Guide to employment, payroll and benefits in

Australia

Rivermate offers complete payroll, benefits and compliance services for

Australia

01. Overview

Last updated: 

August 19, 2021

Currency
Australian Dollar
Capital
Canberra
Ease of doing business
81.2
Language
English
Population
25499884
GDP growth
1.96%

02. Grow your team in

Australia

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Australia

, particularly if you don't have established local relationships. You can hire employees in

Australia

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Australia, formally the Commonwealth of Australia, is a sovereign country that encompasses the Australian continent's mainland, Tasmania's island, and a number of smaller islands. It is Oceania's largest nation and the world's sixth largest by total area. It has a population of nearly 26 million people who live in densely populated areas along the eastern seaboard. Canberra is Australia's capital, and Sydney is its largest city. Melbourne, Brisbane, Perth, and Adelaide are the country's other major cities. Indigenous Australians had lived on the continent for around 65,000 years until Dutch explorers called it New Holland in the early 17th century. Great Britain claimed Australia's eastern half in 1770 and settled it by penal transportation to the colony of New South Wales beginning on January 26, 1788, which became Australia's national day. During the following decades, the population gradually increased, and by the time of the 1850s gold rush, much of the continent had been explored by European settlers, and five more self-governing crown colonies had been created. The Commonwealth of Australia was formed on January 1, 1901, when the six colonies federated. Since then, Australia has retained a stable liberal democratic political structure that includes six states and ten territories and operates as a federal parliamentary constitutional monarchy. Australia is the oldest, flattest, driest, and least fertile continent on the planet. It covers 7,617,930 square kilometers of land. With deserts in the middle, tropical rainforests in the north-east, and mountain ranges in the south-east, it is a megadiverse nation with a wide variety of landscapes and climates. Australia's revenue comes from a variety of sources, including mining exports, telecommunications, banking, manufacturing, and international education. Australia is a developing country with the world's twelfth-largest economy. With the tenth highest per capita income in the world, it has a high-income economy. It is a regional force with the thirteenth highest military spending in the world. Immigrants make up 30% of the population, the highest percentage of any major Western nation. The country ranks highly in quality of life, health, education, economic freedom, civil liberties, and political rights, with all of its major cities performing extremely well in global comparative livability surveys. Australia is a member of the United Nations, the G20, the Commonwealth of Nations, ANZUS, the Organisation for Economic Co-operation and Development, the World Trade Organization, the Asia-Pacific Economic Cooperation Forum, and the ASEAN Plus Six mechanism.

04. Public holidays

05. Types of leave

Paid time off

Full-time staff are entitled to 4 weeks of paid vacation each year, while shift workers are entitled to 5 weeks.

Public holidays

Public holidays in Australia are varied depending on the state.

Sick days

Employees are entitled to ten days of paid leave each year, which they will take if they are ill or need to care for a family member.

Maternity leave

Since working for 12 months for the same boss, mothers are entitled to 12 months of free maternity leave. Any businesses have paid maternity leave.Employees may also refer to the Federal Government's parental leave program, which pays for up to 18 weeks of maternity leave.

Paternity leave

When an infant is born or adopted, fathers are entitled to five days of annual leave.Employees may also apply for extended leave through the federal government's program.

Parental leave

Maternity and paternity leave, as well as leave for when an infant is adopted, are both included in parental leave. An employee must have worked for at least 12 months to be considered.Parental leave is an unpaid leave that lasts for 12 months and can be extended by the boss for another 12 months.

Other leave

Bereavement Leave. Employees in Australia are granted 2 days of paid leave after the death of an immediate family member.

06. Employment termination

Termination process

The cause for termination varies according to an employee's number of coworkers, as well as the length and type of employment.


There is no requirement for a stated reason for termination for up to 15 permanent workers with a maximum tenure of six months. For permanent employees with tenures of at least six months, a specific and legitimate reason for termination is required. No specific reason for termination is required for employees with a tenure of less than 15 months. For less than 15 permanent workers with a minimum 12-month employment duration, a clear and legitimate reason for termination is required. For casual workers who have worked for the company for at least 12 months, a precise and legitimate basis for termination is required. Employees who are terminated within the first six months of employment (or 12 months if employed by a small firm) are unable to file a claim with the Fair Work Commission for "unfair dismissal." However, there are some exceptions to this rule known as General Protections matters, which do not require a minimum period of engagement. Unfair dismissal claims are adjudicated by the Fair Work Commission through a specialized employment tribunal.

Notice period

The notice period is determined by the length of employment of the employee. Employees with less than one year of service will given a one-week notice period. Employees with one to three years of service will receive two weeks' notice. Employees with three to five years of service will receive three weeks' notice. Employees who have worked for the company for more than five years will receive four weeks' notice. Employees who are above the age of 45 and have worked for the company for at least two years are entitled to an additional week of notice.

Severance pay

Severance pay is determined by the length of continuous service and the pay rate is determined by the number of ordinary hours worked. If the period of service is at least one year but less than two years, the employee is entitled to four weeks' severance pay. If the period of service is at least two years but less than three years, the employee is entitled to six weeks' severance pay. If the period of service is at least three years but less than four years, the employee is entitled to seven weeks' severance pay. If the service period is at least four years but not more than five years, an 8-week severance pay is provided. If the period of service is at least five years but not more than six years, a severance payment of ten weeks is provided. If the service period is at least six years but less than seven years, 11 weeks of severance pay is provided. If the period of service is at least seven years but less than eight years, the employee is entitled to 13 weeks of severance pay. If the period of service is between 8 and 9 years, a 14-week severance pay is provided. If the period of service is between 9 and 10 years, 16 weeks of severance pay is provided. If the employee has served for at least ten years, he or she is entitled to 12 weeks of severance pay.

Probation period

The probation period is six months; however, if an employer has more than fifteen employees, the probation period is extended to twelve months. Employers can also reduce the minimum probationary period. However, by doing so, the employer forfeits the benefits of a probationary period.

07. Working hours

General

In Australia, working hours are determined by an employer, the position held by an employee, or the sector in which the employer operates. In Australia, the standard workweek is 38 hours spread over five days. Employees frequently work a 40-hour week and get a half day (four hours) off every other week.

Overtime

For the first three hours (two hours in some industries), overtime is paid at 1.5 times the regular rate, and afterwards at two times the basic rate.

08. Minimum wage

General

In Australia, employees are entitled to a basic minimum wage per hour/week, unless an employer or industry has negotiated a different rate. Wages in Australia vary according to the nature of the job and/or the capacity in which an individual is employed.


Bonuses are common in Australia and are calculated on an annual salary basis. Pay increases on average every 16 months, but is subject to industry and level of experience.


Australia's minimum wage increased to 20.33 Australian dollars (15.03 USD) an hour on July 1, 2021. (772.60 AUD or 571.35 USD per week).

09. Employee benefits

General

There are two health-care systems in Australia: public and private. Australians with taxable earnings over a certain indexed level contribute 2 percent of their taxable income into Medicare, the national healthcare system.

Individuals may also acquire private health insurance for things that are not covered by the mandatory Medicare system, such as auxiliary health services (e.g., dental, optical, etc.) and private hospital accommodation.

Individuals who opt not to purchase private insurance and have an annual taxable income over a certain level are subject to a 1-percent Medicare fee.

Due to the comparatively high fringe benefits tax, many companies in Australia offer an allowance to workers rather than buying health insurance policies on their own.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Australia

to hire a team takes time, money, and effort. The labor law in

Australia

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Australia

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Australia

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Australia

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.