Global Hiring Guide: Australia

Leveraging global talents is key to business success, and hiring in Australia may be a good place to start. After all, it’s home to natural resources, a rich economy, diverse workers, solid digital infrastructure, and a sound financial system.

Not to mention, if you look at the Ease of Doing Business rankings, you’ll find that Australia’s score reached 81.2 in 2020, which earns it the 14th place among the easiest countries to do business. And with the rise of remote work or hybrid work models, there’s little cause to limit yourself to a local talent pool.

We’ve created this guide to cover everything you need to know when it comes to hiring in Australia.

1. Understanding the Australian Labor Market

Before you hire contractors in Australia, you must first understand the Australian labor market and the regulations that apply. 

Labor laws

Labor laws impact hiring practices and shape employer-employee relationships. The main legislation governing employment in Australia is the Fair Work Act (2009). It dictates the basic rights and responsibilities of employees and employers. The legislation applies across all industries and jobs, but there are state-based variations.

Other relevant laws are the Disability Discrimination Act (1992), State and Federal Anti-Discriminatory Law, and the Work Health and Safety Act 2011.

Minimum wage

Minimum wages, which can be found in modern awards and enterprise agreements, are relatively high in Australia. These awards are legal documents determining minimum pay according to job positions and industries.

If an occupation isn’t covered, the National Minimum Wage (stated in the Fair Work Act and is reevaluated yearly) applies to it. According to the Australian Government, “From 1 July 2024 the National Minimum Wage is $24.10 per hour or $915.90 per 38 hour week (before tax).”

Working hours

If you’re hiring foreign workers in Australia, the National Employment Standards (NES) determines how many hours they can work per week, no matter the award, agreement, or contract. The maximum working hours for full-timers is 38 hours per week; however, exceptions apply.

A typical work week is Monday to Friday, but you can distribute these hours differently. To extend your employees’ working hours, you have to mind overtime laws regarding hours and rates.

Social security

Australia’s social security system is called Centrelink. It provides health care, pension, and unemployment support payments for eligible Australian citizens or residents.

Unlike many surrounding countries, you can hire contractors in Australia without contributing to this social security system. Instead, the Australian Government supports Centrelink via general taxation accumulations. However, there’s a Superannuation Fund, which we’ll get into later.

2. Process for Recruiting in Australia

Understanding how hiring in Australia works enables you to conduct the recruitment process seamlessly and expand globally.

Job description

Hiring foreign workers in Australia starts with drafting a job description and the required qualifications. This outlines the job scope, tasks, conditions, and responsibilities of the occupation and who the employee would report to. You can also refer to this template set by the Australian Government as a starting point.

Recruitment channels

You should mainly use online recruitment channels to post job ads. Pick platforms with a high presence in your target audience, especially popular ones in Australia, such as SEEK, Indeed, and Jora. You can also try industry-specific job boards and publications.

Screening and selection

The next step is to evaluate applications to eliminate unqualified candidates. You can use screening software to automate this step.

Then, you should conduct a screening interview for shortlisted candidates. Virtual interviews are great for remote work, Australia, whether it be through videos or phone calls. For in-person interviews, you may already have a branch set up in Australia to conduct them, or send over a hiring committee to interview potential Australia employees.

Job offers

Finally, the terms of an employment contract must comply with applicable awards and Australian law. When hiring in Australia, you can establish an enterprise agreement with the new hires to arrive at appropriate terms for your company (as long as they don’t contradict laws).

Then comes a period of negotiation where you agree on the employment terms, so you must be aware of the typical benefits and average salary in Australia.

3. Onboarding and Compliance for Hiring Foreign Workers in Australia

Hiring in Australia should be a seamless and fully compliant process. Here are some areas to consider:

Employment contracts

When hiring in Australia, you need a legally sound and customized contract for your Australian hires. You should abide by the 11 obligatory entitlements stated in the Fair Work Act, including the following key data:

• Employer and employee name and information
• Job title and description
• Employment type
• Start date and work locations
• Probation period
• Compensation
• Leave entitlements
• Work schedule
• Confidentiality agreements
• Intellectual property rights
• Dispute resolution policies
• Privacy policies
• Termination and resignation policies
• Non-compete agreements (which ensure your employees don’t compete with your business during or after their employment period for a specific period)

Work permits

If you’re hiring in Australia, you might need to get a work permit or license depending on the state in Australia your workers are in. A work permit grants you business approval to conduct an activity or protect your company and workers. You can refer to a business advisor to determine if you need one.

Social security registration

Since there are no direct social security contributions, you don’t need to register your employees for them if you’re hiring in Australia. But the closest thing to that is registering for superannuation.

The Australian Government says, “As an employer, you need to set up your business to pay super into your eligible employees' chosen super funds or their stapled super fund where no choice has been made.”

Induction training

When you’re hiring in Australia, your HR team should conduct induction training to support new hires throughout the onboarding process and help them settle in. It should include the relevant data that’ll help them transition into their position.

4. Managing Your Workforce

Excellent employee management heightens employee satisfaction, productivity, and retainment levels, which makes your global expansion plans sustainable in the long run.

Australia payroll and benefits

Payroll compliance is crucial when hiring in Australia because it makes timely, accurate payments to your Australian team a possibility. And issuing the right benefits improves employee satisfaction levels.

To get started, you should register your new employees in your internal system. If you’re working with an employer of record, you won’t need to, as they’ll add them to a global payroll solution and will understand payroll regulations and the necessary deductions, taxes, and benefits.

Read next: Global Employer of Record Guide: Australia

Leave management

When hiring in Australia, it’s necessary to learn about leave regulations and set your leave policies to protect the workflow and keep employees happy.

The National Employment Standards grants employees four weeks of paid annual leave, known as holiday pay. Some applicable awards and enterprise agreements might entitle them to more–five or six weeks. During these leaves, you must pay employees their current rates. As for the leave types, they include the following:

• Annual leave
• Public holidays
• Maternity leave
• Paternity leave
• Sick leave
• Parental leave
• Public holidays

Performance management

Effective performance management requires you to track employee performance using certain key performance indicators (KPIs) when hiring in Australia.

Also, you should conduct employee performance appraisals regularly to determine how to boost employee performance. Options include training, courses, promotions, and raises. Not to mention, issuing performance-based bonuses is common in Australia.

Additional reading: 12 Employee Recognition Examples to Keep Your Team Engaged All Year

Employee relations

After hiring in Australia, you need to work on solidifying employer-employee relationships. For one, you should refer to the Australian National Workplace Relations system. Its minimum terms and conditions of employment and workplace rights and responsibilities are key to solid employee relations management.

The relevant Government workplace programs are the national workplace relations system, Paid Parental Leave, and Fair Entitlements Guarantee (FEG).

Compliance

The main consideration when it comes to hiring in Australia and other countries is compliance. You must adhere to the relevant workplace legislation in Australia governing payroll, taxes, wages, hiring, labor, and immigration procedures.

For that reason, you should work with legal and compliance experts or hire an employer of record to be legally responsible for compliance.

5. Taxes and Contributions

It’s only fair to want to understand the scope of your responsibilities when it comes to taxes and contributions. This way, you can estimate the business expenses associated with hiring in Australia and ensure compliance.

Employer obligations

Abiding by these tax-related obligations that come with hiring in Australia keeps your business compliant and its revenue protected against penalties and fines.

Goods and services tax

The goods and services tax (GST) is a 10% tax on most goods and services in Australia. If your business is registered for tax, you have to collect it from the sale price and send it to the Australian Taxation Office (ATO).

Then, there’s the fringe benefits tax (FBT). It’s “paid by employers on certain benefits provided to their employees, or to their employees’ family or other associates.”

To explain, fringe benefits are non-monetary payments for employees, such as allowing them to use their work car for personal reasons, giving them free concert tickets, or issuing benefits. Its value depends on the taxable value of the fringe benefit, and you must self-assess your FBT return.

Moving on, superannuation, commonly called super or super guarantee (SG), supports employees after retirement. As an employer, you must contribute 11% of your employee’s income to this pension scheme quarterly if you’re hiring in Australia.

Hiring in Australia also means paying the workers’ compensation. This form of insurance provides employees with a safety net in case of work-related injuries or illnesses. There are 11 main workers’ compensation schemes that offer injured workers the help they need.

Tax compliance

Australian Law affects payroll processing, as it plays into wages, benefits, and taxes. After processing these compliantly, you must keep employee records, including GST, fuel tax credit, and other tax records. We recommend using digital rather than paper records.

Finally, you must file your company’s taxes, which means submitting your employees’ income tax return forms.

Employee obligations

Learn about the obligations and taxes you must withhold from your Australian employees’ salaries and the ones they file themselves to keep your business 100% compliant.

Income tax

Australia has a Pay As You Go (PAYG) system for income taxes. So, if you’re hiring in Australia, you must withhold taxes on behalf of your employees from their paychecks and send them to the ATO. The income tax rates for Australian residents for the financial year 2024-2025 are as follows:

Medicare levy

The Medicare levy is an amount other than the tax income–2% of taxable income. It partly funds Australia’s public health system, Medicare. Usually, the PAYG amount you withhold from your employees’ salaries or wages should include an amount to cover the Medicare levy.

Medicare levy surcharge

On top of the medicare levy, the medicare levy surcharge (MLS) applies if you’re hiring in Australia for employees, their spouses, or dependent children who don't have sufficient private patient hospital coverage or who earn above a certain income. Fortunately, you don’t need to cover it on behalf of your employees.

Superannuation

As mentioned above, you’re required to pay superannuation for your employees amounting to 11% of their income. This is the case when it comes to hiring in Australia, regardless of whether employees are full-time, part-time, or casual workers. However, some exceptions do apply.

Optimize Your Australia Hiring Strategy Today

When it comes to hiring in Australia, it requires meticulous attention to legal regulations and thorough documentation. You should strive to minimize human error by leveraging automation to ensure accuracy and compliance.

Omni’s suite of features makes hiring foreigners in Australia an efficient and compliant process. With secure and centralized employee records, HR teams can swiftly access employment contracts and essential documents that support the requirements for hiring contractors in Australia.

For leave management, our time off management capabilities allows managers to approve leave applications on the go, and keep track of who’s in and out of the office with at-a-glance scheduling. Our employee self-service portal allows employees to submit their employee time off request, which automatically routes to the appropriate manager thanks to customizable approval workflows. With automated calculations, employees and managers can easily view leave balances in real-time, and track how many vacation days they have left without having to go through HR.  

When it comes time for payroll and tax processing, Omni offers a comprehensive payroll solution tailored to Australia’s specific requirements. With features like support for the Australian dollar and automated tax calculations, Omni can help HR teams simplify their payroll processing and ensure compliance with ease.

Book a demo with our team today to learn more about how Omni can simplify hiring in Australia for your business.