Guide to hiring employees in Australia

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Source: Shutterstock/ Taras Vyshnya

Employment trends and job market analysis in Australia

Australia is an optimal destination for businesses that want to expand globally. With a predominantly English-speaking population, it has an open economy that ranks 12^th in the world by GDP and strong trade links.

It also sits in close proximity to powerhouse markets in the Asia Pacific region and has a rich spread of natural resources such as timber, petroleum, and natural gas. All of this has historically attracted healthy foreign investment and is supported by a well-educated workforce population of 13,599,300.

Since 2020, the Australian mining industry has experienced interesting recruitment trends influenced by various factors such as technology, commodity prices, and project development fluctuations.

Strong demand is expected for professionals with expertise in coal (especially metallurgical coal), iron ore, gold, copper, and other hard rock commodities, particularly in remote locations. Leadership and specialised technical professionals are in short supply but highly sought after. The growing role of technology and innovation drives demand for professionals with a proven track record in implementing technology within the industry.

While there is a positive outlook for recruitment, staffing needs vary widely among organisations, with some seeking international candidates to fill skill shortages.

Our guide below provides a comprehensive overview for hiring employees in Australia.

Capital	Canberra
Languages spoken	English
Population size	27.10 million
Payroll frequency	Monthly and Bi-monthly
Currency	Australian Dollar (AUD)
GST	10%

Taxes and payroll in Australia

Employer contributions in Australia

Payroll tax

Payroll tax in Australia is levied on the wages paid to employees in Australia by the employer. As it is not a federal tax, the pay rates and threshold amounts vary from state to state. The table below summarises the current pay rates and thresholds for all the states and territories within Australia:

STATE/TERRITORY	THRESHOLD	PAY RATE
New South Wales	$1200,000	4.85%
Victoria	$650,000	4.85%
Queensland	$1300,000	4.75% to 4.95%
South Australia	$1500,000	0 to 4.95%
Western Australia	$1000,000	5.5% to 6.5%
Tasmania	$1250,000	4% to 6.1%
Australian Capital Territory	$2000,000	6.85%
Northern Territory	$1500,000	5.5%

Superannuation

Also referred to as Super, this is s a retirement pension benefits fund for all employees in Australia. As if 2022, employers contribute 10.5% of an employee’s ordinary time earnings (OTE) if they are over 18 years of age or under 18 years of age but work more than 30 hours weekly. Superannuation is set to go up by 0.5% each year until 2025.

Employee taxes in Australia

Personal income tax

The amount of income tax paid by employees in Australia depends on how much they earn. For residents in Australia, the initial AUD$ 18,200 they earn is exempted from tax. Upon completing their tax file number (TFN) declaration, an employee can claim a tax-free threshold.

The table below illustrates the complete list of tax rates Australian residents must pay in AUD$:

INCOME	TAX RATE
$18,2000 and below	Exempted
$18,201 to $45,000	19 cents for each $1 over $45,000
$45,001% to $120,000	$5,092 plus 32.5 cents for each $1 over $45,000
$120,001 to $180,000	$29,667 plus 37 cents for each $1 over $120,000
$180,001 and over	$51,667 plus 45 cents for each $1 over $180,000

Medicare

Medicare is a national insurance scheme that provides free or subsidised healthcare for Australians. The Medicare levy consists of 2% of an Australian resident’s taxable income and must be paid in addition to their personal income tax. Some employees can get a reduction or exemption depending on their personal circumstances.

What are the labour laws to be aware of in Australia?

Expanding a business to Australia requires a good understanding of the country's labour laws to ensure compliance and successful operations. Here are some key labor laws and regulations to be aware of:

Fair Work Act 2009

This is the primary legislation governing employment and workplace relations in Australia. It covers various aspects of employment, including minimum wage, working hours, leave entitlements, and unfair dismissal.

National Employment Standards (NES)

Part of the Fair Work Act, the NES sets out 10 minimum employment entitlements for most employees, including maximum weekly working hours, annual leave, personal/carer's leave, compassionate leave, public holidays, and more.

Employment contracts

Written employment contracts are essential and should clearly outline terms and conditions of employment, including job responsibilities, remuneration, working hours, leave entitlements, and notice periods for termination.

Unfair dismissal and termination

The Fair Work Act provides protection against unfair dismissal for eligible employees. Employers need to follow fair and valid procedures when terminating employees and must have a valid reason for the termination.

Anti-discrimination laws

Australia has strict laws against workplace discrimination based on factors such as race, gender, age, disability, sexual orientation, and more.

Health and safety

Employers have a legal obligation to provide a safe and healthy work environment for employees. The Work Health and Safety Act 2011 outlines the requirements for workplace health and safety.

Workplace bullying and harassment

Employers are responsible for preventing and addressing workplace bullying and harassment. Adequate policies and procedures must be in place to address such issues.

Enterprise agreements

Some businesses operate under enterprise agreements negotiated between employers and employees or their representatives. These agreements can set out terms and conditions of employment that might differ from the standard.

Minimum wage in Australia

The minimum wage in Australia is currently set at AUD$21.38 per hour (AUD$812.44 per week). This figure was revised on 1^st July 2022.

Working hours in Australia

Employees can work a maximum of 38 hours in a week. Time worked outside the spread of ordinary hours can attract overtime rates.

man working from home on a laptop while carrying his toddler daughter

Employee benefits in Australia

Australia has one of the most comprehensive benefits schemes and therefore, there are many laws in place designed to uphold its integrity. Regulations tend to vary by state making it crucial for employers to understand both the federal and state laws that govern the location a company operates in.

Mandatory benefits in Australia

Apart from Medicare and Superannuation, Australian employees are also entitled to:

Workers’ compensation insurance

This is designed to protect workers during work-related injuries. Premiums make up a percentage of the employee’s pay and are based on factors such as claim history, industry, and remuneration. Employers are expected to purchase this form of insurance for employees in each state and territory in which they are based.

Flexible work

Under Australia’s Fair Work Act, some employees have a legal right to request for flexible work arrangements once they have provided an employer with a continuous 12 months of work.

Supplementary benefits in Australia

Offering employees benefits beyond the status quo shows that your company is invested in their well-being. Supplementary benefits should be designed to reflect the current state of your employees' needs and provide them with additional support for their everyday living expenses.

For example, the Australian Taxation Office (ATO) has recently made it possible for eligible employees to claim work from home expenses when filing their tax returns.

These deductions include:

Electricity expenses on heating, cooling and lighting
Decline in value of home office furnishings
Cleaning
Personal phone
Internet
Computer consumables and stationery

Some other common forms of supplementary benefits in Australia include:

Group insurance
Life and disability insurance
Health insurance
Childcare centres and subsidies
Education advancement opportunities
Employee assistance programs (EAPs)
Commuter allowance
Stock options
Fitness centre memberships

woman sitting at her desk and stretching

Types of leave available in Australia

Annual leave

Full-time employees in Australia are entitled to four weeks of paid annual leave per year. Shiftworkers can get up to five weeks of annual leave per year.

Public holidays

Public holidays in Australia vary by state, however Australians celebrate 7 national public holidays comprising of:

New Year’s Day
Australia Day
Good Friday
Easter Monday
Anzac Day
Christmas Day
Boxing Day

Personal leave

Sick and carer’s leave come under the same entitlement in Australia. According to the National Employment Standards, the yearly entitlement is based on an employee's hours of work and is 10 days for full-time employees and pro-rata for part-time employees.

Sick leave is accumulated during each year of employment and begins from an employee's first day of work. It is based on their ordinary hours of work and any balance at the end of the year is carried forward to the next.

Sick and carer's leave accumulates when an employee is on:

Paid leave such as annual leave and sick and carer's leave
Community service leave including jury duty
Long service leave

Sick and carer's leave doesn’t accumulate when the employee is on:

Unpaid annual leave
Unpaid sick or carer's leave
Unpaid parental leave
Unpaid family and domestic violence leave

Parental leave

Parental leave in Australia is provided by the Federal Government. Its entitlements include:

Maternity leave
Paternity and partner leave
Adoption leave
Special maternity leave
A safe job and no safe job leave

All employees are entitled to up to 12 months of unpaid parental leave. Employees who are the primary caregiver of a newborn or newly adopted child can apply for 18 weeks of paid parental leave (PLP) by applying to Australia’s federal government parental leave pay scheme.

The PLP payment system is managed by Services Australia.

Compassionate and bereavement leave

Employees are entitled to up to two days of compassionate leaver at any time when:

A member of their immediate family or household dies, or contracts or develops a life-threatening illness or injury
A baby in their immediate family or household is stillborn
They have a miscarriage
Their current spouse or de facto partner has a miscarriage

Family and domestic violence leave

Full-time, part-time, and casual employees in Australia are entitled to five days of unpaid family and domestic violence leave per year. This entitlement comes from the National Employment Standards (NES).

Long service leave

Long service leave is granted to employees who have provided a long period of continuous service to an employee.

Long service leave entitlement is determined by each state or territory’s jurisdiction that is centered around:

How long an employee has to work to qualify for long service leave
How much leave the employee receives

STATE/TERRITORY	LONG SERVICE LEAVE ENTITLEMENTS
New South Wales	Employees are entitled to two months (8.6667 weeks) of long service leave upon completing 10 years of continuous service after the initial 10, employees are entitled to a further month of long service leave.
Victoria	Employees are entitled to an amount of long service leave on ordinary pay equal to 1/60th of the period of continuous employment after completing a minimum of 7 years’ continuous service with their employer.
Queensland	Employees are entitled to eight and two-thirds weeks of leave after a period of 10 years’ of continuous employment. Beyond 10 years, they are entitled to an additional 4.333 weeks of leave for each additional five years of continuous service.
South Australia	Employees are entitled to 12 weeks of long service leave upon 10 years of continuous employment. They are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years.
Western Australia	Employees are entitled to eight and two-thirds of leave after 10 years of continuous employment. They are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years.
Tasmania	Employees are entitled to eight and two-thirds weeks of long service leave upon the completion of 10 years of continuous service. They are entitled to four and one-third weeks for each additional five years of service after the initial 10 years.
Australian Capital Territory	Employees are entitled to just over six weeks of leave upon completion of seven years of continuous service. For each subsequent year of service, employees accrue a further one-fifth of a month of long service leave.
Northern Territory	Employees are entitled to 13 weeks of leave upon completion of 10 years of continuous employment. They are entitled to an extra 1.3 weeks of long service leave for each additional year of service following the initial 10 years which can only be taken after an additional five years’ service.

Community service leave

An employee is eligible for community service leave while they are engaged in activities such as volunteer emergency management or jury duty. There is no limit on the amount of community service leave an employee can take.

A voluntary emergency management activity is described as any of the following:

It involves dealing with an emergency or natural disaster
The employee engages in the activity on a voluntary basis
The employee was either requested to engage in an activity, or it would be reasonable to expect that such a request would have been made if circumstances had permitted, and
The employee is a member of or has a member-like association with a recognised emergency management body.

Attracting talent when hiring employees in Australia

The pandemic forced employees around the world to reevaluate their perspective on work and for many, they realized that their jobs were depriving them of the work-life balance that work from home arrangements suddenly familiarised them with.

According to Lifeworks’ Mental Health Index, 33% of employees in Australia believe that flexible working is one of the most important things a company can do to support their mental health. 60% of the employees surveyed, even prioritise it over career progression.

To attract top talent in Australia, employees need to up their game and rethink their employee value proposition so that it reflects the needs of an evolving workforce. It’s time for organisations to act and provide their employees with experiences and resources that go beyond a transactional exchange.

Attractive remuneration and reward schemes

This includes salary and other financial incentives such as bonuses, extra allowances, and employee stock options. According to PWCs Future of Work survey, this ranked as the most desired EVP amongst Australian workers.

With more attention being paid to gender and race-related wage gaps in the workplace, there is a growing call for pay transparency in order to achieve pay equity. Now more than ever, it is important for companies to clearly communicate their compensation packages and ensure that what they’re offering is equally distributed and that variances are justifiable.

Wellbeing in the workplace

Employees today expect a lot more from the companies they work for and the ones that respond in kind will stand to retain and attract a happier, more committed workforce.

Now is the time for businesses to review their efforts in providing employees with the resources they need to prioritise their wellbeing. This includes enabling more flexibility surrounding how and where work is done, creating safe, judgement-free spaces for employees to speak openly, offering access to support systems and programs for mental health needs.

Personal and professional development

Creating opportunities and clear pathways for employees to grow in their career. 74% of employees say that they are more likely to apply to a job if the ad promotes career progression. It’s important for employees to feel that they have direction and a clear sense of where their job is taking them.

Companies that equip them with the resources to do so, such as mentorship programs, leadership training, and upskilling opportunities will be able to retain and draw in workers who are enthusiastic and goal oriented.

woman in an office setting being interviewed by two people

What are the employee rights in Australia?

In addition to the key labour laws mentioned earlier, employees in Australia have various rights and entitlements that are protected under the Fair Work Act and other relevant legislation. Here are some important employee rights in Australia:

Protection against unfair dismissal

Eligible employees have the right to protection against unfair dismissal. Employers must have a valid reason for termination and follow a fair process.

Protection against workplace discrimination

Employees are protected against discrimination based on factors such as race, gender, age, disability, sexual orientation, and more. Discrimination can occur during recruitment, employment, and termination.

Minimum wage

As mentioned above, employees have the right to be paid at least the minimum wage as determined by the Fair Work Commission. This ensures that workers receive a fair wage for their work.

Working hours and breaks

Employees have the right to reasonable working hours and breaks during their shifts. The Fair Work Act sets out guidelines for maximum weekly working hours and rest breaks.