Customers that wish to recruit workers and process payroll in Australia but don't want to set up a local subsidiary or branch office may take advantage of Globalization Partners' employer of record services. In compliance with local labor rules, your applicant is engaged via Globalization Partners' Australia Professional Employer Organization (PEO) and may be onboarded in days rather than the usual months. The person is tasked with fulfilling your in-country needs and will operate alongside your team as if they were an employee of your business.

In Australia, our system allows businesses to handle payroll without having to worry about HR services, taxes, or compliance management. We oversee best practices in employment contracts, statutory and market norm benefits, employee costs, and severance and termination if necessary in our role as a Global PEO specialist. We also update you on any changes that may occur in Australian labor legislation.

New hires have a shorter learning curve, more positive impressions of the recruiting process, and are more likely to commit fully to your team. You may relax knowing that skilled employment professionals are helping you with every hiring. Through Globalization Partners, you can easily and efficiently tap into the expertise of the best and brightest from over 185 nations.

It may be helpful to bear in mind the following typical perks in Australia while discussing terms of an employment contract and offer letter with an employee in Australia:
Australia Job Openings

In accordance with the Fair Work Act 2009, all Australian companies are required to provide at least the minimum wage and other benefits specified therein to all new hires. All employment contracts in the country must contain the following ten guarantees under the National Employment Standards. In addition, Australian companies are required to withhold and remit taxes on behalf of their staff under the country's Pay as You Go tax system. In addition, Australians have the right to receive a payslip no later than the next business day after they have been paid.
Australian Employment Agreements

An award, an agreement, or a contract may govern the employment of an Australian. This is based on the federal and state legislation and the National Employment Standards.

Awards, which are declining in popularity, often outline minimal requirements for employment and establish norms for all workers in the same industry. State and employer/industry norms may affect how awards are determined, but some examples include:

Compensation at the baseline level
The field of work (full-time, part-time, or casual)
Charges for extra time
Flexible work schedules, shift work, and other forms of workplace organization.
Salary Per Annum
Details on applying for and using vacation time
Allowances
Disagreement resolution guidance
Redundancy
a modifiable clause that may be negotiated to suit specific demands

A group of workers at a single company or many locations may enter into an Enterprise Agreement to govern their working relationship. Any award that would normally apply to workers at a company would be null and void if an enterprise agreement existed providing at least as much compensation as the award. When it comes to setting salaries and working conditions in the workplace, Enterprise Agreements dominate in Australia.

Those workers who are not protected by an award or enterprise agreement are often offered written employment contracts that outline their compensation and working conditions.

Information about the company and the worker
Employees' birthdates
Work Title
Job Situation by Workplace (full time, part time or casual)
Dates of employment beginning and ending Salary structure
Working Time and Vacation Time

Details such as employment responsibilities, pay, benefits, and expected performance levels should be included, as well as any other terms that apply.
Employment Timing in Australia

The standard workweek under the National Employment Standards is 38 hours, however employers are allowed to request and pay for overtime.
Vacations in Australia

In all, seven national holidays are celebrated annually:

Day One of the New Year
"Australia Day"
It's Good Friday
It's Easter Monday
Veterans Day (25 April)
Holiday Season
Christmas Day

The Queen's Birthday and Labor Day are only two of the many holidays celebrated nationally that have been established by the various states and territories. If a holiday is on a Saturday or Sunday, the following Monday is the day it is celebrated.
Time Off in Australia

Typically, full-time workers are given between 25 and 30 days of vacation each year, however the law only guarantees them four weeks.
Unused vacation time is carried over to the next year and paid out at the end of work.
Time off for illness or holidays is not deducted from accrued vacation time.

Sick time in Australia

Legally, full-time workers in Australia are entitled to 10 days of paid sick, personal, or carer leave each year.
Allotted sick time rolls over from year to year but is not transferable and is not refundable in the event of termination of employment.
When an employee is ill or must care for a family member who is ill or impacted by an emergency, he or she may take sick leave (called personal leave) in Australia.
Instead of being paid for by the government, sick days are covered by the employee's employer.

Australian paternity and maternity leave laws

If a parent qualifies, they might get up to 18 weeks of paid parental leave from the federal government. This is in addition to whatever leave time they could receive from their workplace. The federal administration has hinted at reforms that would limit this benefit, such that leave paid for by the government would be reduced by the amount of leave supplied by the employer. There has not been enough support from both parties in the Senate for the government to be able to approve this legislation, hence the status quo remains in effect.

Requirements for eligibility are:

Take charge of the care of a brand-new infant or a youngster you've just adopted.
Worked at least ten months out of the thirteen before the birth or adoption of the kid; worked 330 hours throughout that ten-month period (little more than one day a week); and had no more than an eight-week hiatus between two consecutive working days.
To be eligible for Paid Parental Leave, you must meet residency criteria from the time your child enters primary care until your leave ends.
having an adjusted gross income of less than $200,000 in the year before to the birth or adoption date or the date claimed, whichever is earlier, and
Stay home or on leave from the time you become the main caretaker of your kid to the conclusion of your paid parental leave.

If an employee has a child, they are not eligible for both the Newborn Upfront Payment and the Newborn Supplement during their parental leave.

If fathers and partners do not qualify for paid leave from their employers and fulfill certain income and employment requirements, they may be eligible for up to two weeks of paid government leave.
Insurance for medical care in Australia

Australia's healthcare system combines governmental and commercial sectors. Those with taxable earnings in Australia over a certain indexed threshold contribute 2% of their taxable income to Medicare, the country's universal healthcare system.

Ancillary health treatments (dental, optical, etc.) and private hospital accommodation are not covered by the mandatory Medicare plan but are available via private health care insurance.

In the event that an individual does not purchase private health insurance but has an annual taxable income in excess of the threshold amount, a 1% Medicare surcharge will be applied.

When it comes to health insurance, many Australian firms would prefer provide their staff a monetary allowance than foot the bill for a group plan because of the country's comparatively high fringe benefits tax.
Payments in Addition to Australia's Basic Income

The minimum cost of statutory benefits in Australia is estimated as 18% of total employment costs, hence it is recommended that businesses allocate at least this amount.
Bonuses

One-third of Australian employees earn annual bonuses despite the fact that they are not mandated by law. Between six percent and ten percent of base salary is the typical bonus range. Executives at the highest levels may be eligible for incentive bonuses worth as much as 50% of their base income.
Separation/Dismissal in Oz

Employers are obligated to provide workers the legally required minimum amount of notice, which varies depending on the length of the worker's tenure:

In the case of employment of less than a year, two weeks' notice is required.
Two weeks' notice is required for employees who have been with the company between one and three years.
The notice period is three weeks if the employee has been with the company for between three and five years.
Employees with more than five years of service are entitled to four weeks of paid leave.

If the worker is over 45 and has worked for the company for at least two years, the notice period is extended by one week. The legal need for notice may be waived in exchange for the statutory notice amount.

Notice periods are often lengthier under employment contracts. An employee may be entitled to a reasonable notice of termination (up to a year) under the terms of their employment contract.

Dismissal Without Cause in Australia:

If the employee meets the minimum employment requirement and is protected by the national workplace relations systems, the employee may file an unjust dismissal application.

If the company is a small one, the probationary period is one year (they have less than 15 employees).
If the company is not a small business, however, the waiting period is shortened to six months.

Furthermore, at least one of the following conditions should hold:

The individual is protected by an award.
This individual is subject to an enterprise agreement.
The individual's yearly rate of pay is less than the applicable income level (A$136,700 as of July 1, 2015; this barrier will be adjusted each fiscal year beginning on July 1).

Former workers have 21 days from the date of their dismissal to submit a claim with the Fair Work Commission. Reinstatement is the principal remedy for unjust termination. If that is not reasonable, then up to six months of lost wages may be compensated.

The phrase "redundancy" refers to the situation in which an employee is let go because their company no longer needs somebody to complete the work they are doing. The person is not what is redundant; rather, the work is. The following are some potential sources of redundancy:

Someone's position will be eliminated as a result of technological advancements.
If company slows down, it often necessitates cutting down on the number of people assigned to certain tasks.
Because to a company merger or acquisition, the role is no longer necessary.
Because of a company-wide reorganization, this role is no longer needed.
The company is going bankrupt or is insolvent.

Severance/redundancy pay is calculated using the employee's regular rate of pay for the applicable severance pay periods (as shown in the table below).
Severance Pay Based on Employee's Length of Continuous Employment Funds Disbursement
1+ years, 2 years
4 weeks
Two years minimum, three years maximum.
6 weeks
Time Period: Minimum of 3 years, Maximum of 4 years
7 weeks
More than 4 years, less than 5 years and 8 weeks
Five years minimum, six years maximum
10 weeks
Six or more, but not seven, years
11 weeks
7+ years but 8 years
13 weeks
More than 8 years but less than 9 years
14 weeks
Age Requirement: Minimum of 9 years, Maximum of 10 years, 16 Weeks
Ten years*, plus two months*

In the case of workers who have been with the company for at least 10 years, the severance compensation will be cut in half, from 16 to 12 weeks.

If any of the following conditions are met, redundancy pay is not due:

The company is a relatively modest employer (less than 15 employees).
The employee has not been with the company for a full year.
Due to extreme wrongdoing, the employee's employment has been terminated.
The duration of the employee's employment is defined.
A worker covered by a contemporary award's sector-specific redundancy policy.
The worker in question is one who falls within the scope of the business agreement's redundancy program.
Enterprise Agreement incorporates by reference a contemporary award that is in effect, and that award includes a redundancy program that is particular to the industry.
This worker falls under the contemporary award's redundancy program, which is tailored to their line of work.
an employee who works only sometimes.
In other words, a trainee.

Australia's Tax System

Payroll tax is a possible outlay for Australian employers, levied on salaries, bonuses, and superannuation.

In Australia, each state collects its own payroll tax. As this is a state tax and not a federal one, the threshold at which it is imposed and the rate at which it is applied will differ from one state to the next. Payroll tax thresholds and rates are shown here for all Australian states and territories.
State/Territory Threshold Rate
"New South Wales"
$1,200,000 4.85%
Victoria
$650,000 4.85%
Queensland
$1,300,000 4.75% to 4.95%
$1,500,000 0% to 4.9% South Australia
Dollars: One Million Five Percent: Western Australia
$1.5 million 4.5% to 6.1% Tasmania
Capital Region of Australia ($2,000,000) 6.85%
$1,500,000.00 5.5% Northern Territory

In Australia, employers must also provide money into a retirement fund known as Superannuation for their staff. Ten percent of an employee's regular pay is deducted as a contribution (OTE). As a rule of thumb, OTE consists of the base salary plus any shift premiums, commissions, bonuses, paid time off, and allowances that the employee receives.

Employers in Australia must pay a tax equal to a percentage of the total value of the employee's fringe benefits. Some types and amounts of fringe benefits need filing certain types of reports. Perks include things like:

Get yourself a vehicle for the office
Parking
Using a fitness center
Discounted financing
Private medical care at no cost to you

Fringe benefits tax does not apply to personal electronic devices used for commercial purposes, such as laptops and cell phones.
How Collaboration in Globalization Benefits Everyone

Setting up a subsidiary or branch office in Australia in order to employ a modest staff is a lengthy, costly, and convoluted process. With such robust worker safeguards, Australian labor law necessitates meticulous attention to detail and familiarity with local best practices. Incorporating in Australia is a breeze with Globalization Partners' help. Without the hassle of establishing a foreign branch office or subsidiary, we can assist you in finding and hiring your ideal individual, managing human resources and payroll, and ensuring compliance with local legislation. You can relax and concentrate on operating your business thanks to our Australia PEO and Employer of Record solution.

For more information on how Globalization Partners' employee leasing and PEO services may make the process of recruiting workers in Australia easier, please get in touch with us.