Using an employer of record in Australia

Hiring and paying employees in Australia can be tricky. The country’s labor laws are complex (and frequently updated), and compliance is essential to avoid being penalized.

That’s where an Employer of Record (EOR) like Payoneer Workforce Management comes in. An Employer of Record in Australia helps streamline local employment responsibilities, so you can engage, pay, and manage local talent without setting up a legal entity.

Want to learn how Payoneer Workforce Management can help simplify engaging talent in Australia? Speak to our team, or keep reading to learn all about using an EOR in Australia.

How to hire employees in Australia

If you’re looking to build a team in Australia, there are three main ways to do it.

1) Set up a local legal entity

This involves registering a business in Australia, setting up local payroll, and complying with Australian tax, superannuation, and employment laws.

2) Hire independent contractors

A flexible and fast option, especially for project-based work, but it carries risks. Misclassifying an employee as a contractor can result in fines and legal repercussions. 

3) Work with an Employer of Record in Australia 

An EOR, like Payoneer Workforce Management, acts as the legal employer in Australia and offers support to handle compliance, payroll, tax, and benefits, while helping you stay compliant with local labor laws.

Partnering with an employer of record in Australia

An EOR is a third-party organization that legally employs workers on your behalf. You continue to manage the day-to-day work and performance of the team, while the EOR assists with handling local employment compliance.

In Australia, an EOR offers assistance for:

• Complying with local labor laws and award agreements
• Handling employment contracts and onboarding
• Running payroll and paying income tax in line with local regulations
• Managing superannuation contributions and leave entitlements
• Managing statutory benefits and termination processes in line with local legislation

Navigating minimum wage, leave accrual, public holidays, and dismissal rules can be difficult without local expertise. An EOR helps streamline the process to onboard quickly, stay compliant, and mitigate risks. 

Payoneer Workforce Management offers trusted EOR services in Australia, helping global businesses onboard, pay, and manage local talent.

How to onboard employees in Australia

Onboarding employees in Australia remotely involves more than just sending a welcome email. 

If you’re engaging talent through an EOR, Australia’s employment laws still apply, so it’s important to follow the proper steps:

• Employment contract and documentation should outline pay, benefits, working hours, and entitlements under Australian law. Collect tax and superannuation details (e.g., TFN declaration, Superannuation Standard Choice form).
• Confirm the employee is registered with the Australian Taxation Office and enrolled in a super fund for compulsory retirement contributions.
• Add the employee to your payroll system and confirm they’re registered for accurate tax withholding, superannuation payments, and payslip generation.
• Hold an orientation to provide an overview of company policies, along with any other relevant info they’ll need to complete their work. 
• Introduce them to the team by scheduling virtual meet-and-greets to help your new candidate put faces to names. 
• Set up their IT accounts by shipping devices (if applicable), configuring accounts (email, Slack, HR systems), and sharing cybersecurity protocols.

Australia payroll

Here are some key payroll details for Australian employees:

• Fiscal year: Runs from July 1st to June 30th
• Payroll cycle: Most businesses pay employees on a weekly, fortnightly, or monthly basis, depending on the employment agreement.
• Salary and minimum wage: Employers must comply with the national minimum wage (AUD 948/week (AUD 4108/month)) and relevant modern awards (covered in detail below).
• Bonuses: While not mandatory, bonuses are common for performance-based roles. Terms should be outlined in the employment contract.

Required deductions and contributions:

• Income tax (PAYG withholding): Employers must withhold income tax from wages. Exact amounts vary based on income bracket.
• Superannuation (pension): Employers must contribute 12% of an employee’s ordinary earnings to a registered super fund.
• Medicare levy: Employees typically contribute 2% of their taxable income with no direct employer contribution.
• Student debt: Once an employee’s income reaches a certain threshold, employers automatically withhold repayments through payroll.

Employment laws in Australia

Employers in Australia are required to comply with national labor laws that safeguard employee rights and establish minimum standards for employment. Here are the key employment laws in Australia:

• Fair Work Act 2009: Primary legislation protecting employees includes 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.

These labor laws include key provisions about:

• Working hours: Full-time employees generally work 38 hours per week.
• Overtime: Extra hours may be paid at a higher rate under relevant modern awards or agreements.
• Probation period: Probation typically lasts up to 6 months and may include shorter notice periods.
• Minimum wage: Employee wages must meet the national minimum or award rates.
• Leave entitlements: Employees are entitled to paid time off, personal/carer’s leave, and public holidays, among others.
• Notice and termination: Employers must provide proper notice periods and may be required to pay redundancy benefits depending on the circumstances.
• Unfair dismissal protection: Employees may be eligible to lodge an unfair dismissal claim after the minimum employment period.
• Workplace safety: Employers must provide a safe work environment.

EOR solutions in Australia make it simple to keep track of key employment conditions. Your EOR in Australia can help you stay compliant with and guide you on any changes.

Minimum wage in Australia

As of July 2025, the national minimum wage in Australia is AUD 24.95 per hour, or AUD 948 per week based on a 38-hour workweek. 

Australia does not set different minimum wages based on region or city. However, pay can vary depending on:

• Industry and occupation
• Experience or skill level
• Age or classification

Minimum wage is periodically reviewed and adjusted by the government to align with inflation and the cost of living. Employers must keep up with these changes to remain compliant and avoid penalties.

You may consider partnering with an employer of record in Australia to stay compliant with minimum wage rules in Australia. An EOR may offer guidance on the correct pay rates and help you update payroll in line with regulatory changes.

Employment contracts in Australia

In Australia, employment contracts can be verbal, but having a written contract is strongly recommended.

A comprehensive written contract must comply with the Fair Work Act 2009. Key elements to cover in an Australian employment contract are:

• Contract type: Fixed-term, casual, or permanent
• Start date: When the employment officially begins
• Compensation and benefits: Base salary, superannuation contributions, bonuses, and any allowances
• Working hours and leave: Expected weekly hours, overtime terms, and entitlements to vacation, personal, and long service leave
• Probation period: Typically up to 6 months, with performance reviewed at the end
• Termination clauses: Required notice periods, redundancy pay (if applicable), and grounds for dismissal

Leave policy in Australia

Employees in Australia are entitled to several types of paid and unpaid leave, including:

• Public holidays: Paid leave for 10 to 12 public holidays per year, depending on the state or territory
• Vacation time: 4 weeks of paid vacation time per year, with a carry-forward policy.
• Sick leave: 10 days of paid personal/carer’s leave each year, which can be used when ill or caring for a family member
• Parental leave: Eligible employees can take up to 52 weeks of unpaid parental leave, which can be extended for another 52 weeks. The government also offers Parental Leave Pay for eligible employees (22 weeks for mothers, 2 weeks for fathers after July 2025).
• Other leave: Includes compassionate leave, community service leave, and long service leave

Work permit in Australia

Anyone who is not an Australian citizen or permanent resident must obtain a work permit/visa before starting employment. This includes full-time workers and contractors.

Visa processing times vary depending on the visa type and the applicant’s profile.

Employers should check the government website for more information about work visas and permits in Australia.

Background check in Australia

In most cases, background checks may not be legally required, but they are strongly recommended, especially for roles involving financial responsibility or security clearance. 

Employers must handle background checks carefully. Typically, employers in Australia may conduct:

• Address verification
• Criminal history checks
• Employment and reference checks
• Education and qualification verification

Employers may have to get the employee’s consent, and they must refer to the local guidelines before conducting background checks in Australia.

Employment termination in Australia

Employee terminations in Australia must follow the guidelines outlined in the Fair Work Act 2009. Employers must make sure the process is fair, lawful, and well-documented.

Notice period

Employees must be given written notice of termination. The minimum notice period depends on the employee’s length of service: 

Employees over the age of 45 with at least 2 years of service receive an additional week of notice. Employers in Australia can provide payment instead of notice.

Severance pay (redundancy)

Redundancy pay ranges from 4 weeks’ pay (for 1 year of service) to a maximum of 16 weeks’ pay (for 9+ years of service).

Redundancy pay is not required if the business has fewer than 15 employees or the employee was onboarded on a fixed-term contract.

Employees can make an unfair dismissal claim if their employer mishandles their termination. An EOR in Australia may help keep your termination processes compliant with local laws.

Company registration in Australia

If you plan to engage employees or operate a business directly in Australia, you’ll need to register as a local entity. 

Steps to register a company in Australia typically include:

1. Choose a unique company name
2. Select a legal company structure
3. Appoint directors and a registered office
4. Register the company with the local financial regulator
5. Register for taxes
6. Set up business banking and insurance

Refer to the Australian government website for more information. 

PEO in Australia 

If you’re looking to engage talent in Australia without setting up a local entity, you may come across terms like PEO (Professional Employer Organization) and EOR. The two services might seem the same at first glance, but they have some important differences. 

A PEO co-employs your workers. You’ll still need a legal entity in Australia, and the PEO will handle HR functions like payroll, benefits, and compliance.

Meanwhile, an EOR becomes the legal employer for local talent. You don’t need to set up a local entity because the EOR offers support to manage employment contracts, payroll, taxes, and compliance under local law.

For companies looking to scale without the operational burden, employer of record services in Australia are one of the most efficient and compliant solutions.

Explore Payoneer Workforce Management’s EOR services in Australia

Engaging employees in Australia comes with complex legal, tax, and HR requirements. With an EOR, you can:

• Engage full-time employees without setting up a local entity
• Navigate Australian labor laws and tax regulations
• Manage payroll, superannuation, leave, and termination
• Reduce risk, save time, and scale your team quicker

Try Payoneer Workforce Management today to learn how we can offer support in Australia.

FAQs  

1) What is an EOR in Australia?

An Employer of Record (EOR) Australia legally employs workers on your behalf, handling payroll, compliance, taxes, and benefits while you manage employees’ day-to-day work.

2) Is an Employer of Record legal in Australia?

Yes. Using an Employer of Record in Australia is legal and one of the most streamlined ways for foreign companies to engage employees in Australia without establishing a local entity.

3) Does an EOR help with Australian tax filings?

An EOR helps calculate, withhold, and file the necessary Australian taxes on your behalf, helping you stay compliant with local laws.