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 13th 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.
Our guide below provides a comprehensive overview for hiring employees in Australia.
Monthly and Bi-monthly
Australian Dollar (AUD)
Taxes in Australia
Employer contributions in Australia
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:
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 completed 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$:
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.
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 1st 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.
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.
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
Computer consumables and stationery
Some other common forms of supplementary benefits in Australia include:
Life and disability insurance
Childcare centres and subsidies
Education advancement opportunities
Employee assistance programs (EAPs)
Fitness centre memberships
Types of leave available in Australia
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 in Australia vary by state, however Australians celebrate 7 national public holidays comprising of:
New Year’s Day
Anzac D ay
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 in Australia is provided by the Federal Government. Its entitlements include:
Paternity and partner 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.
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
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 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.
Termination of employment in Australia
Whether an employee chooses to leave a company or the employer decides to dismiss them, termination can occur for a variety of reasons.
Upon termination, the employee is typically expected to provide the employee with a written notice addressing their last day of employment (with some exceptions).
The notice can be given by:
Delivering it in person to the employee
Leaving it at the employee's last known address
Sending it by pre-paid post to the employee’s last known address
If the employee agrees, sending it electronically by email or text message
Alternatively, an employer can choose to let the employee work through their notice period, pay it out to them (known as pay in lieu of notice, or provide the employee with a combination of the two.
If the employer pays out the notice, they must pay the employee the full amount they would have received if they had worked through the notice period. This includes:
Incentive-based payments and bonuses
Any other separately identifiable amounts
The employment period also will end on the date that payment in lieu of notice is made.
The employee will stay employed for any part of the notice period that isn't paid out.
Notice during probation periods
If employment is terminated during an employee's probation period, they are entitled to receive or be paid out notice based on their length of service.
The employer is not entitled to provide any termination notice if an employee is terminated due to serious misconduct. They must, however, pay the employee any outstanding entitlements such as annual leave and in some cases, long service leave. The latter depends on the state or territory laws that govern the entitlement.
Examples of serious misconduct include:
Causing serious and imminent risk to the health and safety of another person or to the reputation or profits of their employer's business
Theft, fraud, assault, sexual harassment
Refusing to carry out a lawful and reasonable instruction that is part of the job
What are my options for hiring in Australia?
If you’ve got your sights set on expanding your business to Australia, a company like Airswift can help you get started. Our employment solutions are designed to ensure that you stay compliant across a range of local requirements including payroll, tax, working hours, and termination procedures.
Our in-country teams have the expertise needed to protect your business from unnecessary risk, freeing up headspace for you to focus on all the other exciting prospects of growing your business internationally.
To hire in Australia, some of the options you can explore with Airswift include:
Australia boasts a diverse and highly educated workforce, and our goal is to source and deliver the talent you need across a wide range of industries by leveraging our expertise and access to employee networks across the region.
Whether you’re looking to hire for an urgent project or need to cover a staffing shortage in your company, we believe that there is always a contractor for your business ‘needs. Our contract hire services are catered to businesses that need temporary hires to fulfil a variety of requirements.
For businesses with plans to hire candidates that can grow with the company, our professional search services give you access to highly skilled jobseekers that are ready to work. From shortlisting the candidates to screening and onboarding them, we take care of all the administrative processes for you.
Employer of Record
Hire employees without setting up a local entity. Working with an Employer of Record in Australia lets you do this and get up and running in as little as 72 hours. Once your Australian employee has been greenlit, we take care of everything ranging from onboarding and benefits management, to tax filings and time off.
Although the information provided has been produced from sources believed to be reliable, Airswift makes no warranties, whether express or implied, regarding the accuracy, adequacy, completeness, legality, or reliability of any information herein. Accordingly, there shall be no liability attached to theuse of the information herein, howsoever arising. For the latest information and specific queries regarding particular cases, please contact our team.
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