Hire and manage employees in Australia 

Employer of Record (EOR) vs. entity

If you don't already have an Australian entity, your first decision is how you'll employ people here: through an employer of record (EOR) or by setting up your own legal entity.

Legal entity in Australia. Setting up an entity means registering the business with the Australian Securities and Investments Commission (ASIC), getting an Australian Business Number (ABN), registering for PAYG withholding with the ATO, opening a local bank account, and engaging local experts on tax and employment law.

Australian EOR. An EOR is a third party that legally employs Australian workers on your behalf. It takes on the obligations of employment, including payroll, contracts, superannuation, and benefits, while you manage the day-to-day work.

The right choice depends on your resources, headcount, and plans to scale:

Whichever route you take, you'll collect each new employee's details before their first pay run: name, date of birth, start date, contact and bank details, and Tax File Number (TFN).

Classifying Australian workers: employees vs. contractors

Before you hire anyone, work out whether they'll be an employee or an independent contractor. Getting this right is the difference between smoothly running your Australian team and racking up serious fines and back payments.

Since 26 August 2024, the Fair Work Act defines employment based on the real substance, practical reality, and true nature of the working relationship. What the contract says still matters, but it's no longer the whole story. How the arrangement works day to day matters just as much. Contractors earning above the contractor high income threshold can opt out of this definition by giving their principal a written notice.

Here's how Australian law typically distinguishes between the two:

Misclassifying an employee as a contractor, known as sham contracting, carries civil penalties. 

Work permits and visas for Australian employees

Before the rest of the hiring process, confirm your prospective employee has the right to work in Australia. Australian citizens and permanent residents are covered automatically. Anyone else needs a visa with work rights.

Australia's skilled visa system changes regularly. The main visas for skilled foreign professionals currently include:

• Skills in Demand visa (Subclass 482): the employer-sponsored visa that replaced the TSS visa in 2024. It has three streams based on salary and occupation: Specialist Skills, Core Skills, and Labour Agreement. It runs up to four years and offers a pathway to permanent residency.

• Employer Nomination Scheme (Subclass 186): a permanent visa that requires a job offer from an Australian employer.

• Skilled Independent visa (Subclass 189): a points-tested permanent visa for skilled workers without an employer, state, or family sponsor.

• Skilled Employer Sponsored Regional visa (Subclass 494): for sponsored roles in regional Australia. It replaced the old Regional Sponsored Migration Scheme (Subclass 187), which is closed to new applicants.

• National Innovation visa (Subclass 858): an invitation-only permanent visa for people with an internationally recognised record of exceptional achievement. It replaced the Global Talent visa in 2024.

What to include in an offer letter in Australia

A clear, compliant offer letter sets the tone for the whole employment relationship. Here's a basic checklist of what to include in an offer letter and the employment agreement that follows it:

• Position, job description, and job duties

• Start date, working days, and working hours

• Probationary period

• Compensation and benefits

• Modern award or enterprise agreement coverage

• Annual leave policy

• Payment frequency

• Termination policy and notice periods

• Confidentiality and non-disclosure terms

• Non-compete and non-solicitation terms

• Contact information

NDAs and confidentiality agreements in Australia

Non-disclosure agreements (NDAs) are usually included as part of the employment agreement. A well-drafted NDA names the parties, defines exactly what information can't be disclosed, sets out when the NDA no longer applies, and covers confidentiality after the employee leaves.

In Australia, an NDA can protect information like trade secrets, proprietary technology, business plans and strategies, client and employee personal information, passwords, and anything else not intended for public consumption.

Running background checks on Australian employees

However eager you are to fill the role, don't skip the background check. In Australia, employers can request information about job applicants that's relevant to the position, including education verification, employment history, and social media checks, as long as the applicant consents.

Here are the most common checks, plus a few others you can consider:

New hire onboarding checklist

Once the offer is signed and the checks are done, it's time to onboard. This is your chance to lay the groundwork for a productive employment relationship, and a good onboarding experience goes well beyond the first day. Here's what to cover at each stage:

Before their first day

• Complete the background check

• Send the offer letter and employment agreement

• Collect their TFN declaration and super fund details

• Enrol them in benefits (if applicable)

• Add them to payroll

• Order and configure their devices

• Schedule their orientation

On day one

• Make sure their workspace and accounts are ready

• Send a welcome email

• Give them an agenda

• Set up a meeting with their onboarding buddy

• Give them an office tour (or a virtual one)

During their first 90 days

• Schedule training

• Assign work and help them set goals

• Schedule regular check-ins

• Ask for feedback on how to improve the experience

For the full list of onboarding must-haves, see our guide to new hire onboarding in Australia.

Paying employees in Australia

Whether you hire through an EOR or your own entity, you need a payroll setup that meets ATO requirements. That means software authorised to transmit Single Touch Payroll (STP) data to the ATO each time you run payroll. Rippling is a Digital Service Provider (DSP) certified by the ATO. You can check the ATO's register of certified DSPs for the full list.

Once your payroll solution is in place, running payroll comes down to a few core steps:

• Confirm your workers are correctly classified

• Collect employee information: name, date of birth, start date, contact and bank details, TFN declaration, and super fund choice

• Set the payment amount in AUD (or get written agreement from the employee to pay in another currency)

• Calculate withholdings and employer costs in line with statutory requirements

• Run payroll and report each pay event to the ATO through STP

These are the main withholdings and employer costs to account for:

The timing of super payments changed on 1 July 2026. Under Payday Super, employers must now pay superannuation every pay cycle, with contributions reaching the employee's fund within seven business days of payday. The old quarterly deadlines are gone, and the ATO's Small Business Superannuation Clearing House has closed. If your payroll setup can't handle per-cycle super, this is the rule that will catch you.

Mandatory employee benefits in Australia

Australia has a well-defined set of mandatory benefits, plus plenty of room to offer more. Here's what's required before you finalise the employment agreement:

• Superannuation. Australia's retirement system requires employers to contribute 12% of each employee's ordinary time earnings to their super fund, paid every pay cycle under Payday Super. Some contractors are also owed super.

• Annual leave. Full-time employees get a minimum of four weeks of paid annual leave per year (five weeks for some shift workers), pro-rated for part-time employees. It accrues continuously, carries over year to year, and is paid out on termination.

• Public holidays. A separate entitlement from annual leave. Employees get paid days off on public holidays, which vary by state and territory.

• Leave loading. Where a modern award or enterprise agreement provides for it, employees get an extra 17.5% on top of their base pay while on annual leave. Coverage depends on the specific award, so check the one that applies to your employees.

• Personal and compassionate leave. Full-time employees get 10 days of paid personal/carer's leave per year, for when they're ill or caring for an ill family member, plus two days of paid compassionate leave per occasion, for example when a family member dies or is seriously ill.

• Family and domestic violence leave. All employees, including casuals, are entitled to 10 days of paid family and domestic violence leave each year.

• Parental leave. Employees get up to 12 months of unpaid parental leave, with a right to request 12 more. On top of that, the government's Parental Leave Pay scheme provides up to 26 weeks of pay at the national minimum wage for children born or adopted from 1 July 2026 (24 weeks for children born or adopted in the year before that). It's government-funded and usually passed on through your payroll, and the ATO pays a 12% super contribution on it directly to the employee's fund.

• Long service leave. Employees who stay with the same employer for a long stretch, typically seven to 10 years depending on the state or territory, earn around two to three months of paid leave.

• Workers' compensation. Employers must hold insurance covering employees who are injured or become ill because of their work.

Complying with Australian labour laws

Australian employment law has moved quickly in the past few years, and the penalties for falling behind have grown with it. These are the essentials to keep in mind:

• The National Employment Standards (NES). The NES set out the minimum entitlements every employee gets, covering maximum weekly hours, leave, public holidays, notice of termination, superannuation, and more. No contract or agreement can undercut them.

• Modern awards and enterprise agreements. Most Australian employees are covered by a modern award or an enterprise agreement, legal instruments that set minimum pay and conditions above the NES, organised by industry and occupation. Identifying the right award for each role is one of the most common compliance traps for new employers.

• No at-will employment. Australia doesn't recognise at-will employment. You can only dismiss without notice for serious misconduct, and unfair dismissal protections apply. More on that below.

• Wage theft is now a crime. Since 1 January 2025, intentionally underpaying wages or entitlements is a Commonwealth criminal offence, carrying up to 10 years' imprisonment for individuals and fines for companies of up to three times the underpayment or more than $9M, whichever is greater. Honest mistakes are handled under the civil regime, which has its own six-figure penalties per contravention.

• The right to disconnect. Employees can refuse to monitor or respond to work contact outside their working hours, unless the refusal is unreasonable. This now applies to employers of every size, including small businesses.

• New casual employment rules. A new definition of casual employment took effect in August 2024, and casual employees now have a pathway to convert to permanent employment if their work pattern supports it.

• A positive duty on sexual harassment. Employers must take reasonable and proportionate measures to eliminate sexual harassment and sex discrimination at work as far as possible, going beyond simply responding to complaints.

Terminating employees in Australia

Employees in Australia can only be dismissed for valid reasons: unsatisfactory performance, misconduct, or genuine redundancy. Dismissal without notice is reserved for serious misconduct. Your employment contracts should spell out the terms of dismissal, including notice periods.

Full-time and part-time employees are entitled to a minimum notice period based on their length of service:

Employees over 45 who have at least two years of continuous service get one extra week of notice. Redundancy pay applies on top under the NES, scaled to length of service, and eligible employees can bring unfair dismissal claims once they've served the minimum employment period (six months, or 12 months for small businesses).

Getting termination wrong is expensive. Civil penalties for breaching the Fair Work Act run to six figures per contravention for companies, and the amounts are indexed each year.

Managing remote employees’ computers and apps

Your Australian employees need the apps, tools, and access your company runs on, and you need a way to manage all of it from wherever you are. Remote work makes that harder, from shipping devices to configuring and updating them from afar.

With Rippling, you can set up and secure employee accounts with the right access and permissions from day one, and manage every employee app, like Google Workspace and Slack, from a single place, including disabling them all when someone leaves.

Protecting company IP in Australia

Giving new employees access to sensitive company information carries risk if you don't take the proper precautions. Clarify IP protections in the employment agreement: who owns the IP the employee creates, who can use it commercially, and how trade secrets stay confidential.

IP Australia, a government agency, administers rights and legislation for:

• Trademarks: used to protect and distinguish a company's brand.

• Patents: used to stop third parties from profiting off an invention.

• Design rights: used to protect the appearance of commercial products.