Employment laws in Australia

No matter where you’re hiring, it’s essential to understand local labor laws — not just to protect your business, but also to make sure you’re treating international employees fairly. From minimum wage and leave entitlements to tax obligations and termination rules, non-compliance can lead to expensive penalties.

For global companies looking to hire in Australia, partnering with an Employer of Record (EOR) helps streamline the process in Australia. 

Payoneer Workforce Management helps onboard, pay, and manage talent in Australia, without setting up a local entity. 

Keep reading to learn more about Australian labor laws.

List of employment laws in Australia

Here are the key employment laws in Australia you need to know about:

• Fair Work Act 2009: Sets out the National Employment Standards, minimum wages, modern awards, enterprise agreements, and protections against unfair dismissal.
• Fair Work Regulations 2009: Provides detailed procedures and definitions related to employment conditions, compliance, and enforcement.
• National Employment Standards (NES):  A set of 11 minimum employment entitlements, including leave, maximum weekly hours, and termination notice.
• Work Health and Safety Act: Governs workplace safety and employer responsibilities.
• Privacy Act 1988: Regulates how employers must handle personal information, including employee data.
• Superannuation Guarantee (Administration) Act 1992: Requires employers to contribute a minimum percentage of an employee’s earnings into a superannuation (retirement) fund.
• Paid Parental Leave Act 2010: Establishes entitlements for government-funded parental leave payments.

Essential contract elements

Complicated contract employment laws in Australia mean that having a clear, written employment contract is a good practice that protects both employers and employees. 

Key contract elements to include are:

• Job title and description: Clearly define the role, start date, responsibilities, and reporting lines.
• Compensation: State the salary or hourly rate (in AUD) and payment frequency.
• Benefits and bonuses: Specify any employer-provided benefits (e.g., health allowances, phone reimbursements, performance-based bonuses).
• Superannuation (retirement contributions): These are usually 12% of ordinary earnings.
• Working hours, overtime, and leave entitlements: Include ordinary hours of work, expectations around overtime (including applicable rates), and entitlements under the National Employment Standards (e.g., vacation leave, personal leave, public holidays).
• Terms of employment and termination: Is the contract permanent, fixed-term, or casual? Include notice periods, grounds for termination, and probation terms if required.

Common law contract of employment in Australia

In Australia, when you agree to hire someone as an employee, you automatically enter into a common law contract of employment, whether or not a written agreement exists. 

This means that the working relationship legally implies certain terms that reflect basic rights and obligations, even without a formal written document. Common law employment rights include:

• The employee’s right to a safe working environment
• The employer’s obligation to provide reasonable notice of termination
• The employee’s duty to act in good faith and in the employer’s best interest
• The employer’s responsibility to pay wages for work performed

Minimum wage in Australia

As of July 2025, Australia’s national minimum wage is AUD 948 per week or AUD 24.95 per hour. Some employees are covered by a specific award that dictates a higher minimum pay based on their industry, role, experience, or qualifications.

In addition to base pay, employers must also comply with overtime compensation rules in accordance with employment laws in Australia. 

These vary but generally require higher pay rates for work performed outside ordinary hours, as well as penalty rates for work done on weekends, public holidays, or late at night.

Working hours in Australia

Under the NES, the maximum ordinary working hours for a full-time employee in Australia are 38 hours per week, typically spread across Monday to Friday. The standard working hours in most contracts are 7.6 to 8 hours per day.

Overtime generally applies when an employee works beyond their ordinary hours or on weekends and public holidays, and is typically paid at one and a half times or double the employee’s regular rate. 

Employees are entitled to at least 1 rest day per week, and a minimum 12-hour break between shifts is recommended.

Full-time employees are entitled to 4 weeks of paid vacation leave per year. There are national public holidays too, though the exact number can vary by state or territory due to regional holidays.

Learn more about time off and leave policy in Australia.

Mandatory benefits

Employees are entitled to several mandatory benefits under employment laws in Australia. These include:

• Superannuation: Employers must contribute 12% of an employee’s earnings to a registered superannuation (retirement) fund.
• Paid time off: Employees are entitled to 4 weeks of paid time off per year.
• Personal/carer’s leave: Employees can take 10 days of paid personal leave per year for sick days or caring responsibilities.
• Compassionate leave: Employees get 2 days of paid leave per occasion for the death or serious illness of a close family member.
• Parental leave: The government funds up to 24 weeks of paid parental leave, and employees can take up to 24 months of unpaid parental leave.
• Public holidays: Employees are entitled to a paid day off on national and regional public holidays, unless they are required to work under an award or agreement.
• Termination and redundancy pay: Employers must provide minimum notice periods and, in some cases, redundancy pay, based on the employee’s length of service.
• Long service leave: Long service leave is available after years of continuous service, with exact rules varying by state or territory.

Termination

Whether you need to end an employment contract due to performance issues, redundancy, or business restructuring, employers need to comply with the Fair Work Act 2009.

Grounds for dismissal

Employees can be dismissed for valid reasons (poor performance, serious misconduct, etc.). However, termination must be procedurally fair — employees must have the opportunity to respond to allegations and have the chance to improve where applicable.

Redundancy

If the job an employee is completing is no longer required, employers need to follow redundancy consultation obligations (if required by an award or agreement). Before termination, employers must consider reasonable redeployment opportunities. 

Severance package

If eligible, an employee made redundant must be paid redundancy pay in addition to their accrued leave entitlements. The amount is determined by their continuous service, ranging from 4 weeks’ pay (for 1 year of service) up to 16 weeks’ pay or more (for 9+ years of service).

Notice period

Minimum notice periods vary depending on how long an employee has been with a company:

• 1 week for less than 1 year of service
• 2 weeks for 1 – 3 years of service
• 3 weeks for 3 – 5 years of service
• Up to 4 weeks for 5+ years of service
• Add 1 extra week if the employee is over 45 and has at least 2 years of service

Navigate employment laws in Australia with trusted support

As you can see, the list of employment laws in Australia is extensive. These labor laws are designed to protect workers and ensure fair and safe workplaces. But for global companies, keeping up with these regulations and obligations can be complicated and time-consuming.

That’s where Payoneer Workforce Management comes in. Our unified platform can help you hire, pay, and manage talent in Australia with compliance support.

Book a demo today!

FAQs

1) What are the basic employment laws in Australia?

The basic employment laws in Australia include:

• Probation periods: Typically 3 to 6 months, at the employer’s discretion. 
• Working hours: 38 hours per week for full‑time employees. 
• Overtime: Higher overtime rates may apply, depending on industry, occupation, shift type, and day worked; no general rule applies. 
• Annual leave: 4 weeks of annual leave. 
• Sick leave: 10 sick days per year. 
• Public holidays: Vary by state or territory. 
• Parental leave: Eligible employees may receive 22 weeks (110 days) Parental Leave Pay for the mother and 2 paid weeks for the father (for births/adoptions after 1 July 2025). 
• Compassionate leave: Minimum 2 days of paid leave. 
• Superannuation: Employer-funded retirement contribution of 12%. 
• Notice periods:
  • Less than 1 year → 1 week
  • 1-3 years → 2 weeks
  • 3-5 years → 3 weeks
  • 5+ years → 4 weeks
  • +1 week if employee is over 45 and has 2+ years of service

2) What is the minimum wage in Australia?

The national minimum wage is AUD 948 per week for full-time employees. 

3) What governs employment conditions in Australia?

In Australia, employment relationships may be governed by common law, which implies basic terms such as fair pay, safe working conditions, and reasonable notice of termination, even in the absence of a formal written contract.