How to hire employees in Australia through an employer of record (EOR) [2024]

Step #2: How to choose the best EOR for your business

Several EORs on the market—including Deel, Papaya Global, and Rippling—can help hire, pay, and manage Australian employees. Before you choose a platform, you should consider the services you will need, and how much you plan to grow your global hiring presence.

Most EOR platforms are not HRIS's (human resource information systems). They were built with the express purpose to hire and pay people internationally. They aggregate local payroll providers in every country and manually transmit your payroll files to them. This approach comes with many limitations.

All-in-one global HR platforms, like Rippling, allow you to hire, pay, and manage employees and contractors worldwide. They are also “payroll processors,” which means they process your payroll, transmit funds, and calculate and file taxes in every country through their own software. This allows you to manage and automate the entire employee journey in one place, all around the world.

Normally, setting up a corporate entity abroad is a long, expensive process. But through Rippling EOR’s entities, you can start hiring and working with people abroad quickly and compliantly.

Step #3: How to hire and onboard your Australian employees

Once you’ve picked an EOR that works in Australia, you can begin the onboarding process by collecting the following information from your new employees:

• Name (matching the account where you’ll deposit their pay).
• Date of birth and date of hire.
• Contact information, including their mailing address in Australia.
• Bank account information.
• Amount to be paid in Australian dollars (including any bonuses).
• Completed Tax File Number (TFN) declaration forms, which every employee needs to fill out to determine withholdings.

Next, you need to send out an employment agreement that outlines key working conditions. An EOR can automatically localize and distribute employment agreements. Every Australian hire will have a legally compliant contract offering statutory requirements for probationary periods, working hours, national minimum wage, modern award coverage, benefits, and termination policies like severance pay and notice periods.

Rippling EOR automatically flags non-compliant sick leave policies and tells you how to fix them. If you'd like to give your employees more leave to match policies in other countries, you can do that too.

Step #4: Run payroll

For the A-to-Z on global payroll, read our comprehensive guide to running international payroll for employees in Australia.

Once you’ve collected a new hire’s information and both parties have signed employment agreements, an EOR will pay your Australian employees in AUD, while withholding legally required taxes from salaries. This includes contributions to:

• Superannuation funds
• Employee taxes
• Healthcare (if applicable)
• Payroll taxes
• Workers’ compensation insurance

Keep in mind many EOR companies are payroll aggregators, meaning they pay employees via third-party vendors. This makes for slower processing times and headaches when it comes to managing international employees under the same system.

Rippling EOR, by contrast, simplifies global employment by using native payroll software to send funds and handle taxes, allowing you to pay Australian employees alongside your local workforce—all within a single pay run.

Below is a preview of how Rippling’s one-click global payroll system works:

Frequently asked questions about hiring through an EOR in Australia

How much does an EOR cost?

EORs typically use one of two pricing structures:

• Fixed monthly fee per employee
• Percentage of payroll plus applicable taxes

Both methods can also come with various administrative fees, onboarding charges, and other costs for supplemental features.

Keep in mind that you don’t need to use an EOR for your entire workforce. If you want to segment its use, you’ll only be charged for the employees you employ through the EOR.

What is the difference between an EOR and PEO?

A Professional Employer Organization (PEO) co-employs a company’s workforce and provides administrative services like paying employees, handling compliance, and filing payroll taxes. The company and PEO are jointly responsible for the workforce. A PEO does not, however, allow you to hire in other countries where you haven’t set up a local entity.

Does an EOR protect your sensitive and confidential information?

While outsourcing your payroll management to an EOR can spare you time and compliance risk, sharing your data with companies who use third-party vendors leaves you exposed to data breaches from manual uploads.

You should seek out EORs that prioritize data protection, including:

• Compliance with industry-standard privacy regulations in different countries
• Secure infrastructure with around-the-clock maintenance
• Carefully vetted personnel

You can also establish a Data Processing Agreement (DPA) with a payroll service that mandates sound privacy practices and provides legal protection.

Does an EOR help with Australian tax filings?

An EOR can automatically calculate and file your taxes in Australia. Rippling, for instance, is an authorized payroll provider by the ATO. On your company’s behalf, it can distribute and submit forms that outline withholdings for:

• Income taxes
• Payroll taxes
• Superannuation
• Fringe benefits taxes
• Medicare levies

What are the mandatory benefits for Australian employees?

Australia’s Fair Work Act of 2009 set forth the National Employment Standards (NES) that set minimum working conditions for Australian employees. Statutory benefits include:

• Pension (known in Australia as superannuation)
• 20 days paid annual leave
• Personal leave (for sick and carers leave)
• Family and Domestic Violence Leave (confidential leave type)
• Unpaid parental leave (including paternity and maternity leave)
• Compassionate Leave
• Community Services Leave (Emergency Services and Jury Duty)
• Long service leave
• Medicare (Australia’s public health insurance system)
• Public holidays
• Workers’ compensation

While these benefits are mandatory for all Australian employees, exact pay rates and conditions will vary depending on the worker’s “Modern Award,” which sets different requirements depending on the industry and job category.

An EOR, on the other hand, is the sole legal employer of the portion of your workforce you use it for, assuming all the associated liabilities. An EOR allows companies to work with employees in other countries without setting up a legal entity.

What are the employer costs for full-time employees in Australia?

Employers are responsible for deducting the following from their full-time and part time employees’ paychecks. Along with super guarantees and workers’ compensation premiums, payroll taxes apply to companies exceeding a certain wage threshold. Find the details below:

For more information on mandatory employee benefits in Australia, read our complete guide.

Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.