Employer of Record in Australia

An Employer of Record (EOR) in Australia legally employs workers on your behalf. This means you can hire talent in Australia without setting up a local entity. An EOR handles all the legal and HR responsibilities that come with employment. They manage payroll, taxes, benefits, and compliance with Australian labor laws. Think of them as your local HR team. This lets you focus on managing your team's day to day work. If you need an EOR in Australia, providers like Rivermate can help.

How an Employer of Record (EOR) Works in Australia

Using an EOR in Australia simplifies hiring. The process is straightforward.

• You Find the Talent: You recruit and select the best candidate for your team.
• The EOR Hires Them: The EOR legally hires the employee in Australia under their local business entity.
• Onboarding: The EOR manages the entire onboarding process. This includes drafting a compliant employment contract and setting up payroll.
• HR and Payroll Management: The EOR handles all administrative tasks. They process salaries, manage taxes, and provide statutory benefits.
• You Manage Your Employee: You manage your employee’s daily tasks and responsibilities. The EOR takes care of the HR and legal aspects of employment.

Why use an Employer of Record in Australia

Using an EOR in Australia makes expanding your team simple and fast. It removes the major hurdle of setting up a legal entity, which can be a complex and time consuming process. This allows you to enter the Australian market and hire talent quickly.

Here are some key benefits:

• Faster Market Entry: You can hire employees in days, not months. This gives you a competitive edge.
• Compliance with Local Laws: EORs are experts in Australian labor law. They ensure your hiring practices are fully compliant with national and state regulations. This includes complex areas like superannuation and workers' compensation.
• Reduced Administrative Burden: An EOR takes care of all HR tasks. This frees up your time to focus on your core business goals.
• Cost-Effective: Setting up a legal entity in Australia is expensive. An EOR provides a more affordable alternative for hiring employees.
• Access to Better Benefits: EORs can often provide more competitive benefits packages for your employees. This helps you attract and retain top talent.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Australia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Australia.

Hiring in Australia is a great way to tap into a skilled and diverse workforce. The job market is strong, with many opportunities across various industries. You'll find that recruitment methods are modern, with a heavy reliance on online platforms and social media to find the right talent. For many businesses, hiring employees on permanent or ongoing contracts is the most direct approach. It's important to have a clear and fair hiring process, which typically involves interviews and a formal job offer.

Employment contracts & must-have clauses

When you hire an employee in Australia, you need a written employment contract. This document sets out the terms and conditions of employment and helps avoid misunderstandings. While verbal agreements can be legally binding, a written contract is always the best practice.

Your employment contract should include several key clauses to protect both you and your employee:

• Position and Duties Clearly state the job title, responsibilities, and performance expectations.
• Type of Employment Specify if the role is full-time, part-time, or casual.
• Remuneration Detail the salary, any bonuses, and superannuation contributions.
• Hours of Work Outline the expected working hours and any overtime arrangements.
• Leave Entitlements Include details on annual leave, personal leave, and any other leave entitlements as per the National Employment Standards (NES).
• Confidentiality and Intellectual Property Protect your business's sensitive information and clarify ownership of any work created.
• Termination Explain the notice period required for both parties to end the employment relationship.

Probation periods

A probation period is a trial phase at the start of employment, usually lasting between three to six months. It allows you and your new employee to decide if the role is a good fit. During this time, you can assess their performance and cultural fit within your company.

Employees on probation have the same rights and entitlements as permanent employees, including:

• Minimum wage
• Leave accrual
• A safe working environment.

If things don't work out, you can terminate the employment during the probation period. However, you must still provide the required notice period.

Working hours & overtime

In Australia, the standard full-time working week is 38 hours. You can ask employees to work reasonable additional hours, but they have the right to refuse if the request is unreasonable.

Overtime pay is typically calculated at a higher rate. The exact rate depends on the industry award or enterprise agreement. Common overtime rates are:

• 150% of the normal hourly rate for the first two hours.
• 200% of the normal hourly rate after the first two hours.

Employees are also entitled to rest breaks during the workday and a minimum break between shifts.

Public & regional holidays

Australia has national public holidays that apply to everyone. Each state and territory also has its own public holidays.

National Public Holidays

• New Year's Day
• Australia Day
• Good Friday
• Easter Monday
• Anzac Day
• Christmas Day
• Boxing Day.

Here is a list of some of the additional public holidays for each state and territory:

Hiring contractors in Australia

Hiring independent contractors can be a flexible and cost-effective way to access specialized skills for specific projects. Contractors are responsible for their own taxes and superannuation, and you don't provide them with leave entitlements.

It's crucial to have a clear contract that outlines the scope of work, payment terms, and intellectual property ownership. If the contract doesn't state otherwise, the contractor will own the intellectual property of the work they create.

A major risk when hiring contractors is misclassification. This happens when a worker is treated like an employee but is classified as a contractor. Misclassification can lead to significant penalties, including back payment of wages and taxes.

An Employer of Record (EOR) can help you mitigate this risk. An EOR takes on the legal responsibility for your workers, ensuring they are classified correctly and that you comply with all local labor laws. This gives you peace of mind and allows you to focus on growing your business.

Navigating compensation and payroll in Australia means understanding a structured system designed for fairness. It's a mix of national standards and industry-specific rules that every employer needs to get right. This system covers everything from how much you pay your employees to how often you pay them. Getting it wrong can lead to penalties, so it’s important to understand the basics from the start.

Payroll cycles & wage structure

You have flexibility in how often you pay your team. Common payroll cycles in Australia include:

• Monthly: Paying employees once a month.
• Bi-weekly: Paying employees every two weeks on a set day.

An employee's pay is more than just their base salary. The wage structure can include several components:

• Salary: A fixed regular amount.
• Hourly wage: Pay based on the number of hours worked.
• Allowances: Extra payments for specific needs like travel or uniforms.
• Bonuses: Additional pay for reaching specific goals.

Overtime & minimums

Australia has a national minimum wage that is reviewed each year. As of July 2023, the national minimum wage is $23.23 per hour. However, many jobs fall under specific industry "awards" that set higher minimum pay rates.

A standard work week is 38 hours. If an employee works more than these hours, you generally need to pay them overtime. Overtime rates are typically:

• 150% of the employee's normal rate for the first three hours.
• 200% for any work after that.

Employees may also get higher pay, known as penalty rates, for working on weekends, public holidays, or late at night.

Employer taxes and contributions

As an employer, you are responsible for several contributions and taxes on behalf of your employees.

Employee taxes and deductions

The main deduction from an employee's pay is income tax.

In Australia, providing employee benefits and leave is a fundamental part of business. It's not just about staying compliant with the law; it's about attracting and keeping great people. The system is a mix of government-mandated leave and benefits, and extra perks that you can offer to stand out as an employer. For employees, these benefits provide financial security, support health and wellbeing, and promote a healthy work-life balance.

Statutory leave

Australia's National Employment Standards (NES) set the minimum leave entitlements for employees. These are legal requirements.

• Annual Leave Full-time employees get four weeks of paid annual leave per year. Some shift workers are entitled to five weeks. This leave starts accruing from the first day of work.
• Personal/Carer's Leave This is 10 days of paid leave per year for when an employee is sick or needs to care for an immediate family member. Unused leave can be carried over to the next year.
• Parental Leave Eligible employees can take up to 12 months of unpaid parental leave. They can also request an additional 12 months. The government may provide paid parental leave.
• Long Service Leave After a long period of continuous service with the same employer, employees are entitled to an extended period of leave. The length of service required varies by state and territory, typically between 7 and 15 years.
• Community Service Leave This is unpaid leave for activities like jury duty or voluntary emergency management activities.

Public holidays & regional holidays

Australia has national public holidays, and each state and territory has its own additional holidays.

Typical supplemental benefits

To attract and retain talent, many employers offer benefits beyond the legal minimums.

How an EOR can help with setting up benefits

Setting up employee benefits in Australia can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your Australian team. They handle all the administrative tasks, including payroll, taxes, and benefits. This means you can be sure you are compliant with all national and state-level laws without needing to be an expert in Australian employment regulations.

An EOR can:

• Ensure you provide all mandatory benefits.
• Administer both statutory and supplemental benefits.
• Manage payroll and superannuation contributions.
• Keep you updated on any changes to employment laws.

Using an EOR allows you to offer competitive benefits and attract top talent in Australia, all while saving you time and reducing risk.

When an employee leaves your company in Australia, the process is more than just a farewell. It involves legal steps to ensure a smooth and compliant exit. This process, known as offboarding, covers everything from the final notice to the last paycheck. Getting it right protects your business and treats your departing team member with respect.

Notice Periods

In Australia, you must give employees written notice before their employment ends. You can't just tell them it's their last day. The legal minimum notice period is set by the National Employment Standards (NES).

The amount of notice depends on how long the employee has worked for you continuously.

Employees over 45 years old who have worked for you for at least two years get an extra week of notice.

You can let the employee work through their notice period. Or, you can pay them in lieu of notice. This means you pay them what they would have earned during that time, and their employment ends immediately.

These rules do not apply if you are terminating an employee for serious misconduct. In that case, you don't have to provide notice.

Severance Pay

In Australia, severance pay is called redundancy pay. It applies when you make a role redundant, meaning the job no longer needs to be done by anyone. This is not for employees terminated for performance or conduct reasons.

To be eligible for redundancy pay, an employee must have been with your company for at least 12 months. Casual employees are not eligible.

The amount of redundancy pay is based on the employee's length of service. This payment is separate from their final pay, which includes wages and unused leave.

Here are the minimum redundancy payments required by law:

This payment is calculated using the employee's base rate of pay and does not include bonuses, allowances, or overtime. A portion of the redundancy payment is tax-free.

How Rivermate Handles Compliant Exits

Navigating Australian employment law can be tricky. The rules for termination, notice, and final payments are specific. Mistakes can lead to legal claims.

We handle the entire offboarding process for you.

• We ensure compliance. We manage all termination requirements according to the Fair Work Act and the National Employment Standards. You don't have to become an expert in Australian labor law.
• We calculate final pay. We accurately calculate all final entitlements. This includes notice in lieu, redundancy pay, and unused leave.
• We manage the paperwork. We prepare all the necessary documentation for a clean exit. This reduces your risk and ensures a smooth process for your departing employee.

Using Rivermate means you can manage employee exits with confidence. We take care of the complex details so you can focus on your business.

Navigating Australia's visa and work permit system can feel complex. The government offers a range of visa options for individuals who want to work in the country, from temporary to permanent stays. Each visa has specific requirements you must meet. Understanding which visa applies to your situation is the first step. The process often involves skill assessments, English language tests, and health and character checks.

Employment visas & sponsorship realities

An Employer of Record (EOR) can sponsor skilled workers for certain visas, but it's not a simple process. Sponsorship is a significant commitment with strict legal obligations.

Here are the main visas an EOR can potentially sponsor:

• Temporary Skill Shortage (TSS) visa (subclass 482) This is the most common sponsored work visa. It allows employers to bring in skilled workers to fill labor shortages.
• Employer Nomination Scheme (ENS) visa (subclass 186) This visa provides a path to permanent residency for skilled workers.
• Skilled Employer Sponsored Regional (Provisional) visa (subclass 494) This visa is for skilled workers who are willing to work in regional Australia.

What this means for you:

Securing a sponsored visa through an EOR depends on several factors. Your occupation must be on the relevant skilled occupation list. You also need to have the required skills and experience for the role. Not every job or candidate will be eligible for sponsorship. The EOR must be an approved sponsor with a solid track record.

Business travel compliance

If you are visiting Australia for short-term business activities, you need the right visa. It is important to understand the rules to avoid any issues.

Here are the common options for short-term business travel:

• Visitor visa (subclass 600) Business Visitor stream This visa is for business-related visits of up to three months. Permitted activities include attending conferences, negotiations, and meetings. You cannot work on this visa.
• Temporary Work (Short Stay Specialist) visa (subclass 400) This visa is for short-term, highly specialized, non-ongoing work. It is typically granted for up to three months but can be extended in some cases.

Staying compliant:

Always be clear about the purpose of your visit. Performing work outside the scope of your visa can lead to serious consequences, including visa cancellation and future travel bans. Ensure you have the correct visa before you travel.