods and Services Tax (GST) where applicable. Errors in payroll and taxation can result in legal disputes with the Australian Taxation Office.
- Record-Keeping and Reporting: Employers must maintain accurate and complete records related to payroll, taxation, and employment conditions for at least five years. Compliance risks include inadequate record-keeping practices, which can result in difficulties during audits and legal disputes.
- Fair Work Commission Disputes: Employees can dispute employment-related matters through the Fair Work Commission. Employers must manage these disputes effectively and in compliance with applicable laws to mitigate the risk of legal action.
How to Hire in Australia
You may hire employees in Australia or outsource your onboarding and employee management needs. Here are the most preferred options for hiring and expanding business operations Down Under
Option 1: Establish a Subsidiary
Setting up a subsidiary in Australia gives control over operations and hiring. It invariably allows you to maintain long-term employment relationships and retain the best talents in the industry.
To hire in Australia, you must create a legal framework that includes employment contracts and payroll obligations adhering to Australian labor laws.
However, setting up a local entity involves careful legal, financial, and administrative considerations. Moreover, the parent company is liable to manage compliance risks.
Option 2: Hire as a Contractor
Australian labor laws allow companies to engage professionals on a contractual basis. Companies can now adjust their workforce to project needs.
To hire contractors in Australia, you must ensure the negotiated contractual arrangements reflect the nature of the employment relationship.
However, hiring in Australia on a contractual basis will give companies less control over day-to-day employee activities.
Option 3: Use EOR Solutions
Most companies are embracing EOR solutions to offset the high cost of hiring in Australia. EOR solutions can be convenient and efficient in hiring and managing employees in Australia without establishing a subsidiary.
EOR companies like Skuad act as the legal employer for your employees, handling payroll, compliance, and administrative tasks. It is particularly beneficial if you want to test the market before committing to setting up a full subsidiary.
Recent Hiring Trends in Australia in 2024
The Australian market showcases signs of rapid growth in industries like healthcare, technology, digital growth sectors, construction, property, and engineering. But skill shortages in these sectors are a persistent challenge here.
Employers are looking to embrace diversity, not just in demography but across thoughts and skills that will overcome these challenges. Therefore, businesses are not just looking to fill immediate job openings but evaluating the impact of AI on job roles and prioritizing digital transformation.
Furthermore, Australia is an employment market where candidates are less inclined to switch roles. Naturally, a strong employer value proposition through higher compensation, work-life balance, career stability, development, location, and respect is crucial to retaining top talents.
Hiring in Australia is Simpler with Skuad
Australia's division into states and territories introduces complexity to employment practices. Instead of allocating your precious resources to this undertaking, it's important to direct your attention toward growth-driving areas.
Skuad presents an efficient hiring and onboarding solution, greatly simplifying your business expansion efforts in Australia. Skuad effortlessly can hire, onboard, pay and manage your Australian workforce - full-time employees or global contractors.
Book a demo today!
How to hire employees in Australia?
To hire employees in Australia effectively, consider the following key steps:
- Identify your staffing needs.
- Understand Australian employment laws and obligations.
- Decide whether to hire directly or use an Employer of Record in Australia
Hiring directly involves managing recruitment, employment contracts, and legal compliance yourself, offering more control over the selection process. Alternatively, using an Employer of Record (EOR) can simplify this by handling legal and administrative aspects of Australia employment for you, ideal for companies without a local presence. This choice affects how you navigate hiring in Australia, balancing control with convenience.
- Prepare compliant employment contracts.
- Set up payroll and benefits in accordance with Australian standards.
These steps provide a framework for how to hire employees in Australia, ensuring compliance with Australia employment regulations and a successful hiring process.
How much does it cost to hire an employee in Australia?
The hiring cost in Australia varies depending upon the hiring process a company opts to follow. In addition, employers also need to take care of employee benefits, payroll, minimum wage, and other costs once hired.
Can I hire employees in Australia as a US company?
Yes, you can hire employees in Australia as a US-based company. Registering a local entity and complying with applicable labor laws to hire in Australia is important. A better cost-effective alternative to hiring and managing employees in Australia is choosing EOR solutions like Skuad.