Global HIRING & employment
Hire employees in Australia in 90 seconds
Normally, setting up a corporate entity abroad is a long, expensive process. But through Rippling’s EOR entities, you can start hiring and working with people abroad quickly and compliantly.
Currency
Australian dollar (AUD)
Language
English
Time Zones
Australian Eastern Standard Time (AEST)
and
2 additional
3 Time Zones
Australian Eastern Standard Time (AEST), UTC+10:00
Australian Central Standard Time (ACST), UTC+9:30
Australian Western Standard Time (AWST), UTC+8:00
1. Hiring in Australia
Onboarding in Australia usually takes a day or more. Contracts must be in writing and signed by both parties, and employers should provide new employees with a Fair Work Information Statement that outlines their required working conditions. Rippling EOR takes the guesswork out of contracts by providing locally reviewed employment agreements.
Common hiring mistakes to avoid
1. Forgoing legal advice.
Getting legal advice before hiring, managing, or terminating employees can save significant costs. Employers should ensure they set up adequate protections to limit exposure to claims under Australian laws, which are largely pro-worker.
2. Failing to conduct an audit.
Audits ensure all contracts are legally compliant and remain up-to-date when employees change positions.
3. Violating the law when managing, disciplining, or terminating employees.
Due to strict unfair dismissal laws, it is vital for companies to have legally compliant policies covering performance management, discipline, and termination. Managers and supervisors must follow these policies and provide employees with a procedurally fair process.
4. Adopting a one-size-fits-all employment approach.
Contractual terms that are reasonable for a company’s CEO are unlikely to be reasonable for a company’s receptionist or mail clerk. In Australia, conducting a Fair Work audit helps determine which laws apply to each category of worker that a company may employ. It's vital to classify workers accurately, while providing them with the correct entitlements under any applicable laws.
5. Not implementing equal opportunity and workplace safety policies.
Employers will find it difficult to defend employee claims of discrimination, harassment, victimization, or bullying if they have not taken “reasonable” steps to protect the employee. This includes implementing relevant policies and conducting regular training on equal opportunity matters.
2. Benefits
Mandatory benefits
- Super guarantee. Australia's pension program, known as superannuation, requires employers to make a minimum 10.5% contribution (as of 2022) of each worker's salary into their retirement accounts. This "super guarantee" rate will increase by 0.5% each year until it reaches 12% in 2025. Employees are also encouraged to make their own voluntary contributions.
- Paid time off. This includes holidays, sick leave, parental leave, compassionate (or bereavement) leave and family and domestic violence leave.
- Medicare. Australia has a single-payer public healthcare system that offers free or low-cost services to all Australian citizens and permanent residents. Some employers offer private health insurance benefits to employees seeking extra coverage and lower premiums.
3. Pay
Rippling EOR ensures you’re compliant with minimum wage requirements federally and across Australia.
See Rippling
Minimum wage
Australia's national hourly minimum wage for employees aged 21 and older is $21.38 (2022). Casual employees, who often work irregular hours and don't receive the same benefits as permanent workers, get an additional 25% as compensation for not having entitlement to personal and vacation leave. In addition, if an employee is covered by a Modern Award, their minimum wage is specified in that award and is typically dependent on their particular job level and job type.
Age of employee
Hourly minimum wage ($)
21 and above
21.38
20
20.90
19
17.65
18
14.61
17
12.37
16
10.11
< 16
7.87
Overtime
A full-time Australian employee's work week is 38 hours plus reasonable additional hours. Overtime rates, as well as when they apply, vary across industries depending on which Modern Award applies. Australia has a Pay and Conditions Tool that calculates the unique overtime rates for all of its job categories. Some Modern Awards allow workers to receive paid time off instead of overtime pay.
Working week
Monday—Friday
Payroll frequency
Employees are paid weekly or biweekly, but they can be paid monthly if this is specifically agreed by contract.
4. Terminations
Requirements
Employers can't terminate someone until they give the employee advance written notice of their last day on the job. The minimum notice period varies depending on an employee's length of continuous service. Employers can pay terminated employees out through their notice period in lieu of letting them work until their last day.
Employment period
Minimum notice period
1 year or less
1 week
1 year to 3 years
2 weeks
3 years to 5 years
3 weeks
5 years and above
4 weeks
Severance
Employees who are laid off due to factors outside of their performance (e.g. if the job no longer needs to be done by anyone, or if an employer becomes insolvent) are often eligible for redundancy pay. This is typically equal to an employee's base rate of pay and lasts according to their length of continuous service.
Employment period
Redundancy pay
1 year to 2 years
4 weeks
2 years to 3 years
6 weeks
3 years to 4 years
7 weeks
4 years to 5 years
8 weeks
5 years to 6 years
10 weeks
6 years to 7 years
11 weeks
7 years to 8 years
13 weeks
8 years to 9 years
14 weeks
9 years to 10 years
16 weeks
10 years and above
12 weeks
5. Time Off
Rippling EOR automatically flags non-compliant sick leave policies and tells you how to fix it. If you'd like to give your employees more leave to match policies in other countries, you can do that too.
See Rippling
Sick leave
Also known as personal or carer's leave, Australian employees are entitled to paid sick leave equal to 1/26 of their normal annual work hours. For full-time employees (working 38 hours a week) this adds up to 10 days a year. Sick leave is prorated for part-time employees. Employee contracts may stipulate different policies, but they can't allocate any less leave than these minimum requirements.
Parental leave
Employees who, regardless of gender, are the primary carers of newborn or adopted children are entitled to up to 18 weeks of parental leave, paid at the national minimum wage (currently $812.60 a week) provided they meet certain conditions, including an income test. The employer does not bear the costs: this is a government-managed entitlement, where the employer's role is to administer the funds.
There are 2 phases: first, there's one continuous 12-week window within a year of a child's birth or adoption. Second, there's a flexible period that allows up to 30 extra days of paid leave, with a schedule negotiated between employer and employee. For instance, after the 12-week period, a new mother could arrange to only work 2 days a week until the allotted 30 flexible days expire.
Regardless of the employee’s income, their employer is obliged to offer 12 months of unpaid leave, provided the employee has taken 12 months' service. However, most businesses also offer paid parental leave as an additional benefit.
Dad and partner pay
Working fathers (biological or adoptive) and partners of a new child's primary carer (including same-sex partners) get 2 weeks paid leave at the national minimum wage, provided they meet certain conditions, including an income test.
Paid Time Off
Vacation. Full-time employees get 4 weeks of "holiday pay" for every year they work. Meanwhile, part-time employees get a pro rata amount of the full-time entitlement to 4 weeks’ paid annual leave per year. They can take the paid time off as soon as they accumulate it.
Compassionate leave. Employees get up to 2 days of paid leave if an immediate family member dies or becomes severely ill.
Jury duty. Employers owe "make-up pay" for the first 10 days of an employee's jury duty. This rate is the difference between jury duty payments and their base rate of normal pay.
6. Employer Costs
Cost to Employers
Tax
Income Tax
0%
Super guarantee rate
10.50%
Worker's Comp (ESTIMATE)
2.33%
State Payroll Taxes
6.85%
7. Employee Taxes
In addition to a 2% Medicare levy, Australian residents are taxed at different rates according to their income threshold.
Income ($)
Tax
0 to 18,200
0
18,201 to 45,000
19 cents for each $1 over $18,200
45,001 to 120,000
$5,092 plus 32.5 cents for each dollar over $45,000
120,001 to 180,000
$29,467 plus 37 cents for each dollar over $120,000
180,001 and above
$51,667 plus 45 cents for each dollar over $180,000
8. Holidays
Australia has eight national public holidays: New Year's Day, Australia Day, Good Friday, Easter Monday, Queen’s/King’s Birthday, Anzac Day, Christmas, and Boxing Day.
9. Contractor Classification
The key features that are considered most relevant in the contract in determining whether an individual is an employee or contractor are as follows.
How to ensure contractors are properly classified as such. (And avoid fees, taxes, and fines.)
Contract
An employer-employee relationship arises when there is a contract of employment, whereas a contract for services describes the relationship between a contractor and their client.
Contracting Party
A contractor can work for themselves as an individual (they may have their own registered business), they could be engaged via a separate corporate entity, usually an agency or labor hire firm.
Control
Contractors have more autonomy over where, when, and how they work, whereas Australian employees work under the control of an employer. Contractors bear the financial liability and risk of their work.
Ability to subcontract work
Contractors can delegate or subcontract work to be performed by other people or businesses, whereas employees cannot.
Employee entitlements
Contractors are not covered by National Employment Standards, and are therefore not entitled to employee benefits such as sick leave, holiday pay, or parental leave unless these are provided for in the contract.
Independent contractors don't have a minimum wage. They negotiate payment as part of their contract and submit invoices when they need to be paid, or utilize a time and attendance system to record their hours and be paid directly—if their contract agreement defines a number of hours each week.
Contractors must pay their own taxes and generally make their own superannuation contributions. There are exceptions to this, such as when a contractor is hired wholly or principally for labor. Employers must take care in determining the engagement terms of a contractor.
Exclusivity of service
Generally, employees perform services exclusively for the employer, whereas contractors can provide their services to other businesses—unless they sign an exclusivity clause.
Disciplinary Action
Sham arrangements can occur if an employer tells a worker they're an independent contractor, when they're actually an employee. This is prohibited under Australia's Fair Work Act. Courts can impose up to $13,320 in fines for individuals guilty of sham contracting, and up to $66,600 for corporations.
Duration
While employees are expected to work on an ongoing basis, contractor commitments generally span from project to project, with no expectation of work continuing after one assignment is completed. There is no limit to how long employers can work with the same contractor.
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.