Australia may be the smallest continent, but it’s big on opportunities. Here, the global employment market is lucrative but complicated. Regulations vary between states, and managing your compliance requires in-depth knowledge. 

Partnering with an Australia employer of record (EOR) like G-P is the simplest way to hire globally — without setting up an entity. With G-P, you can hire top talent in 180+ countries, including Australia, quickly and easily. Our dedicated support and local expertise allow you to take advantage of global hiring opportunities while focusing on the bottom line. 

Simplify hiring in Australia with an employer of record

Employers in Australia must follow the Fair Work Act 2009. The National Employment Standards (NES) form part of this legislation, and set out 12 minimum employment terms and conditions that apply to all employees. These standards can’t be undercut by any contract, award, or agreement.

Australia also uses a pay-as-you-go (PAYG) tax system. Employers deduct income tax from wages and pay these amounts directly to the Australian Taxation Office (ATO). 

An EOR Australia ensures your business complies with local labor laws and tax regulations.

The EOR hiring process in Australia

  • Partner with a global employment expert. Choose an EOR with deep, in-country expertise in Australia as they’ll guide you through the local legal landscape.

  • Source your ideal candidate. You find the best talent for your needs, and the EOR handles the rest of the employment process.

  • Generate a compliant employment contract. Your EOR drafts a locally compliant contract that reflects all mandatory terms under the NES, including salary, working hours, and notice periods.

Onboard and manage your team. The EOR manages all aspects of the employment lifecycle. This includes registering the employee with the ATO, processing payroll, and administering benefits typically entitled to receive a pay slip within 1 working day of being paid.

Watch how an EOR works

Employment contracts in Australia

Employment terms in Australia are set out by the National Employment Standards (NES), modern awards, and enterprise agreements. 

Modern awards are an add-on to the NES. They set minimum pay and employment conditions for most employees. While award standards vary depending on industry or job type, they generally cover:

  • Minimum pay rates

  • Type of employment (full-time, part-time, or casual)

  • Overtime and penalty rates

  • Work arrangements and shift work

  • Leave and allowances

  • Dispute resolution

  • Redundancy

Enterprise agreements are negotiated between an employer and a group of employees, often through a union. These agreements define wages and workplace conditions. They’re usually more detailed than modern awards and must pass a “better off overall test” (BOOT). 

The BOOT checks that the terms and conditions in the agreement provide at least as much benefit — if not more — than the minimum standards set by the applicable modern award. It’s designed to protect employees from being disadvantaged by enterprise agreements compared to the legal minimums

All employees need written contracts, whether they’re covered by an award or agreement (or neither). A compliant contract should include essential terms such as the parties' details, job title, employment status, start date, compensation, hours of work, and leave and termination conditions.

An EOR Australia, like G-P, acts as the legal employer. We draft compliant contracts that meet legal standards, employee terms and conditions, and best practices.

Leave entitlements in Australia

Working hours in Australia

The NES sets out a maximum 38-hour workweek for full-time employees. Employees may be asked to work overtime, within reason. Some awards or agreements may set a maximum number of overtime hours, but this varies 

Public holidays in Australia

Australia-based employees are entitled to seven national public holidays: 

  • New Year's Day

  • Australia Day

  • Good Friday

  • Easter Monday

  • Anzac Day

  • Christmas Day

  • Boxing Day

Each state and territory has additional public holidays, such as the King's Birthday and Labour Day. When a holiday falls on a weekend, it’s usually observed on the following Monday.

Vacation days in Australia

Full-time employees have a minimum of four weeks (20 days) of paid annual leave. This leave can build up to be used later, but it must be paid out if the employee leaves their job. As a competitive benefit, some companies may offer up to 30 days of leave per year.

Sick and carer's leave in Australia

Full-time employees have 10 days of paid personal or carer's leave per year. This can be used if the employee is unwell or to care for an immediate family or household member. Unused leave can build up, but isn’t usually paid out if the employee leaves their job. This leave is funded by the employer.

Parental leave in Australia

Employees with at least 12 months of continuous service are entitled to 12 months of unpaid parental leave. 

Eligible employees can also access government-funded parental leave pay ( PLP ). Parents receive a shared block of up to 22 weeks of paid leave to care for children born or adopted after July 1, 2025. This is set to increase by two weeks annually until it reaches 26 weeks in July 2026. The payment is based on the national minimum wage rate.

To get PLP, employees must:

  • Have worked for at least 10 of the 13 months before the birth or adoption, and for at least 330 hours (around one day a week) in those 10 months

  • Meet an individual or family income test

How an employer of record helps manage leave entitlements in Australia

There’s no need for you to manage employee working hours and leave in line with Australian law — an Australia EOR will do it for you. EORs also handle the complexities of parental leave, ensuring eligible employees receive government-funded PLP, so your business stays compliant.

Health insurance in Australia

Australia has public and private healthcare. The public system, Medicare, is funded in part by a 2% Medicare levy on most taxpayers' taxable income. High-income earners without enough private hospital cover pay an extra Medicare levy surcharge (MLS) of 1–1.5%. This is to encourage high-income earners to use private hospitals and reduce the demand on public ones.

When an employer pays for an employee's private health insurance, it’s a fringe benefit and subject to fringe benefits tax (FBT). This tax is high, so employers in Australia usually prefer to offer a health insurance allowance instead. Or they’ll offer group discount plans where employees pay the premiums. 

Supplementary benefits and bonuses in Australia

When planning your budget, include costs on top of an employee's salary, such as superannuation (a compulsory retirement fund), bonuses, payroll tax, and paid leave. It’s recommended that you budget around 18% on top of the employee’s gross salary for these costs. See our compensation and benefits in Australia page for more details.

Annual bonuses aren’t compulsory, but they’re a common incentive. The average bonus ranges from 6–10% of an employee’s annual salary, with senior executives potentially receiving significantly higher amounts.

How an employer of record helps with benefits in Australia

An employer of record Australia ensures employers understand the implications of levies, surcharges, and taxes. They also advise on or administer health insurance allowances, so your business can offer competitive benefits and avoid being over-taxed.

Termination and severance in Australia

The NES mandates minimum notice periods for termination, based on an employee's length of service:

  • Less than one year: one week's notice

  • One to three years: two weeks' notice

  • Three to five years: three weeks' notice

  • More than five years: four weeks' notice

The notice period is increased by one week if the employee is over 45 years old and has completed at least two years of continuous service. An employer may pay out an employee instead of giving them notice. A modern award or enterprise agreement may specify longer notice periods.

Unfair dismissal

An employee may file an unfair dismissal claim if they have worked continuously for at least six months, or 12 months for a small business with fewer than 15 employees. Either a modern award or enterprise agreement must apply to their role, or their annual rate of earnings must be below the high-income threshold — AUD 178,600 as of July 1, 2025; indexed annually. 

Employees have 21 days from the date of dismissal to file a claim with the Fair Work Commission.

Redundancy pay

If an employee's role is made redundant, they may be entitled to redundancy pay based on their years of service. This isn’t typically required for small businesses, casual employees, or employees with less than 12 months of service. The redundancy pay scale is:

Period of continuous service

Redundancy pay period

1 year but less than 2 years

4 weeks

2 years but less than 3 years

6 weeks

3 years but less than 4 years

7 weeks

4 years but less than 5 years

8 weeks

5 years but less than 6 years

10 weeks

6 years but less than 7 years

11 weeks

7 years but less than 8 years

13 weeks

8 years but less than 9 years

14 weeks

9 years but less than 10 years

16 weeks

10+ years

12 weeks*

* Under the Fair Work Act, employees with 10 or more years of service are considered to have access to long service leave entitlements. The law assumes that these long-serving employees receive an additional benefit (long-service leave), so the redundancy pay is reduced accordingly

An EOR Australia ensures a smooth offboarding process for your team members. EORs manage everything from terminations to redundancy pay — so you don’t have to. 

Payroll and payroll taxes in Australia

Employers in Australia are responsible for certain contributions and tax withholdings.

Superannuation: Employers must contribute to a retirement fund for all eligible employees. As of July 1, 2025, the mandatory contribution rate is 12% of an employee's ordinary time earnings (OTE).

Payroll tax: This state and territory-based tax is levied on employer wage bills that exceed a certain threshold. Rates and thresholds vary by jurisdiction. The table below outlines the general rates and annual thresholds for the 2025–2026 financial year. Check with the relevant state revenue office for up-to-date rates.

State/Territory

Annual threshold (AUD)

Tax rate

New South Wales (NSW)

1,200,000

5.45%

Victoria (VIC)

700,000

4.85%

Queensland (QLD)

1,300,000

4.75–4.95% (plus mental health levy)

South Australia (SA)

1,500,000

Up to 4.95%

Western Australia (WA)

1,000,000

5.5%

Tasmania (TAS)

2,000,000

6.1%

Australian Capital Territory (ACT)

2,000,000

6.85%

Northern Territory (NT)

1,500,000

5.5%

FBT: Employers must pay tax on certain non-cash employee benefits. These include a company car for private use, gym memberships, or private health insurance. Laptops and mobile phones used primarily for business are often exempt.

An EOR Australia simplifies global employment by handling all aspects of payroll and tax compliance. This includes managing the PAYG tax system, ensuring correct withholding and remittance to the ATO, and sending out timely pay slips. 

How to choose the right EOR in Australia

Consider these factors when selecting an EOR in Australia: 

  • Compliance expertise: Your EOR must have a deep understanding of Australian labor laws and requirements. A partner with a dedicated team of local HR and legal professionals can proactively manage changes to ensure you’re always compliant.

  • Comprehensive service offering: The right partner offers a range of global employment products and EOR solutions. Our global employment platform delivers everything you need to manage the employee lifecycle, from drafting compliant employment contracts and managing payroll to administering benefits and offboarding.

  • Technological capabilities: Confirm that the EOR integrates with your existing HCM, PEO, or payroll systems to avoid operational delays. 

  • Transparent cost structure: Look for transparent costs so you can accurately budget for your global employment goals.

  • Reputation and industry leadership: Research the EOR's market reputation. G-P is the recognized leader in global employment and is ranked #1 according to all industry analyst reports . Customer testimonials and case studies are also important when choosing an EOR.

Use G-P EOR for global hiring in Australia

G-P EOR is the award-winning, AI-powered global hiring solution that empowers startups , SMB s, and enterprise businesses to build global teams with ease. G-P EOR handles everything from onboarding to paying top talent in over 180 countries. With us, you bypass the complexity of local entity setup. 

G-P EOR is the preferred partner for leading HCM, PEO, and payroll platforms . Bring your workforce data together in one place to maintain existing workflows while keeping consistent and accurate data across your integrated systems.

Request a proposal to start hiring in Australia today.