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Introduction
Employment in Australia will reach close to 14 million people suggesting a potential increase in job opportunities across various sectors, the rise of distributed work allows businesses to access a global talent pool.
Moreover, you must comply with complex regulations to build successful teams in today's distributed work environment.
Before you hire in Australia, here are some key details you must know:
The official currency of Australia is the Australian Dollar (AUD, A$).
Australia's official language is English, and people conduct all educational and employment work in English.
Working hours in Australia are 33 hours per week.
The current national minimum wage in Australia is $23.23 per hour (before tax).
Whether you're a seasoned entrepreneur or starting your global expansion, this guide will empower you with the knowledge of how to hire in Australia and unlock your business's full potential.
Instantly check the data-backed global salary insights
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 JobSearch, 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 remote staff and other 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.
Feature
EOR
AOR
Legal Employer
Yes
No
Payroll & Tax Responsibility
Yes
No
Compliance Management
Yes
Limited (contractor classification, some tax forms)
Suitable for
Hiring employees, complete control over the workforce
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. (Try out Skuad’s salary insights tool for more information)
Superannuation: Employers must contribute a minimum percentage (currently 11%) 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:
Expense
Setting up a local entity
EOR
AOR
Registration & Compliance Fees
High (includes entity registration, licenses, ongoing)
Medium (EOR fees for services)
Low (AOR fees typically lower than EOR)
Payroll Processing
High (in-house payroll processing costs or software)
Included in the EOR fee
Not included (you manage contractor payments)
Tax Withholding & Remittance
High (in-house responsibility or outsourcing to an accountant)
Included in the EOR fee
Not included (you manage contractor taxes)
Superannuation Contributions
High (employer responsibility)
Included in the EOR fee
Not included (you manage contractor contributions)
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 meal breaks.
Workplace Health and Safety Act 2011 and other anti-discrimination legislationprescribe employer obligations for a safe work environment.
Superannuation Guarantee (Choice of Superannuation Funds) Act 2005: Enforces employer contributions to employee retirement funds.
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:
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.
In 2023, the Australian labor law underwent major changes. It includes changes in the multi-employer bargaining and Fair Work Act (fixed term and minimum term contracts). Understanding and complying with the latest legislation is crucial for attracting and retaining top talent.
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 payroll taxes for statutory contributions towards your employees’ pension fund and Medicare.
Moreover, the Single Touch Payroll (STP) in Australia mandates real-time reporting of payroll data.
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.
Retaining top talent
Australia ranks eighth 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.
Fortunately, Skuad can be your one-stop solution for hiring compliance in Australia.
We can handle the administrative burdens while you focus on attracting and retaining the best talent for your business.
Hire in Australia with Skuad
You can delegate administrative tasks and compliance requirements to Skuad and simplify your hiring process.
Skuad's EOR and AOR solutions empower you to build a globally distributed team. They ensure compliance with local employment laws in over 160 countries without establishing a local entity in each location.
Contact Skuad today to see how we can simplify your global hiring journey in Australia.
One platform to grow your global team
Hire and pay talent globally, the hassle-free way with Skuad
A1. Hiring costs in Australia typically include administrative costs for advertising and selecting the right candidate, as well as compliance costs for payroll and extending employee benefits. For cost-effective and compliant hiring, you may switch to EOR/AOR solutions.
Q2. How do I employ someone in Australia?
A2. You can employ someone in Australia with an action plan, prioritizing choosing between setting up a local entity or using an EOR/AORand ensuring employment law compliance with payroll, tax withholdings, workplace safety regulations, etc.
Q3. What is the minimum wage in Australia?
A3. The minimum wage in Australia for employees in a 38-hour work week is $23.23 per hour or $882 per week (as of July 1, 2023).
Q4. What is the penalty for employing illegal workers in Australia?
A4. Foreign nationals without proper visa authorization are typically considered illegal workers in Australia. Companies could be fined up to $630,000 per illegal worker or imprisonment of up to five years, whereas individuals may face a fine of up to $126,000.
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