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SALARY PAYMENT IN Australian Dollar (AUD $)
CONTRACT LANGUAGE English
PAYROLL TAX15.85%
PAYROLL CYCLE Weekly or bi-weekly
TIME TO HIRE 12 hours
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Hire and pay talents
with Horizons in
180+ countries
Australia
Horizons ensures day-to-day guidance to help your business navigate Australian labor laws and regulations. Horizons also ensures payroll is processed weekly or fortnightly (the standard periods in Australia), and that taxes are withheld as required. As the Australia Employer of Record, Horizons is responsible for employee income tax withholding, payment of payroll taxes to state authorities, and submission of tax returns to the Australian Tax Office. Partnering with our Australia PEO is the quickest and most cost-effective way to enter the Australian market.
| PEO Platform Hire in Australia, and pay employees through our platform or app. | PEO Cost Our Australia PEO solution is the most affordable on the market. | Time-to-hire Fast onboarding in Australia, hire in as little as 12 hours. |
| Contracts We draft labor contracts compliant with Australian labor law. | Local Benefits We administer all mandatory benefits and contributions in Australia. | 180+ Countries It doesn’t stop with Australia — we are an international PEO |
It is crucial that all businesses hiring employees in Australia comply with applicable tax and labor laws. This includes laws relating to employment contracts, minimum employment rights, labor law and payroll/employment taxes.
Horizons is licensed to provide labour hire services in all states and territories that require it, including Queensland, Victoria and the Australian Capital Territory (ACT).
Australia’s National Employment Standards provide multiple mechanisms for employing staff in Australia, depending on the industry. These options include an award, enterprise agreement, or employment contract.
Awards include the minimum standards of employment and outline the rules and conditions for all employees within a certain industry. These cover the basic rate of pay, type of employment, rates for overtime work, annual salary, allowances, redundancy, and stipulations surrounding leave, resignation, and termination.
Enterprise agreements state the working conditions for a group of employees with one employer (a ‘single-enterprise agreement’) or multiple employers (a ‘multiple-employer agreement’.
It is also possible for businesses to establish an enterprise agreement before any employees are onboarded. This is known as an ‘greenfields enterprise agreement’ and is negotiated between the business and union representatives.
Written contracts are traditionally used for employees who do not qualify for an enterprise agreement or award. Contracts should include the employee’s job responsibilities, their pay rate, expected weekly hours, and entitlements for taking leave.
By partnering with our Australia PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
| Probationary period | 6 months |
| Termination notice period | 1 week notice: 0 – 1 year of employment 2 weeks notice: 1 – 3 years’ employment 3 weeks notice: 3 – 5 years’ employment 4 weeks notice: 5+ years’ employment +1 week if the employee is aged 45 with >2 years’ employment |
| Severance | Only in cases of termination due to business-related reasons 4 – 12 weeks’ salary, depending on years of service |
| Important note | Early dismissal or resignation is not possible – only mutual agreement or extraordinary circumstances. |
| Probationary period | 6 months |
| Termination notice period | 1 week notice: 0 – 1 year of employment 2 weeks notice: 1 – 3 years’ employment 3 weeks notice: 3 – 5 years’ employment 4 weeks notice: 5+ years’ employment +1 week if the employee is aged 45 with >2 years’ employment |
| Severance | Only in cases of termination due to business-related reasons 4 – 12 weeks’ salary, depending on years of service |
Quick, compliant hiring in 12 hours—no subsidiary required.
| Date | Holiday name |
|---|---|
| 1 Jan Sunday | New Year’s Day |
| 26 Jan Thursday | Australia Day |
| 7 Apr Friday | Good Friday |
| 10 Apr Monday | Easter Monday |
| 25 Apr Tuesday | ANZAC Day |
| 25 Dec Monday | Christmas Day |
| 26 Dec Tuesday | Boxing Day |
Australia’s Pay-as-You-Go tax system requires employers to withhold employee income taxes and remit them to the government. Payroll taxes may be imposed on wages, superannuation, and other employment benefits. These taxes are levied by individual states and territories are not considered a federal tax. As such, the tax rate varies by region.
Employers must contribute an amount equal to 10% of their employee’s gross salary each quarter into a superannuation (retirement) fund for all employees who earn more than AUD $450 per month.
Additionally, employers in Australia who offer fringe benefits must pay a fringe benefit tax on the value of these benefits. Fringe benefits include a company vehicle, parking, free private health insurance, and other benefits. A laptop or cell phone for business use does not incur a fringe benefit tax.
In Australia, female employees are entitled to a set period of 12 week’s paid maternity leave, which is provided by the federal government as part of Australia’s public healthcare system. This amount is paid at the national minimum wage and must be taken in one continuous period.
In addition, female employees are entitled to to up to 30 days of ‘flexible’ paid parental leave. This need not be taken continuously, and should be negotiated with the employer.
To receive full maternity leave benefits, a woman must be the primary caregiver of a newborn child or a child they have recently adopted. Employees must have also been employed with the same company for at least 10 of the previous 13 months. Additionally, employees need to meet local residency requirements, earn less than $150,000 in the preceding fiscal year, and not return to work during the period in which they are receiving maternity leave.
Spouses or partners of the female employee on maternity leave are entitled to two week’s paid leave. This is paid for by the government, so long as the employee is not already receiving paid leave from their employer. It is also paid at the national minimum wage.
In addition, employees are entitled up to 12 months unpaid parental leave.
Employers are required to provide staff members with notice if they plan to sever the employment relationship. This must include the minimum statutory notice, which depends on the employee’s length of service.
Employees are eligible to file an unfair dismissal application if they are covered by the national workplace relations system and have been employed for the minimum employment period. If the employer is a small business with less than 15 employees, the minimum employment period is one year. Otherwise, the minimum employment period is six months. Employees must be covered under an enterprise agreement or award. Additionally, the employee’s annual income must be beneath the income threshold.
If the application is successful, the employee may be reinstated. If reinstatement is not appropriate, compensation of up to six month’s pay may be ordered.
Severance payments may occur if an employer experiences redundancy. If an employer has decided that it no longer wants an employee to perform a particular job and terminates employment, the job becomes redundant. When redundancy occurs, severance payments may be required. Redundancy occurs when:
Severance pay is not mandatory if:
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Australia PEO can mitigate risk for foreign companies and provide guidance through this process.
The minimum wage in Australia is AU $20.33 per hour (or $722.60 per week for a fulltime worker). This applies to all employees over 21 years old. Australia’s Pay and Classification Scale has an overview of the different pay rates across various states. If a certain position is not featured on the scale, an employee must receive the national minimum wage.
Compensation laws in Australia also stipulate a maximum work week of 38 hours. However, some positions will have greater flexibility to work extended hours.
Employees must receive a payslip within one working day of being paid. In most cases, pay is deposited into an employee’s bank account.
| Minimum Wage Country Comparison Chart | (Per month in USD) |
| Switzerland (Geneva) | $4,000 |
| Italy | $2,255 |
| Australia | $1996 |
| Algeria | $156 |
| Uzbekistan | $22 |
Employees in Australia have the right to certain benefits, which may or may not include healthcare. Whilst it is not compulsory, many employer’s will provide their employees with an allowance, rather than purchasing a private health insurance plan on their employees’ behalf. All employees with a taxable income over a specified threshold pay 2% of their income to Medicare, the nation’s primary healthcare system.
Employers must make compulsory contributions to state-based Workers’ Compensation schemes which cover employees for injuries suffered on the job.
Employees are eligible for a set number of days off – for vacation, personal leave, and maternity and paternity leave. All full-time employees must receive a minimum of four’s weeks annual leave per year.
Full-time employees are eligible for 10 day’s personal leave per year. There are also protections in place for parental leave, so long as an employee meets certain eligibility requirements.
For employers that elect to manage benefits payments themselves, this can be both costly and time-consuming. It’s also imperative for employers to be mindful of Australia’s compensation laws. Otherwise, they may find themselves being penalized with significant fines.
Rather than struggling to manage benefits payments yourself, you can partner with Horizons’ Australia PEO. We source, hire, and onboard your employees; and our global payroll division ensures that your employees receive the most competitive statutory and supplementary benefits.
With Horizons, you get quick service, transparent pricing, and expert support.
An Australia PEO and an Australia EOR are two types of companies which specialize in providing human resources services to businesses in Australia.
The main difference between an Australia PEO and an Australia EOR is in the scope of their services.
Australia PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging an Australia PEO is essentially outsourcing your HR duties in Australia.
Australia EORs actually take over as the legal employer of your employees based abroad. Australia EORs become responsible for labor compliance for your employees in Australia.
At Horizons, we offer both PEO and EOR services in Australia. Get in touch now and let us know what service you are seeking.
A PEO in Australia can feasibly hire both local and foreign nationals to work in Australia.
However, the ability of Horizons to sponsor your foreign national employee in Australia may be limited due to visa quotas practiced in many countries.
Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.
In most cases, Horizons’ Australia PEO can hire & onboard your employee within 12 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Australia.
It is possible to get a work visa in Australia. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Australia are limited, however—get started today to secure your employees’ visa spot.
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