Hire Employees in Australia: 2026 EOR, Payroll and Employment Guide

An Australian entity is normally a proprietary limited company, requiring an ACN from ASIC, at least one director ordinarily resident in Australia, an ABN and PAYG withholding registration, plus workers’ compensation insurance in each state where staff work.

An Employer of Record signs the Australian contract, runs payroll with Single Touch Payroll reporting, pays superannuation and manages award classification and workers’ compensation. The resident director requirement is often the practical reason a first Australian hire goes through an EOR.

Sources: Fair Work Act 2009 · Corporations Act 2001 · verified 3 August 2026

Superannuation follows labour, not employment status. A contractor engaged mainly for their personal labour is entitled to the 12% guarantee even where they invoice through an ABN. Many foreign companies discover this only when the ATO raises a Superannuation Guarantee Charge.

The National Minimum Wage sets the floor for award-free employees, and is reviewed annually by the Fair Work Commission with changes taking effect from 1 July. Most employees are instead covered by a Modern Award setting higher classification-based minimums.

Pay frequency is not prescribed by statute but must be at least monthly, and fortnightly is most common. Payslips must be issued within one working day of payment and must contain prescribed information including superannuation contributions.

Annualised salary arrangements can absorb award entitlements such as overtime and penalty rates, but only where the arrangement satisfies strict record-keeping and reconciliation requirements. Failing the reconciliation test creates underpayment liability, which has produced several high-profile cases.

Superannuation is calculated on ordinary time earnings and is capped at a quarterly maximum contribution base, which limits employer cost for high earners.

Four representative profiles, costed with the 2026 contribution rates above. Salaries are illustrative market midpoints, not GX operating data — use them to see how the on-cost percentage behaves as pay rises, not as a salary benchmark for a specific role. Superannuation Guarantee at 12% to the A$270,830 annual contribution base. State payroll tax applies above each state threshold and is not included. Only superannuation is shown; state payroll tax applies above each state threshold. For real market data on your roles, ask for a costing.

Sources: ATO Single Touch Payroll · Fair Work Ombudsman · verified 3 August 2026

Non-residents are taxed from the first dollar at a higher starting rate and do not pay the Medicare levy. Working holiday makers have their own separate schedule. Getting residency status right at onboarding matters more in Australia than in most markets because the difference in withholding is substantial.

Employees with study loans have additional compulsory repayments withheld through payroll, which is a common source of confusion on a first payslip.

Sources: Australian Taxation Office · verified 3 August 2026, bracket values pending line-by-line verification

Sources: Fair Work Act 2009 · National Employment Standards · state long service leave acts · verified 3 August 2026

Award-covered employees typically receive time and a half for the first two or three hours of overtime and double time thereafter, plus penalty rates for evenings, weekends and public holidays. Salaried employees can be paid an annualised salary that absorbs these, but only if the arrangement satisfies a better-off-overall test and is reconciled periodically.

From 1 July 2026 new rules protecting penalty and overtime rates came into full effect, restricting arrangements that reduce them. Review any annualised salary arrangement against the current position.

Sources: Fair Work Act 2009 · Fair Work Commission · verified 3 August 2026

Australia has national public holidays plus additional days set by each state and territory, so the total differs by location — Victoria observes days that New South Wales does not, and vice versa. The King’s Birthday falls on different dates in different states. Confirm the applicable state calendar before publishing.

Superannuation is the principal statutory benefit, with employer contributions at 12% of ordinary time earnings paid into the employee’s chosen fund. Medicare provides universal healthcare funded through the tax system, so private medical cover is an enhancement rather than a necessity.

The National Employment Standards provide four weeks’ annual leave, ten days’ paid personal and carer’s leave, parental leave and long service leave — the last accruing under state legislation and often overlooked by foreign employers because it has no equivalent elsewhere.

Common enhancements include salary packaging arrangements, additional superannuation, private health cover and flexible work. Novated car leases are widely used and tax-effective.

Paid parental leave is available through the government scheme, and many employers top it up. This has become a significant competitive differentiator in professional hiring.

Employees over 45 who have completed at least two years of service when they receive notice get an additional week. An award, enterprise agreement or contract may set a longer period, and the longer period governs.

Payment in lieu is at the employee’s full pay rate, which includes incentive payments and bonuses, loadings, monetary allowances, and overtime or penalty rates. Redundancy pay, by contrast, is calculated at the base rate and excludes all of those. The two use different bases, which is a frequent calculation error.

Redundancy pay

Redundancy pay falls from 16 weeks to 12 at ten years of service. Fair Work states this is consistent with the 2004 Redundancy Case decision of the Australian Industrial Relations Commission. It is a genuine step down, not a typographical oddity.

Small business employers with fewer than fifteen employees are generally exempt from redundancy pay, counting associated entities as one entity and including the employees being dismissed. Regular and systematic casuals count toward the fifteen.

Accrued annual leave and long service leave must be paid out on termination. Where a business becomes insolvent, the Fair Entitlements Guarantee covers unpaid wages, leave, up to five weeks of pay in lieu of notice and up to four weeks of redundancy pay per year of service, but it does not cover superannuation or bonuses.

Sources: Fair Work Ombudsman — Notice of termination and redundancy pay fact sheet, retrieved and confirmed 3 August 2026 · Fair Work Act 2009 ss. 117, 119

Sponsorship approval, nomination and the visa application are three separate stages, and the Skilling Australians Fund levy is a significant per-employee cost paid upfront by the employer rather than the applicant. Employers must also meet labour market testing requirements unless an exemption applies.

Independent skilled migration and working holiday visas exist and carry no employer obligation, which is often the faster route where the candidate already holds one.

Sources: Department of Home Affairs · verified 3 August 2026, current thresholds and levy amounts pending verification

Australia has an extensive treaty network and the analysis usually turns on the dependent agent test. The Australian Taxation Office has also issued guidance on employees working remotely from Australia for foreign employers, which is directly relevant given how much of that arrangement exists.

Sources: Income Tax Assessment Act · ATO guidance · applicable tax treaties · verified 3 August 2026

The multi-factor test looks at control, ability to delegate, commercial risk, provision of tools and whether the person is genuinely operating a business of their own. An ABN and an invoice prove nothing on their own.

The superannuation point is the one that catches foreign employers most often: a contractor paid principally for personal labour is entitled to the 12% guarantee, and unpaid amounts attract the Superannuation Guarantee Charge with interest and an administration fee.

The Fair Work Information Statement must be given to every new employee before or as soon as practicable after they start. Casual employees receive an additional Casual Employment Information Statement.