Hire in Australia
Here’s where you get started with human resources best practices and hiring in Australia.
Australian Dollar (AUD)
Key Country Facts
Australia, the smallest of the seven continents, is the sixth largest country in the world. The country is divided into two self-governing territories (Northern Territory and Australian Capital Territory including Canberra) and six states (Southern Australia, Western Australia, New South Wales, Queensland, Victoria, and Tasmania). Canberra is located in between the two most important economic cities, Sydney and Melbourne.
Australia is a land of vast plains. Two-thirds of the country is a desert, also known as the ‘outback.’
For most of the year, much of Australia experiences temperate weather. The hot, dry weather from December to February often causes bushfires.
The culture of Australia is as diverse as the country’s landscape. An important part of Australia’s heritage is its indigenous people, making up 2% of the country’s population.
Australia is a secular nation, offering high levels of religious freedom and religious diversity. However, many schools, hospitals, nursing home facilities and charities are affiliated with religious organizations. More than half of the population is Christian, with about one-fourth of the total population being Catholic and one-fifth being Anglican. Approximately a quarter of the population is non-religious. There are sizable populations of Protestants, Jews, Hindus and Buddhists.
Although not the official language, English serves as Australia’s de facto national language. There are also hundreds of Aboriginal languages. Other languages commonly spoken by immigrant populations include Chinese, Italian and Greek.
Australia HR at a Glance
Australia’s employment system is well developed, with the National Employment Standards (NES) serving as the main instrument for employment law. This framework includes 10 minimum entitlements that must be provided to all employees: maximum weekly hours, requests for flexible working arrangements, parental leave (and related entitlements), annual leave, personal/carer’s leave (including compassionate leave, family leave and domestic violence leave), community service leave, long service leave, public holidays, notice of termination (and redundancy pay) and Fair Work Information Statement. The NES covers all employees in the national workplace relations system, which is a collection of legislation also including the Fair Work Act 2009 (the minimum statutory standards and conditions employers must follow when hiring in Australia), registered agreements and awards.
Employees can enter into an award (modern award), a registered agreement (enterprise agreement) or an employment contract as prescribed by the NES and state and federal laws.
An award (also known as an modern award) is a legal document outlining the wages and conditions of employment for employees within a particular industry or occupation.
A registered agreement is a document signed by an employer and their employees pertaining to the conditions of employment. All agreements must be approved by and officially registered with the Fair Work Commission. Examples of registered agreements include enterprise agreements, collective bargaining agreements (CBAs), greenfields agreements, certified agreements, Australian workplace agreements (AWA) and individual transitional employment agreements (ITEA).
An employment contract is an agreement between an employer and employee setting out the terms and conditions of employment. An employment contract can be written or verbal. Employment contracts cannot provide for less than the minimum legal entitlements set out in the NES (the 10 minimum entitlements) and any applicable awards or enterprise agreements.
Other relevant employment conditions such as duties, allowances, bonuses and performance standards should be included in the contract.
Contract terms cannot provide for less than the minimum legal entitlements outlined in the NES and other awards or registered agreements that may apply. Workers are covered by the terms of the NES, regardless of whether a contract has been signed.
Probation Period/ Trial Period
Employers can decide the length of the probation period, ranging from a few weeks to a few months. The most common practice is to set the period between three and six months. During this period, full-time and part-time employees are entitled to accrue and to access paid leave entitlements like annual and sick leave. Employers must notify employees if they don’t pass their probation period. Employees are entitled to the unused annual leave hours they accumulate.
Final pay is the amount an employer owes an employee at the end of an employment agreement. Employment awards, registered agreements or contracts should specify when final pay must be paid. It is best practice for employers to pay their employees within seven days of their employment ending.
Employees are entitled to any outstanding wages for hours they have worked and any accumulated annual leave. If applicable, employees should also receive accrued or prorated long service leave, payment in lieu of notice and redundancy pay.
The Department of Human Services sometimes requires employers to submit an Employment Separation Certificate when an employee stops working for them. All payments must be outlined in this certificate.
Each industry award and registered agreement has its own overtime rules that employers should be aware of. Some employers allow employees to take paid time off instead of receiving overtime pay, a practice known as ‘time in lieu’ or ‘time off in lieu’ (TOIL).
The maximum weekly hours of work for full-time employees is 38 hours. The maximum for other employees is the lesser of 38 hours or their ordinary hours of work in a week. Employers must not request employees to work more than the established hours of work, unless the additional hours are deemed reasonable after accounting for the parameters set by the NES.
As per the Fair Work Act, employers must keep records for an employee on their hours worked and wages for seven years. These need to be legible in English and readily accessible to a Fair Work Inspector.
Depending on an employee’s service period, employers must offer the following minimum statutory notice when terminating an employee:
- Less than one year: one week’s notice
- More than one year and up to three years: two weeks’ notice
- More than three years and up to five years: three weeks’ notice
- More than five years: four weeks’ notice
If an employee is over 45 years of age and has worked for the employer for at least 12 months, he or she must receive an extra week of notice.
Employers should specify in employees’ awards, registered agreements or employment contracts how much notice employees must give when they resign. Employees can offer their notice verbally or in writing.
Employers can dismiss employees for reasons related to unsatisfactory performance or misconduct. To terminate an employee, employers must offer a written notice of the last employment day or payment in lieu of notice. The notice can be delivered in person or sent to the employee’s last known address. Serious misconduct allows for dismissal without notice. However, employers will still have to pay all outstanding entitlements.
Employees can apply for unfair dismissal if they believe they have been dismissed in a harsh, unjust or unreasonable manner. An employee is eligible to file an unfair dismissal application if he or she has worked for the employer for at least six months or for at least 12 months if the employer is a small business. Employers must submit the application to the Fair Work Commission within 21 days from the day of dismissal.
Bonuses are not required in Australia. However, many employers offer bonuses for incentive and retention purposes. Bonuses differ based on industry and seniority. Generally, employees can expect between 6% and 10% of their annual pay. High level executives can receive up to half of their annual salary as an incentive bonus.
A trade union must have at least 50 members who are employees and organized specifically for the purpose of supporting or advancing claims related to a proposed registered agreement. The Australian Council of Trade Unions (ACTU) is the largest body representing workers in Australia, representing 46 affiliated unions. However, membership of trade unions in Australia has steadily declined over the past four decades to only 15% of the workforce today.
Redundancy and Severance Pay
Redundancy occurs if employers no longer need an employee’s job to be done by anyone or if the organization becomes insolvent or bankrupt. The amount of redundancy or severance pay an employee is entitled to depends on the employee’s period of continuous service with the employer. This excludes unpaid leave.
Redundancy pay is not payable in some circumstances, such as if the employer is a small business or the employee’s period of continuous service is less than 12 months. Redundancy pay is not offered in fixed-term employment.
|Employee’s Period of Continuous Service with the Employer||Redundancy / Severance Pay Period|
|At least 1 year but less than 2 years||4 weeks|
|At least 2 years but less than 3 years||6 weeks|
|At least 3 years but less than 4 years||7 weeks|
|At least 4 years but less than 5 years||8 weeks|
|At least 5 years but less than 6 years||10 weeks|
|At least 6 years but less than 7 years||11 weeks|
|At least 7 years but less than 8 years||13 weeks|
|At least 8 years but less than 9 years||14 weeks|
|At least 9 years but less than 10 years||16 weeks|
|At least 10 years||12 weeks*|
*The severance entitlement amount is reduced after 10 years of continuous service because the Australia government assumes employees are also entitled to long service pay leave at this point.
Tax and Social Security
Personal Income Tax
An individual’s liability to pay taxes in Australia is determined by residence status. A person can be a resident, non-resident or temporary resident for Australian tax purposes. The Australian financial tax year runs from July 1 until June 30 of the following year. There are distinct guidelines for working holiday makers and people who are tax residents of more than one country.
A resident of Australia generally refers to an individual who enters Australia with the intention of remaining for more than six months, or who spends more than six months in Australia during an income year. An Australian resident for tax purposes must declare all income earned both in Australia and internationally on the annual Australian tax return. A foreign income tax offset is generally available to reduce the Australian tax on the same income, allowing individuals to avoid double taxation.
A non-resident of Australia is generally a person who spends less than six months in Australia. Non-residents are assessed on any income derived directly or indirectly from sources in Australia, which is subject to the interaction of a double tax agreement.
A temporary resident of Australia is someone who is on a specific temporary visa and meets other prescribed circumstances. Temporary residents are assessed on employment income from all sources derived after arrival in Australia and all Australian-sourced investment income, which is subject to the interaction of a double tax agreement.
Residents tax rates
|Income thresholds (AUD)||Rate of Tax||Tax payable|
|0 – 18,200||0%||Nil|
|18,201 – 45,000||19%||19% for each $1 over $18,200|
|45,001 – 120,000||32.5%||$5,092 plus 32.5% of amounts over $45,000|
|120,001 – 180,000||37%||$29,467 plus 37% of amounts over $120,000|
|180,001 and over||45%||$51,667 plus 45% of amounts over $180,000|
Foreigners Tax Rates
|Income thresholds (AUD)||Rate of Tax||Tax payable|
|0 – 120,000||32.5%||32.5% of amounts over $0|
|120,001 – 180,000||37%||$39,000 plus 37% of amounts over $120,000|
|180,001 and over||45%||$61,200 plus 45% of amounts over $180,000|
Workers Compensation Insurance
Workers compensation is a type of insurance payment offered to employees if they are injured at work or they become sick due to their work. Workers compensation includes payments to employees to cover medical expenses as well as their wages while they’re not fit for work. Employers in each state or territory must purchase workers compensation insurance to cover themselves and their employees.
Superannuation Guarantee (SG) Contribution
Superannuation Guarantee (Administration) Act 1992 governs the mandatory superannuation to all employees. All employers in Australia are required to contribute a minimum amount toward superannuation for their employees, in addition to their salary.
The following is a summary of the key features of the current SG system:
- 10.5%* of Ordinary Times Earnings (OTE) must be contributed to superannuation on behalf of eligible employees, up to a maximum contributions base (AUD58,920 per quarter in the 2022-23 financial year)
- Contributions must be made to a complying superannuation fund.
- Most employees must be allowed to choose their own super fund.
- Contributions must be received by the super fund no later than 28 days after the end of the quarter.
- Contributions are tax deductible to the employer.
*The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.
Medicare levy is payable only by residents and temporary residents from countries and territories that have reciprocal health agreements with Australia. The Medicare levy rate is 2% of an employee’s taxable income. A Medicare levy surcharge may also be payable depending on the employee’s income level and whether the employee has suitable private health insurance. When applicable, the Medicare levy surcharge rate ranges from 1% to 1.5% of the total of taxable income, plus other income for surcharge purposes. Other income includes reportable fringe benefits.
The Medicare levy surcharge rate is contingent on the level of income for surcharge purposes.
Payroll tax is a state or territory tax calculated based on total wages paid each month. It is collected by the state or territory that employees are located in. Payroll tax is incurred when total Australian wages are over the tax-free threshold for the state/territory. The thresholds and tax rates vary between states/territories.
Rates below from July 2022 – June 2023:
|State||Payroll Tax Rate (%)||Exemption Threshold (Wages)|
|VIC||4.85 for Metro (2.425 for Regional)||650,000|
|QLD||4.75/4.95 for Metro (3.75/3.95 for Regional)||1,300,000 for lower rate and 6,500,000 for higher rate|
|TAS||4.00/6.10||1,250,000 for lower rate and 2,000,000 for higher rate|
*The above rates are a broad guideline by state. Actual rates charged by GoGlobal will differ.
Salaries can be paid to employees on a weekly, fortnightly or monthly basis. Employers need to pay employees their final payment within seven days of the employment ending.
Pay slips must be issued within one working day of payment. Pay slips can be electronic or hardcopy, containing details of payments, deductions and superannuation contributions for each pay period.
- According to the NES, full-time and part-time employees are entitled to take four weeks of paid annual leave. This is also known as holiday pay. Shift workers may be eligible for one additional week.
- Employers are allowed to offer more annual leave than the minimum set by the NES.
- Annual leave accumulates in hours, starting from the first day of employment. This includes the probation period. Unused annual leave must be rolled over from year to year. It can be paid out upon termination of the employment agreement.
- All employees in Australia are required to use GoGlobal’s leave tracking system. This enables us to determine leave accrued and the latest leave balance timely and accurately, ensuring employees are updated on their leave entitlements.
Sick and Carer's Leave
- Sick, personal and carer’s leave allow employees to take time off to deal with personal illness and family emergencies. This category of leave is employer-funded
- Employees are entitled up to 10 days paid personal/carer’s leave for each year of employment and two days of unpaid carer’s leave per year.
- Different paid sick and carer’s leave entitlements can be set out in an award, registered agreement or contract but the entitlements must not be less than the minimum above.
- Sick and carer’s leave accumulates in days, beginning from the employee’s first day on the job. At the completion of the year, the employee’s balance must carry over to the next year.
- Unused sick leave and carer’s leave are not paid out on termination of employment.
Compassionate and Bereavement Leave
- All employees are entitled to two days paid compassionate leave (bereavement leave) and can be taken when an immediate family member dies or contracts a life-threatening illness or injury.
- Employees can take the leave days consecutively or as two separate periods of one day each. The ays can also be taken as any separate periods mutually agreed to by the employee and the employer.
- Employers can request evidence such as a funeral document, death notice or statutory declaration.
Family and Domestic Violence Leave
- Employees are entitled to five days of unpaid family and domestic violence leave each year, as stated by the NES. This leave covers situations where violent, threatening or other abusive behavior by a close relative aims to control an employee and causes harm or fear.
- Employers may also provide paid family and domestic violence leave entitlements.
- Public holidays are different depending on the state or territory. Employees are entitled to public holidays according to where they are based for work.
- If employees agree to work on a public holiday, as reasonably requested by employers, they get paid for all hours worked at their base pay rate.
- Employers can provide the following entitlements for working on public holidays: extra pay, an extra day off or extra annual leave or substituting a public holiday for another day.
Maternity and Parental Leave
- Parental leave (Maternity & Paternity Leave) can be taken when an employee gives birth, an employee’s spouse or de facto partner gives birth, or when an employee adopts a child under 16 years old. To be eligible for parental leave for the 1st time with an employer, employees must have worked for their employer for at least 12 months.
- Parental Leave is paid by the Government based on the weekly rate of the national minimum wage, for up to 18 weeks, which is 90 payable days.
- Employers can offer paid parental leave, and eligible employees (who are the primary carer of a new-born or adopted child) can also receive up to 18 weeks’ leave paid at the national minimum wage, according to the Parental Leave Pay of the Australian Government. These payments do not replace unpaid parental leave.
- Dad and Partner Leave is paid for up to 2 weeks. (10 payable days). This means that a family can get a total of up to 20 weeks or 100 payable days of payments.
- Employees are entitled up to 12 months unpaid parental leave and the right to request for an additional 12 months of leave. Employees who are adopting a child are entitled to 2 days unpaid pre-adoption leave to attend any relevant interviews or examinations.
Long Service Leave
- Employees are entitled to receive long service leave after working at the same company for an extended period of time.
- The laws for long service leave are different in each state or territory. These laws outline the required working period for employees to be eligible for long service leave and how much long service leave employees get.
Community Service Leave
- Employees can take leave for voluntary emergency management activities and jury service, including attendance for jury selection.
- Community service leave, except for jury service, is unpaid. There’s no limit placed on the amount of community service leave an employee can take. However, an employer is allowed to request evidence that an employee is entitled to community service leave.
- Full-time and part-time employees are entitled to ‘make-up pay’ for the first 10 days of jury selection and jury service. Make-up pay is the difference between the court’s jury service payment employees receive (excluding expense-related allowances) and the base pay rate for the ordinary hours they would have worked. Employers may request evidence for the total jury service pay amount and proof that employees have taken all necessary steps to obtain jury service pay. Employees are not entitled to their make-up pay if they fail to provide said evidence,
Flexible Working Arrangement
- Certain employees who have worked for the same employer for at least 12 months can request flexible working arrangements. Examples of such arrangements are changes to work hours (e.g. changes to start and finish times), patterns (e.g. split shifts or job sharing) or work locations (e.g. working from home).
- Besides fulfilling the 12-month employment period at the same employer, employers are eligible to request flexible working arrangements if they fit any of the following:
- Are the parent or are responsible for the care of a child who is school-aged or younger
- Are a carer (under the Carer Recognition Act 2010)
- Have a disability
- Are 55 or older
- Are experiencing family or domestic violence
- Provide care or support to a family member who requires care and support due to family or domestic violence.
Benefits to the Employee in Australia
The set overtime rate will vary for each award, registered agreement and contract. Employees should be aware of their overtime rate to ensure they are being paid correctly. Some employers permit employees to take corresponding paid time off instead of being compensated with overtime pay. This is known as ‘time in lieu’ or ‘time off in lieu’ (TOIL).
Superannuation: Employers may be required to make superannuation (super) contributions into a super fund on foreign workers’ behalf. In such cases, when leaving Australia, foreign workers may be eligible to claim their super back as a departing Australia superannuation payment (DASP).
Healthcare: An employee from a country territory that has a reciprocal health agreement with Australia with a taxable income over a certain level pays 2% of income to Medicare.
Leave: Minimum leave entitlement for employees are set in the NES. An award, registered agreement or employment contract can provide other leave entitlements. However, they cannot be less than what the NES states. Statutory leave includes but is not limited to annual leave, sick and carer’s leave, parental leave and public holidays.
Employers providing fringe benefits to employees must pay a tax on the value of those benefits. Laptops and mobile phones for business uses are exempt from fringe benefits tax.
Examples of taxable fringe benefits are:
- Using a work car for private purposes
- Gym membership
- Discounted loan
- Entertainment, such as tickets to concerts
- Private health insurance
Healthcare allowance: Employers in Australia often choose to provide an allowance rather than providing private health insurance plans, due to the relatively high fringe benefits tax.
Finding accommodations in Australia can be challenging as the market is competitive, especially in major cities like Sydney and Melbourne. Nevertheless, there are plenty of options from furnished apartments to houses and studios (also known as flats). Many expats, especially single ones, opt for shared housing.
Newspapers are a source of property listings. However, the rental market moves quickly, hence searching online on property websites is the best option. In 2019, the average rent in Australia was 436 AUD (304 USD) per week. Sydney has the highest rent prices with 580 AUD (410 USD) per week.
A typical rental applications include:
- Proof of identity (passport or driver’s license)
- Proof of income (bank statements of the last three months)
- References (current employer and possible a previous landlord)
- Employment details
- Previous rental agreements
- Down payment (will be returned if renter fails to get the property)
Buses are available in all eight capital cities. Other options, depending on the city, are commuter rail, light rail and ferry. Mass rapid transit (MRT) is currently only available in Sydney.
Visas and Foreign Workers
Foreigners and expatriates who wish to live and work legally in Australia are required to obtain a valid visa issued by the Department of Home Affairs. There are several categories of work visas for different professions, including investors, experienced business people, skilled professionals, specialized workers and short-term trainees. For foreign companies looking to expand to Australia, your employees will most likely fit the skilled-professionals category and can apply for any of the following:
Employer Nomination Scheme (ENS) Visa
Skilled workers nominated by employers to live and work in Australia permanently
Regional Sponsored Migration Scheme (RSMS) Visa
Skilled workers nominated by employers to live and work in regional Australia permanently
Skilled Independent Visa
Invited workers and New Zealand citizens with skills Australia needs to live and work permanently in Australia
Skilled Nominated Visa
Skilled workers nominated by employers to live and work in Australia as permanent residents
Temporary Skilled Shortage Visa
Temporary visa that allows an employer to sponsor a suitable skilled worker when an Australian worker is not available
Skilled Regional (Provisional) Visa
Temporary visa for skilled workers who want to live and work in a specific Australia region
Temporary Work (Short Stay Specialist) Visa
Temporary visa for short-term, highly-specialized work
Temporary Work (International Relations) Visa
Temporary visa for work intended to improve Australia’s international relations
Distinguished Talent Visa
Permanent visa for individuals with an internationally recognized record of outstanding achievement in a profession, sport, the arts or academia (and research)
Business Talent (Permanent) Visa
To develop or establish a new or existing business
Each work visa has its own requirements, with some based on an immigration point system. Employees may need different visas depending on the type of work and the assignment period. For the ENS visa, employees must prove that they have the skills necessary for the job through a skill assessment. The general requirements include:
- Meeting health and character requirements
- Demonstrating competent English
- Having three years of relevant work experience
- Being under 45 years of age (with some exceptions)
- Having read or been explained the Life in Australia booklet
- Signing the Australian Values Statement.
Skilled visas require employees to submit an online Expression of Intent (EOI) through SkillSet, an online system that processes skilled workers’ applications. Sponsored visas require employers to sponsor employees. Employers must be an approved sponsor with a nomination transaction reference number (TRN) or employer ID. Once those are available, employees can apply.
Getting a Tax Number
Getting a tax file number (TFN), a personal reference number in Australia’s tax system, is recommended. Without one, foreign workers have to pay more taxes. They should apply online for a TFN before starting work or soon after.
Public Holidays in 2022
|1.||New Year’s Day||January 1st|
|2.||New Year Holiday||January 3rd|
|3.||Australia Day||January 26th|
|4.||Good Friday||April 15th|
|5.||Easter Saturday (except TAS & WA)||April 16th|
|6.||Easter Sunday (except TAX & WA)||April 17th|
|7.||Easter Monday||April 18th|
|8.||Anzac Day||April 25th|
|9.||Queen’s Birthday (execpt QLD & WA)||June 13th|
|10.||Labour Day (ACT. NSW & SA)||October 3rd|
|11.||Christmas Day||December 25th|
|12.||Boxing Day (except SA)||December 26th|
|13.||Christmas Holiday (except NT, SA & WA)||December 27th|
TAS – Tasmania, SA – South Australia, WA – Western Australia, NT – Northern Territory, QLD – Queensland, ACT – Australian Capital Territory, NSW – New South Wales