Rivermate | Australia flag


549 EUR per employee per month

Discover everything you need to know about Australia

Hire in Australia at a glance

Here ares some key facts regarding hiring in Australia

Australian Dollar
GDP growth
GDP world share
Payroll frequency
Weekly, fortnightly, or monthly
Working hours
38 hours/week

Overview in Australia

Read more
  • Geography and Environment: Australia, the smallest continent and largest island, covers 7.692 million square kilometers. It features diverse landscapes including tropical rainforests, arid deserts, and a coastline with beaches and coral reefs. Situated on the Indo-Australian plate, it is geologically stable with some of the world's oldest rock formations.

  • Historical Overview: Aboriginal and Torres Strait Islander peoples have inhabited Australia for at least 65,000 years. The continent was claimed for Great Britain by Captain James Cook in 1770, and British colonization began in 1788. Australia federated in 1901 and played significant roles in both World Wars. Post-war immigration has shaped it into a multicultural nation.

  • Socio-Economic Landscape: Australia boasts a prosperous economy with a high GDP per capita. It is a multicultural society with a strong social safety net including universal healthcare and comprehensive welfare programs. Education is highly valued with several top universities.

  • Indigenous Rights and Climate Change: Efforts are ongoing for the recognition and rights of Indigenous peoples. Australia faces environmental challenges like bushfires and biodiversity threats, with active policy responses to combat climate change.

  • Workforce and Employment: The workforce is diverse and skilled, with significant employment in health care, retail, construction, and professional services. The economy is service-based, emphasizing healthcare, education, and professional services. Work-life balance is prioritized with flexible working conditions.

  • Communication and Organizational Culture: Australian workplace communication is direct, informal, and includes humor. Workplaces often have a flat hierarchy, emphasizing teamwork and collaborative decision-making.

  • Key Industries: Australia is a leader in mining and has robust sectors in construction, manufacturing, and agriculture. Emerging sectors with growth potential include renewable energy, healthcare, aged care, and technology.

  • Employment Sectors: The largest employment sectors are healthcare and social assistance, retail trade, construction, education, and accommodation and food services, reflecting the country's economic and demographic trends.

Rivermate | bulb icon

Get a payroll calculation for Australia

Understand what the employment costs are that you have to consider when hiring Australia

Employer of Record in Australia

Rivermate is a global Employer of Record company that helps you hire employees in Australia without the need to set up a legal entity. We act as the Employer of Record for your employees in Australia, taking care of all the legal and compliance aspects of employment, so you can focus on growing your business.

How does it work?

When you hire employees in Australia through Rivermate, we become the legal employer of your staff. This means that we take on all the responsibilities of an employer, while you retain the day-to-day management of your employees.

You as the company maintain the direct relationshiop with the employee, you allocate them the work and manage their performance.
Rivermate takes care of the local payrolling of the employee, the contracts, HR, benefits and compliance.

Responsibilities of an Employer of Record

As an Employer of Record in Australia, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Australia

Read more

As an employer in Australia, you are responsible for several tax obligations beyond personal income tax, which are crucial for compliance and can offer financial benefits to your business.

Mandatory Contributions:

  • Superannuation Guarantee (SG): Employers must contribute a minimum of 11% (increasing to 12% by July 2025) of an employee's ordinary time earnings to a superannuation fund, with quarterly payments required. Non-compliance leads to the Superannuation Guarantee Charge, which is higher than the SG rate and non-deductible.
  • Payroll Tax: This state-based tax applies to employers whose wage bill exceeds a specific threshold, with varying rates and thresholds across states.

Optional Contributions:

  • Salary Sacrifice to Superannuation: Employees may opt to contribute part of their pre-tax salary to their superannuation, potentially reducing their taxable income.
  • Fringe Benefits Tax (FBT): Applies to benefits provided to employees, such as company cars, with employers required to lodge an FBT return if applicable.

Tax Deductibility:

  • Contributions to superannuation and payroll taxes are generally deductible.

Other Tax Responsibilities:

  • PAYG Withholding: Employers withhold part of employees' income for tax liabilities based on the Tax File Number Declaration.
  • Medicare Levy and Surcharge: Helps fund public healthcare, with the levy at 2% of taxable income and the surcharge applicable to high-income earners without private hospital cover.
  • HELP Repayments: Required for those with higher education loan debts, with thresholds based on taxable income.
  • Work-Related Deductions: Employees can claim deductions for expenses directly related to earning income, provided they meet specific criteria.

GST and Services:

  • GST: Most goods and services in Australia are subject to a 10% GST, with businesses collecting and remitting this to the ATO. Certain services are GST-free or input-taxed.
  • Businesses with a GST turnover of $75,000 or more must register for GST.

Tax Incentives:

  • R&D Tax Incentive: Offers a tax offset for eligible R&D activities, with different benefits based on company turnover.
  • ESIC Tax Incentives: Provides benefits to investors in early-stage innovation companies, including tax offsets and capital gains exemptions.
  • Small Business Income Tax Offset: Available to small businesses with less than $5 million annual turnover, offering a tax offset up to $1,000.

Important Considerations:

  • Eligibility for tax incentives can be complex, and consulting a tax advisor or relevant government resources is recommended for up-to-date information.

Leave in Australia

Read more

In Australia, vacation leave entitlements are governed by the Fair Work Act 2009 and the National Employment Standards (NES). Full-time and part-time employees are entitled to 4 weeks of paid annual leave per year, with shift workers potentially eligible for an additional week. Leave accrues throughout the year and can be taken as it accrues, with some agreements offering a 17.5% leave loading on top of regular pay. Employees can cash out some annual leave with certain conditions.

Employers may refuse leave requests based on reasonable business grounds. If an employee becomes ill during annual leave, they may switch to personal/carer's leave. Australia also observes national public holidays such as New Year's Day, Australia Day, and Christmas, among others, with additional state-specific holidays varying by location.

Other leave entitlements under the NES include 10 days of personal/carer's leave, 2 days of compassionate leave, long service leave after a period of employment, unpaid community service leave, and 12 months of unpaid parental leave, extendable by another 12 months. There are also provisions for unpaid Domestic and Family Violence Leave.

Benefits in Australia

Read more

Australian employment law provides a range of mandatory benefits to ensure employee well-being and financial security, as outlined in the Fair Work Act 2009 and the National Employment Standards (NES). These include:

  • Superannuation: Employers must contribute at least 11% (increasing to 12% by 2025) of an employee's salary to a superannuation fund.
  • Paid Leave: Employees are entitled to annual leave, personal/carer's leave, compassionate leave, and parental leave.
  • Workers' Compensation: Employers must have insurance to cover employees for work-related injuries or illnesses.

Additional benefits, while not mandatory, are commonly offered to enhance employee satisfaction and include:

  • Flexible Work Arrangements: Encouraged under the Fair Work Act.
  • Private Health Insurance: Often provided as a supplementary benefit.
  • Salary Packaging: Allows employees to receive part of their salary in the form of fringe benefits.
  • Life and Income Protection Insurance: Provides financial security for unforeseen events.
  • Employee Discounts: On various products and services.

Employers also offer perks like wellness programs, professional development opportunities, and social events to foster a positive work environment. While private health insurance is not mandatory, many employers provide it as a voluntary benefit to attract and retain talent. Medicare covers all Australian residents, offering basic healthcare services, with private insurance providing additional coverage. Understanding these benefits is crucial for both employers and employees in Australia.

Workers Rights in Australia

Read more

In Australia, employment termination is regulated by the Fair Work Act 2009, National Employment Standards, modern awards, and registered agreements. Employers must have lawful grounds for dismissal, such as poor performance, misconduct, redundancy, or incapacity due to illness or injury. Termination generally requires a notice period based on the employee's length of service, with additional provisions for older employees. Payment in lieu of notice is an option for employers.

Severance pay is mandated for redundancy, calculated based on the duration of employment. Employees can lodge unfair dismissal claims if they believe their termination was unjust, and specific industry or company agreements may offer additional protections. Anti-discrimination laws in Australia protect against unfair treatment based on characteristics like age, disability, race, sex, and more, across various areas including employment and education.

Employers have responsibilities to prevent discrimination and ensure a safe workplace, adhering to health and safety regulations. This includes ergonomic requirements and risk management practices. Employees have rights to a safe work environment, necessary information and training, and can refuse unsafe work. Enforcement of workplace health and safety laws is carried out by agencies like Safe Work Australia and state-specific WHS regulators.

Agreements in Australia

Read more

Permanent employment involves an ongoing job with regular hours and no fixed end date, available in full-time or part-time forms. Full-time workers typically work 38 hours weekly with benefits like paid leave and redundancy pay, while part-time workers have similar benefits but work fewer hours and receive pro-rata entitlements. Casual employment offers no guaranteed hours and lacks paid leave benefits but includes a higher hourly rate. Fixed-term contracts specify employment duration, requiring notice and potentially redundancy pay, with two types: fixed and maximum term.

Employment conditions are often governed by Awards and Enterprise Agreements, setting minimum standards for pay and conditions in specific sectors. Independent contractors, unlike employees, operate their own businesses and manage their work independently without employee entitlements.

Employment agreements should detail job roles, responsibilities, remuneration, working hours, and leave entitlements, aligning with the National Employment Standards and relevant laws. Intellectual property created during employment typically belongs to the employer. Termination conditions, restraint of trade clauses, and dispute resolution processes must be clearly outlined, adhering to applicable laws.

Probationary periods, common in Australia, last typically 3-6 months, allowing both employer and employee to assess suitability. These periods should be clearly defined in the employment contract, including terms for performance evaluation and potential termination.

Confidentiality and non-compete clauses protect business interests by restricting employees' post-employment activities. These clauses must be reasonable and specific to be enforceable, and employees are advised to review and negotiate these terms carefully.

Remote Work in Australia

Read more

Australia's approach to remote work is evolving, with no single comprehensive law specifically addressing it. Key aspects include:

  • Legal Regulations: The Fair Work Act 2009 (Cth) provides a basis for employee rights applicable to remote workers, including the right to request flexible work arrangements. The Work Health and Safety Act 2011 (Cth) mandates employer responsibility for the health and safety of remote employees.

  • Technological Infrastructure: While Australia has robust internet connectivity in urban and regional areas, remote areas may face challenges. Employers need to consider the geographical distribution of their workforce and may need to invest in technologies that support remote work.

  • Employer Responsibilities: Employers should develop clear remote work policies covering aspects like working hours, communication expectations, and equipment provision. They must also ensure data protection and privacy in line with the Privacy Act 1988 (Cth), including implementing security measures like data encryption and access controls.

  • Flexible Work Options: Besides remote work, other flexible arrangements like part-time work, flexitime, and job sharing are governed under the Fair Work Act, though specific regulations for these are not detailed. Clear agreements on equipment and expense reimbursements are essential.

Overall, while Australia's legal framework provides some guidance for remote work, there is a need for clearer regulations specifically addressing remote work challenges such as data protection, equipment provision, and expense reimbursements.

Working Hours in Australia

Read more

The Fair Work Act 2008 (Cth) regulates working hours in Australia, setting a standard full-time workweek at a maximum of 38 hours, roughly 7.6 hours per day over five days. However, industry-specific awards and enterprise agreements can modify these standards, setting specific working hours and start/finish times for different industries.

Overtime is considered any hours worked beyond 38 per week for full-time employees, and beyond contracted hours for part-time employees, up to 38 hours. Overtime must be "reasonable" considering factors like employee health and safety. Compensation for overtime can be through higher pay rates or time in lieu (TOIL), with specifics dictated by relevant awards or agreements.

The National Employment Standards (NES) provide baseline entitlements for rest periods and meal breaks, such as a minimum 30-minute unpaid meal break after five consecutive hours of work. Specific awards and agreements may offer more generous provisions, including paid meal breaks and mandated rest breaks.

Shift work, including night shifts and weekend work, is also regulated, with most awards recognizing night shifts as work between 11 pm and 6 am, often with additional payments or benefits. Weekend work may have higher pay rates and specific rostering requirements to ensure a balance between work and personal life. Employees are entitled to be informed about shift arrangements and any significant changes should involve reasonable consultation.

Salary in Australia

Read more

In Australia, maintaining competitive salaries is crucial for attracting and retaining talent and ensuring employee satisfaction. Competitive salaries are influenced by industry standards, location, and employee experience and qualifications. Benefits for employers include attracting top talent, improving retention, and boosting productivity. Employees benefit from financial security, job satisfaction, and enhanced career advancement opportunities.

The National Minimum Wage (NMW) and industry-specific awards regulate minimum pay rates, with the NMW currently at $23.23 per hour as of July 1, 2023. Employers also offer bonuses, allowances, and other financial incentives like superannuation contributions, which are set to increase to 12% by 2025, and performance-based bonuses to further attract and retain employees.

The payroll cycle in Australia varies, with common frequencies being monthly, fortnightly, and weekly, depending on the employer's policy and the employment contract. Key payroll stages include the pay period, payroll processing, and payday, with additional considerations for public holidays and the provision of detailed payslips to ensure transparency.

Termination in Australia

Read more

The Fair Work Act 2009 (Cth) in Australia sets out minimum notice periods for employee termination based on the length of service, ranging from one week for less than a year of service to four weeks for more than five years. These statutory minimums can be extended by industry-specific awards, registered agreements, or individual employment contracts, which may specify longer notice periods. Additionally, the Act outlines severance pay entitlements for employees whose positions are made redundant, with the amount based on the duration of continuous service, though exemptions apply for certain types of employees and small businesses. Employers must have valid reasons for termination, such as performance issues, misconduct, redundancy, or operational changes, and must adhere to procedural fairness. This includes providing opportunities for the employee to respond and, in cases of performance or conduct issues, issuing formal warnings. Unfair dismissal protections allow employees to challenge terminations that are harsh, unjust, or unreasonable, with a 21-day period to file a claim. Special rules apply for summary dismissals and small business employers.

Freelancing in Australia

Read more

In Australia, distinguishing between employees and independent contractors is essential due to the different rights, obligations, and entitlements each classification holds under legal frameworks like taxation and workplace relations. Key factors influencing this classification include the level of control over work, integration into the business, payment methods, benefits, and whether an Australian Business Number (ABN) is held.

Misclassification can lead to significant legal repercussions for businesses, including unpaid entitlements, tax liabilities, and breaches of work health and safety laws. It's advisable for businesses and workers unsure of their classification to seek professional legal or tax advice.

For independent contractors, understanding contract structures, negotiation practices, and prevalent industries is crucial. Contract options include fixed-price, time-based, and Statement of Work (SOW) agreements. Contractors should negotiate rates, payment terms, and scope of work clearly. Common industries for contractors include IT, creative industries, marketing, consulting, and trades.

Intellectual property rights are also a critical consideration, with default ownership typically resting with the creator unless otherwise stipulated in a contract. Contracts should clearly outline IP ownership, rights granted, moral rights, and usage limitations. Non-disclosure agreements may be necessary to protect confidential information.

Freelancers must manage their tax obligations as sole traders, including income tax, the Medicare Levy, and possibly the Goods and Services Tax (GST) if turnover exceeds $75,000. They may also consider making voluntary superannuation contributions.

Insurance is another important aspect, with options like public liability, professional indemnity, income protection, and contents insurance providing financial security. Freelancers are encouraged to consult with insurance brokers to find suitable coverage.

Health & Safety in Australia

Read more

Australia's Work Health and Safety (WHS) legislation, primarily based on the Model WHS Laws developed by Safe Work Australia, aims to protect workers from workplace injuries, illnesses, and fatalities. This legislation is largely consistent across most Australian jurisdictions, except Victoria, and includes the WHS Act, WHS Regulations, and Codes of Practice which provide specific guidelines and requirements for maintaining workplace safety.

Key aspects of the WHS laws include:

  • Duties of Care: The WHS Act imposes a primary duty of care on Persons Conducting a Business or Undertaking (PCBUs) to ensure the health and safety of workers and others, to the extent "reasonably practicable." This involves eliminating risks or minimizing them when elimination isn't possible.
  • Risk Management: Workplaces must identify hazards, assess risks, and implement control measures, addressing specific dangers like hazardous chemicals and confined spaces.
  • Worker Participation: Health and Safety Representatives (HSRs) and Health and Safety Committees (HSCs) facilitate worker involvement in safety matters, including consultations on risk assessments and control measures.
  • Training and Information: Essential for ensuring workers have the necessary skills and knowledge for safe operations, including role-specific training and access to Safety Data Sheets for hazardous chemicals.
  • Incident Reporting and Investigation: The WHS Act requires reporting serious incidents to regulators and mandates investigations to prevent recurrence, with different protocols for notifiable and less serious incidents.
  • Specific Regulations for High-Risk Industries: Certain sectors like construction and mining have additional standards and regulations, including requirements for high-risk work licenses.
  • Enforcement: WHS Regulators can inspect workplaces, issue notices, and prosecute breaches, with penalties including fines and imprisonment for severe violations.

Overall, the WHS framework is designed to ensure a proactive approach to workplace safety, involving regular updates, worker participation, and adherence to specific industry standards and practices.

Dispute Resolution in Australia

Read more

Labor courts and arbitration panels, specifically the Federal Court of Australia and the Fair Work Commission (FWC), are key in resolving workplace disputes in Australia, operating under the Fair Work Act 2009. The Federal Court handles breaches of industrial awards, Fair Work Act contraventions, and union-related disputes, while the FWC focuses on conciliation and arbitration, wage setting, and handling claims like unfair dismissal and industrial action. Disputes typically start with an application to the FWC and may escalate to the Federal Court if unresolved. Compliance audits and inspections across various sectors ensure adherence to laws and regulations, with consequences for non-compliance including financial penalties and criminal prosecution. Whistleblower protections are robust, covering identity protection and protection from detrimental acts. Australia also adheres to international labor standards set by the International Labour Organization (ILO), incorporating these standards directly or indirectly into domestic law, though challenges like enforcement and state law harmonization persist.

Cultural Considerations in Australia

Read more
  • Communication Style: Australian workplaces are known for their direct and straightforward communication, valuing clarity and efficiency over subtlety, which can sometimes appear blunt to those from cultures that prefer indirect communication.

  • Informality and Professionalism: There is a balance between informality and professionalism in Australian workplaces. While hierarchy is respected, open communication is encouraged across all levels, and slang and humor are common within the bounds of respect.

  • Non-verbal Communication: Australians use more reserved non-verbal cues, with importance placed on eye contact and personal space. Overly expressive gestures or facial expressions might be misunderstood.

  • Negotiation Style: Australians prefer a cooperative negotiation style, aiming for "win-win" outcomes, reflecting the cultural value of "mateship" which emphasizes fairness, respect, and mutual benefit. Negotiators focus on building rapport and trust.

  • Business Culture and Structure: Australian business culture supports flatter hierarchies and approachable leadership, reflecting a national value of egalitarianism. Decision-making often involves team consultation, promoting a collaborative environment.

  • Public Holidays and Work Schedules: Australia observes national holidays like New Year's Day, Australia Day, and Christmas, among others, which impact business operations. Regional observances also affect work schedules, and businesses need to plan accordingly to manage staffing and operations effectively.

Frequently Asked Questions for Employer of Record services in Australia

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Australia?

When using an Employer of Record (EOR) in Australia, the EOR, such as Rivermate, handles the filing and payment of employees' taxes and social insurance contributions. This includes the following responsibilities:

  1. Income Tax Withholding: The EOR is responsible for withholding the appropriate amount of income tax from employees' wages and remitting it to the Australian Taxation Office (ATO).

  2. Superannuation Contributions: The EOR ensures that the mandatory superannuation contributions are made to the employees' superannuation funds. This is a critical aspect of the Australian employment system, where employers must contribute a percentage of an employee's earnings to their superannuation fund.

  3. Payroll Tax: The EOR calculates and pays any applicable payroll taxes to the relevant state or territory revenue office. Payroll tax rates and thresholds can vary between states and territories.

  4. Medicare Levy: The EOR also handles the Medicare levy, which is a tax that funds the public healthcare system in Australia. This levy is typically deducted from employees' wages along with income tax.

  5. Workers' Compensation Insurance: The EOR arranges and pays for workers' compensation insurance, ensuring that employees are covered in case of work-related injuries or illnesses.

By managing these responsibilities, the EOR ensures compliance with Australian tax laws and employment regulations, reducing the administrative burden on the client company and allowing them to focus on their core business activities.

What options are available for hiring a worker in Australia?

In Australia, employers have several options for hiring workers, each with its own set of legal, administrative, and financial considerations. Here are the primary options available:

  1. Direct Employment:

    • Permanent Employees: These employees work on a full-time or part-time basis and are entitled to benefits such as annual leave, sick leave, and superannuation contributions.
    • Fixed-Term Employees: Hired for a specific period or project, these employees have similar entitlements to permanent employees but their employment ends at the conclusion of the term or project.
    • Casual Employees: These employees work on an as-needed basis and do not have guaranteed hours. They receive a higher hourly rate to compensate for the lack of benefits like paid leave.
  2. Independent Contractors:

    • Contractors operate their own business and provide services to your company under a contract for services. They are responsible for their own taxes, insurance, and superannuation. This option offers flexibility but requires careful compliance with Australian laws to ensure the contractor is not deemed an employee.
  3. Temporary Staffing Agencies:

    • These agencies provide temporary workers for short-term needs. The agency handles the employment relationship, including payroll and compliance, while the worker performs tasks for your company.
  4. Employer of Record (EOR) Services:

    • An EOR, like Rivermate, can be an excellent option for companies looking to hire in Australia without establishing a legal entity. The EOR becomes the legal employer of the worker, handling all employment-related responsibilities such as payroll, taxes, benefits, and compliance with local labor laws. This allows your company to focus on managing the worker's day-to-day activities and performance.

Benefits of Using an Employer of Record in Australia:

  • Compliance: Australian employment laws are complex and include stringent regulations on wages, working conditions, and employee rights. An EOR ensures full compliance with these laws, reducing the risk of legal issues.
  • Cost-Effective: Setting up a legal entity in Australia can be expensive and time-consuming. An EOR allows you to hire workers quickly and efficiently without the need for a local entity.
  • Administrative Relief: The EOR handles all administrative tasks related to employment, including payroll processing, tax filings, and benefits administration, allowing your HR team to focus on strategic initiatives.
  • Flexibility: An EOR provides the flexibility to scale your workforce up or down based on business needs without the long-term commitment of establishing a local entity.
  • Local Expertise: EORs have in-depth knowledge of the local labor market and employment practices, ensuring that your hiring practices are competitive and compliant.

By leveraging an EOR like Rivermate, companies can efficiently and compliantly hire workers in Australia, enabling them to expand their operations and tap into the local talent pool without the complexities of managing employment law and administrative burdens.

Is it possible to hire independent contractors in Australia?

Yes, it is possible to hire independent contractors in Australia. However, there are specific legal and regulatory considerations that employers must be aware of to ensure compliance with Australian laws.

Key Considerations for Hiring Independent Contractors in Australia:

  1. Definition and Classification:

    • Independent Contractor vs. Employee: In Australia, the distinction between an independent contractor and an employee is crucial. Independent contractors operate their own business and provide services to other businesses under a contract for services. Employees, on the other hand, work under a contract of service and are subject to the employer's control and direction.
    • Multi-Factor Test: Australian courts and the Fair Work Commission use a multi-factor test to determine the nature of the working relationship. Factors include the degree of control over work, the method of payment, provision of tools and equipment, and the ability to delegate work.
  2. Legal Obligations:

    • Contractual Agreement: It is essential to have a clear and comprehensive written contract outlining the terms of engagement, including the scope of work, payment terms, and duration of the contract.
    • Taxation: Independent contractors are responsible for managing their own tax obligations, including Goods and Services Tax (GST) if applicable. Employers must ensure that contractors provide an Australian Business Number (ABN).
    • Superannuation: In some cases, employers may be required to pay superannuation contributions for independent contractors if the contract is primarily for the contractor's labor.
  3. Workplace Rights and Protections:

    • Fair Work Act: Independent contractors are not covered by the Fair Work Act 2009, which means they do not receive the same entitlements as employees, such as minimum wage, leave entitlements, and unfair dismissal protections.
    • Independent Contractors Act: This Act provides some protections for independent contractors, including the right to challenge unfair contracts.
  4. Risks of Misclassification:

    • Penalties: Misclassifying an employee as an independent contractor can lead to significant penalties, including back payment of entitlements, superannuation, and potential fines.
    • Sham Contracting: Engaging in sham contracting, where an employer deliberately misrepresents an employment relationship as an independent contracting arrangement, is illegal and subject to severe penalties.

Benefits of Using an Employer of Record (EOR) like Rivermate:

  1. Compliance Assurance:

    • An EOR ensures that all legal and regulatory requirements are met, reducing the risk of misclassification and associated penalties.
    • They handle all aspects of employment law compliance, including contracts, tax obligations, and superannuation.
  2. Administrative Efficiency:

    • An EOR manages payroll, benefits, and other administrative tasks, allowing businesses to focus on core activities.
    • They provide a single point of contact for all employment-related matters, simplifying the management of independent contractors.
  3. Risk Mitigation:

    • By using an EOR, businesses can mitigate the risks associated with hiring independent contractors, including legal disputes and financial liabilities.
    • An EOR can provide guidance on best practices and ensure that all contractual agreements are legally sound.
  4. Scalability and Flexibility:

    • An EOR allows businesses to scale their workforce up or down quickly and efficiently, without the complexities of direct hiring.
    • They offer flexibility in managing short-term projects or specialized tasks that require independent contractors.

In summary, while it is possible to hire independent contractors in Australia, it is essential to navigate the legal landscape carefully to avoid potential pitfalls. Using an Employer of Record like Rivermate can provide significant benefits in terms of compliance, administrative efficiency, risk mitigation, and flexibility.

What is the timeline for setting up a company in Australia?

Setting up a company in Australia involves several steps, each with its own timeline. Here is a detailed breakdown of the process:

  1. Choosing a Company Structure: This initial step involves deciding on the type of company you want to establish, such as a proprietary limited company (Pty Ltd) or a public company. This decision can be made relatively quickly, often within a few days, depending on your business needs and consultation with legal or business advisors.

  2. Company Name Registration: You need to choose and register a company name with the Australian Securities and Investments Commission (ASIC). This process can be completed online and typically takes a few hours to a day, provided the name is available and meets ASIC's requirements.

  3. Obtaining an Australian Business Number (ABN): An ABN is required for tax and business purposes. You can apply for an ABN through the Australian Business Register (ABR) website. The application process is straightforward and can be completed online, usually within 15 minutes to a day, assuming all information is correctly provided.

  4. Registering for Goods and Services Tax (GST): If your business expects to have a turnover of $75,000 or more, you must register for GST. This can be done simultaneously with your ABN application or separately through the ABR. The registration process is quick, typically taking a few hours to a day.

  5. Setting Up a Business Bank Account: Opening a business bank account in Australia is essential for managing your company’s finances. This process can take a few days to a week, depending on the bank’s requirements and your ability to provide the necessary documentation.

  6. Registering for PAYG Withholding: If you plan to hire employees, you need to register for Pay As You Go (PAYG) withholding with the Australian Taxation Office (ATO). This registration can be done online and usually takes a few hours to a day.

  7. Complying with Employment Laws: Understanding and complying with Australian employment laws, including Fair Work Act requirements, awards, and agreements, is crucial. This step involves ongoing compliance and may require consultation with legal experts, which can take several days to weeks.

  8. Setting Up Office Space and Infrastructure: Finding and setting up office space, purchasing equipment, and establishing IT infrastructure can take anywhere from a few weeks to a few months, depending on your specific needs and the availability of resources.

Overall, the timeline for setting up a company in Australia can range from a few days to several weeks, depending on the complexity of your business and how quickly you can complete each step. Using an Employer of Record (EOR) service like Rivermate can significantly expedite this process by handling many of these administrative tasks on your behalf, allowing you to focus on your core business activities.

What are the costs associated with employing someone in Australia?

Employing someone in Australia involves several costs that employers need to consider. These costs can be broadly categorized into direct and indirect expenses. Here’s a detailed breakdown:

Direct Costs:

  1. Salaries and Wages:

    • Base Salary: The primary cost is the employee's base salary, which varies depending on the industry, role, and experience level.
    • Overtime Pay: Employees may be entitled to overtime pay, typically at a higher rate than the regular hourly wage.
  2. Superannuation:

    • Employers are required to contribute to their employees' superannuation (retirement fund). As of 2023, the mandatory superannuation contribution rate is 10.5% of the employee's ordinary time earnings.
  3. Payroll Tax:

    • Payroll tax is a state tax on the wages paid by employers. The rate and threshold vary by state. For example, in New South Wales, the rate is 4.85% for wages above the threshold of AUD 1.2 million.
  4. Workers' Compensation Insurance:

    • This insurance covers employees in case of work-related injuries or illnesses. The cost varies depending on the industry and the level of risk associated with the job.
  5. Leave Entitlements:

    • Annual Leave: Employees are entitled to a minimum of 4 weeks of paid annual leave per year.
    • Sick Leave: Employees are entitled to 10 days of paid personal/carer’s leave per year.
    • Public Holidays: Employers must pay employees for public holidays, even if they do not work on those days.

Indirect Costs:

  1. Recruitment and Onboarding:

    • Costs associated with advertising job vacancies, conducting interviews, and onboarding new employees.
  2. Training and Development:

    • Investing in employee training and development to enhance skills and productivity.
  3. Employee Benefits:

    • Additional benefits such as health insurance, bonuses, and other perks that may be offered to attract and retain talent.
  4. Administrative Costs:

    • Costs related to payroll processing, compliance with employment laws, and maintaining employee records.
  5. Termination Costs:

    • Costs associated with terminating an employee, including severance pay and any legal fees if disputes arise.
  1. Fair Work Compliance:

    • Ensuring compliance with the Fair Work Act, which governs employment conditions in Australia. Non-compliance can result in penalties and legal fees.
  2. Legal and Consultancy Fees:

    • Costs for legal advice and consultancy services to navigate complex employment laws and regulations.

Using an Employer of Record (EOR) like Rivermate:

An Employer of Record (EOR) can help manage and mitigate many of these costs by handling payroll, compliance, and administrative tasks. Here are some specific benefits of using an EOR in Australia:

  1. Cost Efficiency:

    • Reduces the need for in-house HR and legal teams, lowering administrative and legal costs.
  2. Compliance Assurance:

    • Ensures compliance with Australian employment laws, reducing the risk of penalties and legal disputes.
  3. Streamlined Payroll:

    • Manages payroll processing, superannuation contributions, and tax filings, ensuring accuracy and timeliness.
  4. Risk Management:

    • Handles workers' compensation insurance and other mandatory benefits, mitigating financial risks.
  5. Focus on Core Business:

    • Allows businesses to focus on their core operations while the EOR manages HR-related tasks.

By leveraging an EOR like Rivermate, companies can effectively manage the costs associated with employing staff in Australia while ensuring compliance and reducing administrative burdens.

What is HR compliance in Australia, and why is it important?

HR compliance in Australia refers to the adherence to the various laws, regulations, and standards that govern employment practices within the country. This includes a wide range of legal requirements related to employee rights, workplace safety, anti-discrimination, wages, benefits, and other aspects of the employer-employee relationship. Key components of HR compliance in Australia include:

  1. Fair Work Act 2009: This is the primary piece of legislation governing employment in Australia. It sets out the minimum standards for employment, including the National Employment Standards (NES), which cover areas such as maximum weekly hours, leave entitlements, and termination notice.

  2. National Employment Standards (NES): These are 11 minimum employment entitlements that have to be provided to all employees. They include annual leave, personal/carer's leave, compassionate leave, community service leave, long service leave, public holidays, notice of termination and redundancy pay, and the right to request flexible working arrangements.

  3. Modern Awards: These are legal documents that outline the minimum pay rates and conditions of employment for specific industries or occupations. They cover things like pay, hours of work, rosters, breaks, allowances, penalty rates, and overtime.

  4. Workplace Health and Safety (WHS) Laws: These laws are designed to ensure the health and safety of workers. Employers are required to provide a safe working environment, conduct risk assessments, and implement measures to mitigate risks.

  5. Anti-Discrimination Laws: These laws prohibit discrimination on various grounds, including race, sex, age, disability, and sexual orientation. Employers must ensure that their workplace practices do not discriminate against employees or job applicants.

  6. Privacy Laws: The Privacy Act 1988 regulates how personal information is handled. Employers must ensure that they collect, use, and store employee information in accordance with these laws.

  7. Superannuation: Employers are required to make superannuation contributions on behalf of their employees to a complying superannuation fund. This is a form of retirement savings for employees.

  8. Taxation: Employers must comply with tax obligations, including Pay As You Go (PAYG) withholding, Fringe Benefits Tax (FBT), and payroll tax.

HR compliance is crucial for several reasons:

  1. Legal Protection: Non-compliance with employment laws can result in significant legal penalties, including fines and litigation. Ensuring compliance helps protect the organization from legal risks.

  2. Employee Satisfaction and Retention: Compliance with HR laws ensures that employees are treated fairly and receive their entitled benefits, which can lead to higher job satisfaction and retention rates.

  3. Reputation Management: Companies that comply with HR laws are seen as responsible and ethical employers, which can enhance their reputation and attractiveness to potential employees and customers.

  4. Operational Efficiency: Clear and compliant HR policies and procedures can lead to more efficient and effective management of the workforce, reducing the risk of disputes and disruptions.

  5. Risk Management: Compliance helps in identifying and mitigating risks related to employment practices, thereby ensuring a safer and more productive workplace.

Using an Employer of Record (EOR) like Rivermate can be particularly beneficial in ensuring HR compliance in Australia. An EOR takes on the responsibility of managing all aspects of employment, including compliance with local laws and regulations. This can be especially advantageous for foreign companies looking to hire employees in Australia without establishing a legal entity. The EOR handles payroll, taxes, benefits, and other HR functions, ensuring that the company remains compliant with Australian employment laws, thereby reducing the administrative burden and legal risks for the employer.

Do employees receive all their rights and benefits when employed through an Employer of Record in Australia?

Yes, employees in Australia receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with Australian labor laws and regulations, which are among the most comprehensive in the world. Here are some key aspects:

  1. Fair Work Act Compliance: The EOR ensures that all employment contracts adhere to the Fair Work Act 2009, which governs employment standards in Australia. This includes minimum wage, working hours, leave entitlements, and termination procedures.

  2. National Employment Standards (NES): Employees are entitled to the 11 minimum entitlements outlined in the NES, such as annual leave, personal/carer’s leave, parental leave, and public holidays. An EOR ensures these standards are met.

  3. Superannuation: Employers in Australia are required to contribute to their employees' superannuation (retirement fund). An EOR like Rivermate ensures that these contributions are made correctly and on time.

  4. Workplace Health and Safety: The EOR is responsible for ensuring that the workplace complies with the Work Health and Safety Act 2011, providing a safe working environment for employees.

  5. Payroll and Tax Compliance: The EOR handles payroll processing, ensuring that employees are paid correctly and on time. They also manage tax withholdings and ensure compliance with the Australian Taxation Office (ATO) requirements.

  6. Employee Benefits: Beyond statutory requirements, an EOR can also manage additional benefits that a company may offer, such as health insurance, bonuses, and other perks, ensuring they are administered correctly.

  7. Dispute Resolution: In case of any employment disputes, the EOR can provide support and ensure that any issues are resolved in accordance with Australian employment laws.

By using an EOR like Rivermate, companies can ensure that their employees in Australia receive all their legal rights and benefits, while also simplifying the complexities of international employment compliance.

How does Rivermate, as an Employer of Record in Australia, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Australia, ensures HR compliance through a comprehensive approach that addresses the complexities of Australian employment laws and regulations. Here are the key ways Rivermate achieves this:

  1. Understanding Local Labor Laws: Rivermate has in-depth knowledge of Australian labor laws, including the Fair Work Act 2009, which governs employment conditions, rights, and obligations. This ensures that all employment contracts and practices are compliant with national standards.

  2. Employment Contracts: Rivermate prepares and manages employment contracts that comply with Australian legal requirements. These contracts cover essential aspects such as job roles, responsibilities, compensation, benefits, and termination conditions, ensuring they meet the standards set by the Fair Work Commission.

  3. Payroll Management: Rivermate handles payroll processing in accordance with Australian tax laws and regulations. This includes accurate calculation and timely payment of wages, superannuation contributions, and other statutory deductions such as PAYG (Pay As You Go) withholding tax.

  4. Tax Compliance: Rivermate ensures compliance with the Australian Taxation Office (ATO) requirements. This includes managing employee tax file numbers (TFNs), lodging necessary tax forms, and ensuring correct tax rates are applied to employee earnings.

  5. Superannuation: Rivermate manages superannuation contributions, ensuring that the correct percentage of an employee's earnings is contributed to their superannuation fund as mandated by Australian law. This includes staying updated with any changes in superannuation rates and regulations.

  6. Workplace Health and Safety (WHS): Rivermate ensures that all workplaces comply with the Work Health and Safety Act 2011. This includes implementing safety policies, conducting risk assessments, and ensuring that employees receive necessary training to maintain a safe working environment.

  7. Employee Benefits and Entitlements: Rivermate ensures that employees receive all statutory benefits and entitlements, such as annual leave, sick leave, parental leave, and long service leave, in accordance with Australian employment standards.

  8. Record Keeping: Rivermate maintains accurate and up-to-date records of all employee-related information, including contracts, payroll records, leave balances, and performance reviews. This ensures compliance with legal requirements for record retention and provides transparency for both the employer and employees.

  9. Legal Updates and Training: Rivermate stays abreast of any changes in Australian employment laws and regulations. They provide regular updates and training to their HR team and clients to ensure ongoing compliance with new legal requirements.

  10. Dispute Resolution: Rivermate assists in managing and resolving any employment disputes in accordance with Australian laws. This includes providing guidance on fair work practices, handling grievances, and representing the employer in any legal proceedings if necessary.

By leveraging Rivermate's expertise as an Employer of Record in Australia, companies can ensure full compliance with local HR and employment laws, thereby minimizing legal risks and focusing on their core business operations.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Australia?

When a company uses an Employer of Record (EOR) service like Rivermate in Australia, the EOR assumes many of the legal responsibilities associated with employment. However, the company still retains certain obligations and should be aware of the following legal responsibilities:

  1. Compliance with Employment Laws: The EOR ensures compliance with Australian employment laws, including the Fair Work Act 2009, which governs employment standards, employee rights, and employer obligations. This includes adhering to minimum wage laws, working hours, leave entitlements, and termination procedures.

  2. Payroll and Taxation: The EOR handles payroll processing, ensuring that employees are paid correctly and on time. They also manage tax withholdings, superannuation contributions, and other statutory deductions, ensuring compliance with the Australian Taxation Office (ATO) requirements.

  3. Employee Benefits: The EOR administers employee benefits, including superannuation (retirement savings), health insurance, and other perks as required by law or company policy. They ensure that these benefits are provided in accordance with Australian standards.

  4. Workplace Health and Safety: The EOR is responsible for ensuring compliance with workplace health and safety regulations under the Work Health and Safety Act 2011. This includes providing a safe working environment, conducting risk assessments, and implementing necessary safety measures.

  5. Employment Contracts: The EOR drafts and manages employment contracts in line with Australian legal requirements. These contracts outline the terms and conditions of employment, including job responsibilities, compensation, and termination clauses.

  6. Employee Rights and Protections: The EOR ensures that employees' rights are protected, including protection against unfair dismissal, discrimination, and harassment. They handle grievances and disputes in accordance with Australian employment laws.

  7. Record Keeping: The EOR maintains accurate and up-to-date employment records as required by law. This includes records of hours worked, leave taken, and other employment-related information.

  8. Termination and Redundancy: The EOR manages the termination process, ensuring compliance with legal requirements for notice periods, redundancy payments, and other entitlements. They handle the necessary documentation and communication with employees.

While the EOR takes on these responsibilities, the company still has certain obligations:

  • Oversight and Management: The company retains control over the day-to-day management and oversight of the employees' work. This includes setting performance expectations, providing training, and managing work assignments.

  • Strategic Decisions: The company makes strategic decisions regarding the workforce, such as hiring, promotions, and terminations, in consultation with the EOR.

  • Compliance Monitoring: The company should monitor the EOR's compliance with legal requirements and ensure that the EOR is fulfilling its responsibilities effectively.

  • Communication: The company must maintain clear communication with the EOR to ensure that all employment-related matters are handled smoothly and in accordance with legal requirements.

By using an EOR like Rivermate in Australia, companies can mitigate the complexities and risks associated with employment law compliance, allowing them to focus on their core business activities while ensuring that their workforce is managed in accordance with Australian regulations.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.