Employer of Record Australia
Infotree Global Solutions provides the Australia Employer of Record services for companies looking to hire employees, 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.
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Hiring in Australia
Employment law in Australia mandates the minimum statutory standards and conditions as mentioned in the “Fair Work Act, 2009” legislation. The 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 who look forward to expanding their operations in the Australian market. But with an employer of record 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.
There should be a beforehand knowledge of the legal requirements in Australia like leave, permitted and holiday entitlement, and important pay that should be prior available before the offer letter. Making sure that business complies with minimum legal obligations, is crucial. For the employees, there are acts like the Privacy Act 1988 which regulates and protects the privacy of the employees by handling their details within privacy standards. There is the Australian Human Rights Commission Act 1986 that protects the employees from discriminatory behavior based on race, gender, religion, political views, medical record, criminal record, and union activities. While drafting a contract for hiring employees in Australia, the employer must be aware of the following points.
Working hours – In Australia, an employee can work up to 38 hours a week or 7.6 hours a day. The hour spread 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 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 yearly.
In Australia, an employee’s minimum wage is $19.84 per hour or $753.80 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 which are higher than the national minimum wage rate, including penalty rates and allowance if they are covered by a modern award or enterprise agreement. If an employee is not covered by a modern award or enterprise agreement, then the overtime pay depends solely upon employer discretion.
Overtime in Australia is considered as follows:
- Hours exceeding the first two or three hours of shift hours are paid at 150% of the normal hourly rate
- Any hour exceeding 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 leaves 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 upon the tenure of an employee. An extra week should be included if the employee is 45 years old or more and is 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 took 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 employee’s bonuses depending on their performance.
In Australia, employers need to comply with standards of employment entitlements for employees as mentioned under 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 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 parental paid leave which is paid at the national minimum wage rate, but the benefits will be granted by the employer only. The maternity leave will start six weeks before the birth of the child. In case of 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 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 their vacation.
Sick leave – Employees in Australia are eligible to get a total of ten days of paid personal or carer’s 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 doing any community service.
Challenges When Expanding into Australia
Setting up a subsidiary in a foreign land 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 the business. The employment environment is constantly changing, which makes it important for companies to be aware of the country’s payroll, tax, regulations, and legal formalities in employment.
Deciding upon 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.
Payroll in Australia
When you are looking for expanding 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 the 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 fortnightly basis. The retirement fund or superannuation is also taken care of, with employers contributing an amount equal to 9.5 % of their salary and this is for all the 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 an employer of record to ensure that all the necessary obligations are fulfilled and the income tax and other security concerns are duly processed. A foreign company setting up in Australia needs to take care of the tax requirements like the 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 27.5%
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 the employees.
Australian income tax rates for 2021/22 (residents)
|$0 – $18,200||Nil|
|$18,201 – $45,000||19 cents for each $1 over $18,200|
|$45,001 – $120,000||$5,092 plus 32.5 cents for each $1 over $45,000|
|$120,001 – $180,000||$29,467 plus 37 cents for each $1 over $120,000|
|$180,001 and over||$51,667 plus 45 cents for each $1 over $180,000|
Australia is very strict about its tax payments as any other country. Infotree Global as an Aussie Employer of Record makes sure that the company fulfills all those payments on time. They handle all the taxes, withholding, social security, and so on for you.
Benefits of Employer of Record in Australia
To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees or 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 worries.
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 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 – It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in Australia you need to be well aware of the payroll and taxation rules. With Australia Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
Diverse Solutions – No matter whether you already have a company in an international location or you are going to establish one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need of setting up a branch in Australia If your company is already operating, using EOR for managing payroll tasks can be a great idea as they can present an effective solution to tax and accounting responsibilities in 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!