Employer of Record Australia
Infotree Global provides the Australia Employer of Record services for companies looking to hire employees and manage HR and payroll in Australia. There is no need to set up a branch office because all your business requirements will be taken care of by our dedicated team of professionals. We will do all the work in compliance with the local labor laws and help in running your global business smoothly and effectively.
What is an Employer of Record in Australia?
An Employer of Record (EOR) refers to an entity that assumes the responsibilities of an organization in a foreign country. This concept is particularly popular among businesses looking to expand their operations in Australia. When hiring employees in Australia it’s essential to have an understanding of the local labor laws. An EOR being well versed in these regulations takes charge. Ensures hiring practices in Australia without any complications. In Australia, the duties of an Employer of Record encompass employment-related tasks such as HR management, payroll administration, contract drafting, taxation compliance employee benefits management, and more. By engaging the services of an EOR companies can effectively handle their business operations in a country without having to establish their presence.
Hiring in Australia
Employment law in Australia mandates the minimum statutory standards and conditions as mentioned in the “Fair Work Act, 2009” legislation. Independent labor relations are operated by the Fair Work Commission in Australia. The entire process of hiring and conducting business in Australia comprises detailed and complicated procedures. A lot of rules and regulations are imposed on the employment and business expansion process.
With all the complicated processes involved, it gets difficult for many companies that look forward to expanding their operations in the Australian market. But with an employer of record in Australia, all the responsibilities are maintained thoroughly. At Infotree Global, we make sure you get enough time to focus on your business expansion while we take care of your hiring and payroll procedures.
Employment Compliance
There should be knowledge beforehand of the legal requirements in Australia, like leave, permitted and holiday entitlement, and important pay that should be available before the offer letter. Making sure that businesses comply with their minimum legal obligations is crucial. For the employees, there are acts like the Privacy Act 1988, which regulate and protect the privacy of the employees by handling their details within privacy standards. There is The Australian Human Rights Commission Act 1986 protects employees from discriminatory behavior based on race, gender, religion, political views, medical records, criminal records, and union activities. While drafting a contract for hiring employees in Australia, the employer must know the following points:
Working hours – In Australia, an employee can work up to 38 hours a week, or 7.6 hours a day. The hourly rate must be defined in an employment contract. Offices in Australia operate from Monday to Friday. Employers can ask their employees to remain available to work whenever required (which is considered overtime). Hours of operation exceeding the allotted hours can attract overtime compensation.
Compensation – The National Minimum Wage applies to employees not covered by a registered agreement or award. The Fair Work Act 2009 regulates the minimum wage rate and is reviewed annually.
In Australia, an employee’s minimum wage is AUD 23.23 per hour or AUD 929.20.80 per week. However, minimum wages may differ for some employees depending upon their employment type, age, or work capacity under the categories of junior pay, apprentice and trainee pay, or employee with a disability.
Employees are entitled to minimum pay rates that are higher than the national minimum wage rate, including penalty rates and allowances if they are covered by a modern award or enterprise agreement. If an employee is not covered by a modern award or enterprise agreement, overtime pay depends solely on the employer’s discretion.
Overtime in Australia is considered as follows:
- Hours exceeding the first two or three hours of the shift are paid at 150% of the normal hourly rate.
- Any hour exceeding the above-mentioned hours is paid at 200% of a normal hourly rate.
Probationary Period – There are no laws associated with the drafting of the probationary period, so employers can put their employees on a probationary period, which can be for a week or certain months. During this time, the employee can take sick and annual leave if they are eligible.
Termination and Severance – The termination period will entirely depend on the duration of the employment period, and it generally ranges between one to four weeks depending on the tenure of an employee. An extra week should be included if the employee is 45 years old or older and has been employed for more than two years. The employer must give the employee a written notice with justification on the last date of employment or payment in lieu of notice.
If the employee has done anything that goes against the contract or if any misconduct has taken place, no notice or compensation will be provided by the employer for terminating the contract.
Bonus – There are no laws associated with the bonus payment; however, employers can provide their employees bonuses depending on their performance.
Employee Entitlements
In Australia, employers need to comply with standards of employment entitlements for employees as mentioned under the National Employment Standards (NES). These include the wages, conditions, and duration of the work. While hiring employees in Australia, the employer must be aware of the statutory benefits and leaves they are supposed to give to their employees. Before drafting the contract and initiating the hiring process in Australia, the employer of record in Australia focuses on the following points:
Maternity leaves – In Australia, employees are entitled to Parental Leave Pay (PLP) from the Australian government and paid parental leave from their employer. Caretakers of the newborn or adopted child get up to 18 weeks of paid parental leave, which is paid at the national minimum wage rate, but the benefits will be granted only by the employer. The maternity leave will start six weeks before the birth of the child. In case of an emergency birth, illness, or miscarriage, the employee can ask for extended leave for up to 24 months.
Holidays – There are eight paid holidays in Australia as per the Fair Work Act. Additional holidays may vary from state to state. The public holidays where employees are given leave are:
- New Year’s Day
- Australia Day
- Good Friday
- Easter Monday
- Anzac Day
- Queen’s Birthday
- Christmas Day
- Boxing Day.
Vacation – Employees who work full-time in an organization are eligible to get four weeks of paid vacation every year. The employee will be paid 17.5% above their base pay for every week while they are on vacation.
Sick leave – Employees in Australia are eligible to get a total of ten days of paid personal or caregiver leave every year. Other than that, an employee can get two days of compassionate leave for an ill family member. Candidates can also get ten days of community service leave for any community service.
Challenges When Expanding into Australia
Setting up a subsidiary in a foreign country comes with a lot of challenges. The international business environment has many employment-related considerations. Australia is currently the 14th-largest economy in the world. The population of 25 million contributes to its 10th rank in per capita GDP. It provides an ideal yet challenging atmosphere for incoming operations. Companies entering the Australian market have to consider a lot of things before establishing their businesses. The employment environment is constantly changing, which makes it important for companies to be aware of the country’s payroll, taxes, regulations, and legal formalities in employment.
Deciding upon a business structure is especially important before setting up a business in Australia. Choosing the wrong structure can lead to numerous tax implications and big fees if the business structure needs to change. The selection of structure depends upon the size and type of business the company wants to run. As your Australian Employer of Record, we make sure you achieve your global growth objectives without having to take on the cost and risk of establishing a local entity.
Setting up Payroll in Australia
When you are looking to expand your enterprise in the Australian market, you need to understand and be aware of the compliance requirements for payroll in Australia. The accepted currency is the Australian Dollar.
The employees need to enroll for a Tax File Number. There are no social security taxes, but the taxpayers finance welfare and public health care services. The Medicare levy is currently 2%. National Employment Standards cover the basic employment conditions, and additional agreements can be established in unionized industries. The standard payroll cycle is conducted every month, with exceptions in industries like manufacturing, which pay their employees on a fortnightly basis. The retirement fund or superannuation is also taken care of, with employers contributing an amount equal to 11.5% of their salary, and this is for all employees earning more than AUD 450 per month. The Employer Record in Australia can assist a non-resident company to employ and manage the payroll on its behalf. This way, the company can focus on their other important work in addition to reducing the compliance burden, which otherwise could be a headache!
Payroll Tax in Australia
As an employer, it is the responsibility of the employer of record to ensure that all the necessary obligations are fulfilled and that income tax and other security concerns are duly processed. A foreign company setting up business in Australia needs to take care of the tax requirements like sales tax, payroll tax, withholding tax, compensations, and individual income tax. In Australia, the full company tax rate is 30%, and the lower company tax rate is 25%.
The other tax-related concerns for employees are-
- State Payroll Taxes – The tax and thresholds differ across different states and territories.
- Goods and Services Tax (10%).
- Pay As You Go (PAYG) – A withholding tax on the income of the employees.
- Fringe Benefits Tax (FBT) – Employers pay the FBT tax on certain benefits given to employees.
Australian income tax rates for 2024/25 (residents)
| Income Thresholds | Rate | Tax Payable on This Income |
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16c for each $1 over $18,200 |
| $45,001 – $120,000 | 30% | $4,288 plus 30c for each $1 over $45,000 |
| $120,001 – $180,000 | 37% | $31,288 plus 37c for each $1 over $135,000 |
| $180,001 and over | 45% | $51,638 plus 45c for each $1 over $190,000 |
*The above rates do not include the Medicare levy of 2%.
Australia is as strict about its tax payments as any other country. Infotree Global, as an Australia Employer of Record, makes sure that the company fulfills all those payments on time. They handle your taxes, withholding, social security, and so on.
Services Offered by an Employer of Record in Australia
When you partner with an EOR, it becomes the legal employer and professionally takes over the responsibilities associated with employing staff in Australia. It enables you to save time and money on resources and lets you focus on core business operations, rather than juggling with routine HR and employment tasks. Let’s understand in what areas it helps an organization.
HR & Payroll – Managing resources and payroll, in a country can feel overwhelming especially when it comes to adhering to the tax laws of that specific country. As an Employer of Record in Australia we take on the responsibility of handling the hiring process assisting with onboarding and ensuring your employees are paid promptly and accurately.
Employment Contracts – We assist in drafting and managing employment contracts tailored to Australian employment standards and regulations. This helps protect your business interests and ensures compliance with local labor laws.
Benefits Management – Attract and retain top talent by offering competitive employee benefits and perks. We can help you design and manage benefit packages that align with Australian market expectations.
Legal Assistance – To operate successfully in the market it is crucial to have an understanding of compliance and risks. Our team of experts who are based in Australia will keep you informed throughout the process. They will take care of all compliance and reporting obligations, such, as taxation and superannuation ensuring that everything remains aligned with employment laws.
Employee Onboarding & Offboarding – We ensure efficient and seamless onboarding and offboarding of employees. We manage the entire lifecycle of your employees from hiring, issuing contracts, and offboarding taking care of every aspect of your employee’s journey, with us.
Taxation and Social Security – In Australia the tax system can be quite intricate posing challenges, for companies. However, our team of professionals is here to assist with taxation matters, compliance requirements, employee deductions, and other related aspects in Australia. We offer end-to-end services to ensure the handling of these matters.
Work Permits and Visa – Dealing with Visas and work permits in Australia can be complex and sometimes lead to visa rejections. Being an Employer of Record in Australia we offer visa and work permit processing services, assisting your employees in obtaining all necessary documents to apply for Australian Visa seamlessly.
Risk Management – We assist in mitigating legal risks associated with hiring in Australia. We guide you on all aspects related to potential risks associated with employment in Australia and help you stay updated with in-country labor laws to avoid any legal issues, disputes, and financial liabilities.
Benefits of Engaging an Employer of Record in Australia
To simplify your expansion process, let Infotree Global assist you in dealing with all the complexities. Be it hiring employees, distributing payroll, or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worrying.
Market Access – Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using Employer of Record services, an international organization can avail itself of the expertise of Australian employees to work for its company. Besides quick access to the Australian market, the EOR also enables the client to ease off worries related to payroll and HR.
In-Country Laws – Regulations and compliance play a role when doing business in a country. In the case of operating a business in Australia, it’s essential to have an understanding of the payroll and taxation regulations. Employer of Record in Australia can assist companies in hiring local employees while managing all the intricacies associated with the country’s rules. Whether it’s income tax, social security contributions, expense management, withholding charges, or business tax an EOR company ensures compliance by taking care of everything.
Diverse Solutions – Whether you have an existing business in Australia or are planning to start one engaging the services of an employer of record can provide assistance. An employer of record in Australia can handle the recruitment and employment process on your behalf eliminating the need for establishing a subsidiary in Australia. If your business is already operational leveraging an employer of record to manage payroll tasks can be a move as it offers a solution, for handling tax and accounting obligations within the country.
Why Infotree Global Solutions?
Hiring overseas is a demanding task. Infotree Global is the solution if your company is looking for global expansion. Our Global Payroll and Employer of Record services cater to the requirements of the company and help to gain a competitive edge in the global markets. A team of experts will be at your disposal to take care of all the in-country requirements of the business while abiding by the law. It will connect your company to the brightest talent from around the world which will help to grow your business exponentially.
Make the most of our professional services and overcome the challenges associated with international hiring. If you want to hire our Japan Employer of Record and need assistance, connect with us!
Frequently Asked Questions:
How does an employer of record work in Australia?
An Employer of Record (EOR) in Australia acts as a third-party entity that hires employees on behalf of a foreign company. It allows foreign companies to employ staff in Australia without establishing a local entity. The EOR takes on the legal responsibilities of employment, including payroll, tax compliance, and adherence to local Australian labor laws. The EOR is responsible for tax and legal purposes, while the employee works for the client company.The EOR manages employment contracts and compliance with the National Employment Standards (NES), and handles superannuation contributions and other employment-related tasks.
How to choose an EOR in Australia?
Selecting an EOR in Australia requires proper research and analysis of major aspects. It is essential to check their knowledge of Australian labor laws, tax obligations, and employee rights. Reviewing testimonials helps confirm their customer service quality. Ensuring a transparent pricing model is also crucial to avoid hidden fees during the employee hiring process.
How can an EOR help me comply with Australian employment laws?
Employer of Record in Australia can be invaluable in ensuring compliance with Australian employment laws. They have expertise in local labor regulations, tax requirements, and other legal obligations. By partnering with an EOR, you can be assured that your employment practices align with local standards, from drafting employment contracts to handling terminations. The EOR will also manage payroll, ensuring all tax and social security contributions are accurately calculated and paid on time. By working with an expert EOR, businesses can effectively minimize the risk of compliance issues.
What are the options for hiring a worker in Australia?
In Australia, workers can be hired as full-time employees, part-time employees, casual employees, or independent contractors. Full-time and part-time employees must receive a full range of benefits under Australian law, including paid leave and superannuation. Casual employees receive a higher hourly rate but fewer benefits. Independent contractors offer more flexibility but must be correctly classified to avoid legal issues.
How long does it take to set up a company in Australia?
Registering a company in Australia can be completed online in 15 minutes. After submitting the required documents and paying the fees, confirmation is typically received within two working days. Ongoing monthly activities such as payroll, tax filings, and ensuring adherence to ever-evolving regulations can add to the complexity. It’s essential to be well-prepared and possibly seek local expertise to navigate the process efficiently. Working with an EOR allows businesses to bypass the complexities of registration, manage compliance, and hire employees faster, as the EOR already has the legal framework in place.
Can I employ individuals as independent contractors in Australia?
Yes, it’s possible to hire individuals as independent contractors in Australia. However, this approach comes with its challenges. If an individual works predominantly or exclusively for your company, there’s a risk they could be viewed as an employee under Australian law, even if labeled as a contractor. Misclassifying an employee as a contractor can lead to legal repercussions, including fines. It’s crucial to clearly define the nature of the relationship and ensure that it aligns with the Australian Taxation Office (ATO) and other regulatory bodies.
What does HR compliance mean in Australia, and why is it important?
HR compliance in Australia ensures that your company’s HR practices and policies align with local employment laws and adhering to the Fair Work Act 2009, which governs employer-employee relationships and establishes minimum employment standards. It encompasses many areas, from hiring practices and employment contracts to working hours and termination procedures. Ensuring HR compliance is vital to protect the rights of employees and provide them with a safe and fair working environment. Failing to comply with these laws can result in legal disputes and financial penalties, making HR compliance essential for any business operating in Australia.
Can an employer of record run payroll in Australia?
Yes, an EOR is responsible for managing payroll in Australia for employees they hire locally. This includes calculating and withholding taxes, running payroll, onboarding, and managing employees. Entrusting these responsibilities to a professional EOR eliminates the need to worry about employee management and compliance.