Global Employer of Record Guide: Australia

With natural resources, a thriving economy, a diverse social component, an up-to-date digital infrastructure, and a business-friendly environment, Australia is a popular spot for international business owners looking to grow their businesses. Indeed, it’s listed as one of the top 15 countries with the best GDP in 2024.

Now, Australia’s foreign policy may regulate international hiring; however, it takes an expert to abide by these regulations skillfully. For that reason, you need an employer of record Australia.

EORs act as your trusted business partner and the official employer for the Australian workforce, handling payroll, taxes, and compliance. They save you months of paperwork and relieve you of the stress of compliance with Australian labor laws. On top of that, they’re different from Australia PEO.

Below, we’ll cover the main benefits, risks, and job responsibilities of an EOR and help you choose one.

Benefits of Using Employer of Record Australia

If you’re on the fence about hiring an employer of record Australia, learning about its benefits will show you whether it’s worth the investment.

Hire local talent

With an employer of record, Australia’s talent pool becomes readily available. They connect you with an on-call network of potential hires, write and manage employment contracts, and handle the foreign worker recruitment process in Australia. As such, there’s no need for a local entity in Australia, which facilitates global expansion.

Compliance

An employer of record Australia is well-versed to navigate taxes and local labor laws and regulations.

The main regulation is the Fair Work Act, which governs employment relations in Australia. It also sets the minimum statutory standards and conditions (11 obligatory entitlements in all employment contracts). Additionally, separate state legislations may apply to public sector employees, such as South Australia, Queensland, and Tasmania.

Risk mitigation

An EOR minimizes the otherwise high risk of legal challenges accompanying global expansion and establishing an entity in another country. Their compliance with Australian law prevents penalties, fines, and legal disputes, protecting your business profits. If there are any, the EOR is the legal entity subject to them.

Not to mention, your Australian employees will enjoy low-risk levels working under a local legal entity. They’ll feel confident that the local EOR will withhold the right taxes, set up payroll easily, set compliant insurance policies, and issue employee fringe benefits as required by the law.

Cost effective

The minimum wages in Australia are relatively high as it is, so EOR cost savings are of the highest importance if you intend to expand to Australia. As mentioned earlier, they reduce the risk of legal problems, preventing costly penalties and fines.

Additionally, you won’t pay the fees of establishing a legal entity in Australia. This is cost-effective, especially if you aren’t hiring a large Australian team because you’ll only be charged by the EOR service per employee. Finally, EORs give you access to payroll software and resources for new Australian hires.

Focus on core businesses

Hiring an employer of record Australia, means outsourcing most administrative tasks. It makes payroll, training hiring, onboarding, and tax filing processes more efficient.

In other words, they do the administrative work so that you can do the work that only you can do: your core business operations. With an improved HR workflow, you’ll surely save on operational costs.

How does an employer of record in Australia work?

By understanding the responsibilities of an employer of record Australia, you’ll gain insights into how they’ll help you through business expansion and determine whether you want them in the picture or not.

1. Hiring process

The EOR recruits Australian employees fast, given their access to a wide pool of top Australian talents.

They post job ads on popular networking platforms, such as CareerOne, CareerJet, Adzuna, and Indeed Australia. Then, they shortlist applicants and find good fits for the needed roles. Also, the EOR ensures that the chosen applicants are legally eligible to work in Australia.

2. Employment contract

An employer of record Australia, drafts a legally sound and customized employment contract for your Australian hires. They should abide by the 11 obligatory entitlements stated in the Fair Work Act. They include the following key information:

Employer and employee name and details
Job titles and descriptions
Employment type
Compensation, such as rates, benefits, bonuses, and overtime
Leave entitlements
Work schedules
Probation period
Start date and work locations
Termination and resignation policies
Confidentiality agreements
Dispute resolution policies
Intellectual property rights
Privacy policies
Non-compete agreements (prohibiting your employees from competing with your business during or after their employment period for a specific period)

Read next: How to Define Your Employee’s Job Scope (With a Template!)

3. Payroll and benefits

Payroll and benefits management for the new Australian hires, while minding the local policies and regulations, falls under the responsibilities of the employer of record Australia.

They process their payroll, which includes enrolling them into the system, withholding taxes, issuing payslips, and managing deductions and allowances. As for benefits, the Australia employer of record issues benefits while complying with the National Employment Standards (NES) in Australia, which govern the following:

Maximum weekly hours
Flexible working arrangement requests
Offers and requests to switch from casual to permanent employment
Different leave entitlements
Public holidays
Notice of termination
Redundancy pay

4. Compliance

The main reason to hire an employer of record Australia is compliance, which is possible with their in-depth knowledge of Australian employment, such as the Fair Work Act and the National Employment Standards (NES).

An EOR Australia guides you through local taxes, payroll and benefits management, and termination procedures. Think minimum wages, resources, superannuation contributions, first-aid, and workplace health and safety regulations.

5. HR administration

EORs take on global HR functions for the outsourced Australian hires. You can count on an employer of record to provide you with local, continuous HR support with recruitment, onboarding, and performance management.

Things to Consider When Choosing Employer of Record Australia

For an employer of record to truly facilitate global expansion, you must rate them according to the following criteria and ensure they’ll live up to your expectations:

Local expertise

Australian EORs must have thorough knowledge and experience in the local employment laws and regulations. This way, they can follow them in their HR administration, payroll management, immigration procedures, benefits administration, and tax filing.

Also, with an employer of record Australia-specific labor customs shouldn’t go unnoticed so that you can navigate cultural nuances. For instance, they should know that bonuses are common in Australia and when it’s advisable to issue them. Not to mention, their established networks should connect you with Australian talents.

Compliance track record

Checking an EOR’s compliance track record is a no-brainer because it helps you hand over part of your business with an easy mind.

Ask yourself how responsive they are. Are they transparent about their processes? Do they have sufficient experience? Look at their social proof, and avoid EORs with past legal issues and compliance breaches.

Service offerings

Aside from the basics like compliance and payroll management, what services are you looking to outsource to the EOR? What are your business needs? Make a list, and evaluate different EOR packages accordingly.

For example, do they give you access to the HR integration you want? Are their data security measures sufficient? How much do they communicate with you? Better yet, do they have customizable or flexible packages?

Technology platform

As we’ve briefly mentioned, an Australia employer of record should give you access to remote management tools and payroll solutions that are compliant with local labor laws.

Such platforms should help onboard employees (like signing local employment contracts), process payroll, administer benefits, manage your outsourced Australian workforce, and give you control over labor costs. It might even alert you to local labor law changes, keeping your business 100% compliant and error-free.

References and testimonials

It’s always a good idea to check the online reviews, ratings, testimonials, references, and press coverage of the EOR service providers you’re eyeing.

Try third-party review sites, such as Capterra, Trustpilot, and G2. By conducting such research, you can learn about each service provider’s operations and see how satisfied their former and current clients are with their services.

Challenges and Risks for Australia Employer of Record

You’ve learned the perks of an employer of record Australia, so it’s only fair that you learn the risks. This way, you can form an unbiased opinion, make an informed decision, and consider how you’ll navigate these potential hurdles.

Complex Australia employment law

Labor laws in Australia are complex because they regulate employment while being mindful of the different employment types, sectors, age groups, ethnicities, genders, religions, races, and social and economic backgrounds.

Along with attempting to be fair and provide good conditions for employees, they attempt not to burden employers financially to the point that hinders their business growth and the country’s economy.

As a result, you see the complex employment laws in Australia, including tax laws, strict visa requirements, and workplace regulations. But to an employer of record, Australia laws should be kept under their radar at all times. The main provisions they should know about are the following:

Employer of record Australia selection

When it comes to selecting an employer of record Australia has no shortage of them, but the difficulty lies in finding the right service for your needs. After all, you want an affordable, transparent, and responsive EOR with the services you require. So, determine your business needs and compare them to the EOR offerings.

Protecting employee data

Sharing data with third-party vendors creates risks of data breaches from manual uploads, so security measures are crucial. EORs should offer secure storage solutions, encryptions, around-the-clock maintenance, and industry-standard privacy regulation compliance to protect your company, intellectual property, and employee data and prevent security attacks.

Frequently Asked Questions for Employer of Record Australia

1. What is an EOR?

An employer of record is the legal employer of the workers you’re recruiting in a different country. They handle hiring, recruitment, salaries, management, and HR processes. This way, you can hone in on day-to-day business operations.

2. How long does it take to hire an employee through an employer of record Australia?

You can welcome your Australian workers into your company within days of hiring an EOR (compared to four to 12 weeks otherwise). That’s because an EOR has an entity in Australia and an already established network of potential hires.

3. What are the costs associated with using an employer of record Australia?

EOR costs are either a fixed monthly fee per employee or a percentage of payroll plus applicable taxes. Add to that administrative fees, onboarding charges, and extra charges for supplemental features. If it’s a percentage, it could range from 10% to 20%.

4. Can I terminate an employee through EOR Australia?

Yes, you can terminate employment agreements via an EOR. They ensure termination procedures are compliant, including final pay and entitlements, redundancy, unfair dismissal, severance pay, and notice of termination.

5. Does an employer of record Australia provide benefits to employees?

Yes, an EOR administers local and global benefits to the outsourced Australian workforce. Benefits include mandatory and optional ones, and the latter gives your business an edge over competing businesses for potential hires.

6. Can an employer of record Australia help with visa and work permit applications?

Yes, they can. As the legal employer, they facilitate obtaining work visas and permits for your Australian employees and check that they can legally work, given their understanding of local regulations, ensuring business compliance.

Maximize Your Business Potential with Employer of Record Australia

An employer of record Australia can be a valuable asset for businesses looking to expand into the Australian market. By partnering with a reliable and reputable EOR, you can streamline your HR processes, mitigate risks, access global top talents, reduce costs, and enhance your company’s reputation in Australia.

Omni makes it easy to support employees across multiple countries, time zones, and currencies.

Our centralized document management solution makes gathering the necessary data required to apply for employment visas and other country-specific initiatives seamlessly and timely. With customized workflows and automated reminders, HR can help empower employees to manage the deadlines and documentation requirements for applications. And centralized documents and real-time data makes it easy for employees to access salary information and produce reports and documents necessary for verification.

Our dedicated local team of experts provides personalized support and ensures your business remains compliant with Australia’s labor laws. Book your product tour with our team to learn more about how Omni can help maximize your business potential.