Employer of Record in Australia

How an Employer of Record (EOR) works in Australia

Reasons for using an EOR in Australia vary. Hiring without establishing a local entity is the most common reason, followed by labor market testing and relocating key employees to the region. An EOR company, like Rivermate, becomes the legal employer in Australia and hires your employee through its own legal entity. Rivermate is responsible for:

• Providing a locally compliant employment contract
• Payroll processing and benefits management
• Ongoing HR administration
• Compliance with local labor laws

This leaves you free to manage day-to-day operations with the employee, knowing Rivermate's HR experts are taking care of them locally.

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Australian labor market: At a glance

The hiring market
Greatest hiring activity:	Sydney (New South Wales) and Melbourne (Victoria)
Hiring timelines:	Local hire: 1-3 working days Foreign national, long-term stay: Between 6 and 10 months Foreign national, short-term stay: 3-4 weeks
In-demand sectors:	More than 50% of Australian workers are employed in: Healthcare Professional, scientific and technical services Construction Retail trade Education and training
Sectors with skills shortages:	Engineering, healthcare, construction and education
The salary market
Employer tax contributions:	Superannuation (retirement) State/territory payroll tax Workers’ compensation
National minimum wage:	As at 1 July 2026, A$26.44 per hour or A$1004.90 per week
Average weekly ordinary time earnings:	Full-time adults: A$2,084.20
Personal income tax brackets:	Income tax is paid on annual earnings from A$18,201 - A$190,001+

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Top 5 facts employers must know about hiring in Australia

International companies looking to hire in Australia can benefit from understanding the nuances that affect employment in the country. Here are the top 5 facts every foreign employer should take note of:

Onboarding a local employee in Australia is very quick and can be done within 1-3 days, but foreign nationals take longer. For long-term stays, the process can take up to 6 months, and immigration costs are high (A$7,000–A$15,000). Employers should be aware of these upfront costs.

Salaries and statutory contributions vary by state or territory. Core income tax withholding (PAYG) and superannuation (retirement) are federally mandated, but payroll taxes, workers’ compensation and holiday pay rates are determined by state or territory.

Salaries in Australia are some of the highest in the world. Employers should plan to pay higher salaries in major cities like Sydney, Melbourne, Perth, and Brisbane than in other areas. Certain occupations are also paid premium salaries, such as mining engineers, financial specialists, educators and managing directors.

Australia’s paid holiday leave benefits are generous. The country has many public holidays, and companies often shut down for two or more weeks over the Christmas/New Year period. Public holidays during the shutdown are paid as normal. Employers can ask employees to take paid annual leave during this shutdown.

Immigrating to Australia is not easy. The system is point-based, and only certain occupations qualify for work visas. An approved Australian body will assess the employee’s skills, and if they don’t meet the requirements, the application cannot move forward. Applicants older than 45 will also face major restrictions.

For businesses prepared to navigate Australia’s employment and immigration requirements, the business opportunities can be lucrative and far outweigh the cost and complexity of hiring here.

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The true cost of employing a worker in Australia

If you’re new to hiring in Australia, it can be easy to underestimate total employment costs because you are focusing on base salary alone, or do not know that salaries and contributions vary by state and territory. Here's a guideline to help you calculate the true cost of employment in Australia.

Salaries

Salaries in Australia vary by state/territory and occupation. The Australian Bureau of Statistics provides a helpful benchmark for new employers who want to understand salary differences between states/territories.

State/Territory	Average weekly earnings
Australian Capital Territory	A$2,290
Western Australia	A$2,227
New South Wales	A$2,109
Victoria	A$2,041
Queensland	A$2,040
Northern Territory	A$1,984
South Australia	A$1,970
Tasmania	A$1,846

Employer contributions and taxes

As an employer, you must pay three statutory contributions as required by Australian law.

• Superannuation (retirement)
• State payroll tax
• Worker’s compensation insurance
• Fringe benefit tax levied on non-cash benefits paid to employees

Superannuation

The superannuation, or retirement, contribution is the largest portion of the employer contribution, at 12% of an employee’s ordinary time earnings. This is the minimum amount an employer must contribute and cannot be deducted from the employee’s base salary. Most employees are entitled to ‘super’, including certain qualifying independent contractors.

Mandatory employee benefits

Local employment laws set the minimum required leave entitlement for all employees as follows:

• Annual Leave: Full-time employees get four weeks and shift workers five weeks.
• Personal/Carer's Leave (sick leave): 10 days of paid leave per year for when an employee is sick or needs to care for an immediate family member.
• Parental Leave: Eligible employees can take 12 months of unpaid parental leave (job-protected). During this time, the government will step in and pay up to 26 weeks of minimum wages to the employee.
• Long Service Leave: Determined by the state or territory; this is a reward for staying with one employer for between 7 and 10 years.

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Employer Cost Calculator

Calculate total employment costs before you make a formal offer with Rivermate’s employer cost calculator.

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Legal risks employers should know about when hiring in Australia

As an employer, you must fulfill certain legal responsibilities in Australia. Understanding them can help you avoid costly mistakes. Here we share three legal risks we think you should know before hiring in Australia.

Immigration

As of 1 July 2026, Australia has introduced several immigration changes that affect work permits and sponsorships. The changes mean higher sponsorship costs and longer lead times for international hires, requiring proactive planning by employers. Department of Home Affairs processing timelines are currently:

• Specialist skills stream visa: 57 days
• Core skills stream visa: Up to 10 months
• Short-stay specialist visa: Up to 4 weeks

Skilled visa income thresholds have also increased in line with changes to the annual average weekly ordinary time earnings. New thresholds are:

• Core skills income threshold: A$79,423
• Specialist skills income threshold: A$146,576

Employment contracts

Employment contracts must comply with Australian employment laws. This means foreign employers cannot use a contract from their home country. They also cannot use an employment contract from a foreign national’s home country, even if the employee requests it.

The main employment contracts in Australia are full-time, part-time, fixed-term and casual contracts. Probation periods are allowed at the start of the employment relationship. Probation periods are 3-6 months for standard roles and up to 12 months for senior and highly specialized roles.

Terminations

Terminations in Australia are regulated under the Fair Work Act 2009. The Act enforces mandatory notice periods, final payouts and protection against unfair dismissals. Termination notice periods depend on the employee’s length of service. During a notice period, the employee can continue working or receive payment in lieu of notice.

Employees must receive final payouts that include outstanding wages, unused accrued leave, and notice or redundancy pay, where applicable.

When an employee is made redundant, they are entitled to severance pay based on years of service. This payment is calculated using the employee’s base pay and does not include bonuses, allowances or overtime.

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What are the benefits of using an EOR provider in Australia?

Finding the right candidate in Australia is only the first step. Once you’ve found them, you still need to hire them, manage compliance and adhere to Australian labor laws. You can either establish a local entity to do this, or partner with an EOR like Rivermate.

We hire employees through our existing infrastructure and expertise. As the legal employer, we will be responsible for:

• Handling employment contracts.
• Setting up payroll in accordance with local compliance requirements.
• Calculating and withholding taxes.
• Paying social security contributions.
• Managing ongoing employment compliance, including terminations.
• Sponsoring work permits (if applicable)

For you, as the foreign employer, this can change what hiring in Australia is about. You can hire compliantly without a legal entity, onboard people faster, and scale as needed.

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Ready to hire in Australia?

If you’ve found the person you want to hire, Rivermate can handle onboarding, global payroll and other employment-related responsibilities.

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Sources:

Australian Jobs 2026 | Jobs and Skills Australia
Minimum wages - Fair Work Ombudsman
Average Weekly Earnings, Australia, May 2026 | Australian Bureau of Statistics