Hire in Australia

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Last updated at June 16, 2022
beautiful scenery in the country of australia

Currency

Australian Dollar (AUD)

Capital

Canberra

Time Zone

GMT+10

Key Country Facts

Introduction

Australia is the smallest of the seven continents and 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.

Area

Australia is a land of vast plains. Two thirds of the country is the desert, also known as the ‘outback’.

Climate

For most of the year, Australia experience temperate weather. The hot, dry weather from December to February often causes bushfires.

 

Culture

Australian culture is as varied as the country’s landscape. An important part of Australia’s heritage is its indigenous people, making up 2% of the country’s population.

Religion

  • Christian: more than one-half of the population
  • Roman Catholic: one-fourth
  • Anglican: one-fifth
  • No religion: one-fourth
  • Protestant, Jews, Hindus, and Buddhists: the rest

Official Language

Although not the official language, English is the de facto national language. There are also hundreds of Aboriginal languages. Other languages spoken by immigrant populations are Chinese, Italian, and Greek.

Australia HR at a Glance

Employment Law

Australia’s employment system is well-developed. The centre element of this system is the National Employment Standards (NES) which include 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 (compassionate leave and unpaid family 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 cover all employees in the national workplace relations system, which is a collection of legislation including the Fair Work Act 2009 (the minimum statutory standards and conditions employers must follow when hiring in Australia), the NES, registered agreements and awards.

Employment Contract

Employees can enter an award (modern award), a registered agreement (enterprise agreement), or an employment contract as stated by the NES and state and federal laws.

An award (modern award) is a legal document that outlines the wages and conditions of employment for employees that are covered by it within a particular industry or occupation. Other known term: modern award.

A registered agreement is a document between an employer and their employees regarding employment conditions. An agreement must be approved by and registered with the Fair Work Commission. Examples of registered agreements include enterprise agreements, collective agreements, 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 that sets out terms and conditions of employment. A contract can be in writing or verbal. Employment contracts cannot provide for less than the minimum legal entitlements set out in the NES (the 10 minimum entitlements) and awards or enterprise agreements that may apply.

If applicable, other employment conditions such as duties, allowances, bonuses, performance standards, etc. should be included.

Contract Terms

Contract terms cannot provide for less than the minimum legal entitlements outlined in the National Employment Standards (NES) and other awards or registered agreements that may apply. Regardless of whether employees have signed a contract, they are covered by the NES. I

Probation Period/ Trial Period

Employers can decide the length of the probation period, which can range from a few weeks to a few months. The common practice is between 3-6 months. During this period, full-time and part-time employees are entitled to accrue and to access paid leave entitles, such as annual and sick leave. Employers must notify employees if they don’t pass their probation, and employees are entitled to their unused accumulated annual leave hours.

Final Pay

Final pay is the amount employers owe employees when their employment ends. Employees’ awards, registered agreements or contracts should specify when final pay must be paid. It’s best practice for employers to pay their employees within 7 days of their employment ending.

Employees are entitled to any outstanding wages for hours they have worked and any accumulated annual leave. If it applies, employees should also receive accrued or pro rata long service leave, payment in lieu of notice, redundancy pay.

Sometimes, the Department of Human Services requires employers to submit an Employment Separation Certificate when an employee stops working for them. All payments must be included in this certificate.

Overtime

Each industry award and registered agreements has its own overtime rules that employer should be aware of to avoid facing dispute. Some employers allow employees to take paid time off instead of receiving overtime pay. This is known as ‘time in lieu’, ‘time off in lieu’ or ‘TOIL’.

The maximum weekly hours of work for full-time employees are 38 hours and for other employees, the lesser of 38 hours and 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 taken into accounts different factors as outlined by the NES.

Timesheets

According to the Fair Work Act, employers must keep time and wages records for 7 years. These need to be readily accessible to a Fair Work Inspector, legible and in English.

Notice Period

Depending on an employee’s service period, employers must give the following minimum statutory notice when dismissing the employee:

  • Less than one year: one week’s notice
  • More than one year – three years: two weeks’ notice
  • More than three years – 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/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 give notice verbally or in writing.

Termination

Employers can dismiss employees for reasons related to their unsatisfactory performance or misconduct. To terminate an employee’s employment, employers must give 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 warrants dismissal without notice. However, employers do have to pay all outstanding entitlements.

Employees can apply for unfair dismissal if they think they have been dismissed in a harsh, unjust or unreasonable manner. An employee is eligible to make an unfair dismissal application if he/she has worked for the employer for at least 6 months, or for at least 12 months if the employer is a small business. Employers have 21 days from the day of dismissal to submit the application to the Fair Work Commission.

Bonus

Bonuses are not required. However, many employers will offer bonus as an incentive and for retention purpose. Bonus 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 salary as an incentive bonus.

Trade Unions

A trade union must have at least 50 members who are employees and must be organized 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 and represents 46 affiliated unions. However, membership of trade unions in Australia has steadily declined over the past 4 decades to only 15% of the workforce today.

Redundancy and Severance Pay

Redundancy occurs when employers either no longer need an employee’s job to be done by anyone or they become insolvent/bankrupt. The amount of redundancy/severance pay an employee is entitled to depends on the employee’s period of continuous service with the employer, excluding unpaid leave – see below for details. Redundancy pay is not payable in some circumstances, for example, if the employer is a small business, the employee’s period of continuous service is less than 12 months, or the employee is employed for a stated period/an identified task or project/a particular season, etc.

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

A person’s liability to Australian tax 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 1st until June 30th the following year. There are separate rules for working holiday makers and individuals who are tax residents of more than one country.

Resident

A resident of Australia generally refers to an individual who enters Australia with the intention of remaining for more than 6 months (or who spends more than 6 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 to avoid double taxation.

Non-Resident

A non-resident of Australia is generally someone who spends less than 6 months in Australia. Non-residents are assessed on income derived directly or indirectly from sources in Australia (subject to the interaction of a double tax agreement).

Temporary Resident

A temporary resident is a resident of Australia who is on a specific temporary visa and meets other prescribed conditions. Temporary residents are assessed on employment income from all sources derived after arrival in Australia and all Australian-sourced investment income (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 form of insurance payment to employees if they are injured at work or become sick due to their work. Workers compensation includes payments to employees to cover their wages while they’re not fit for work and medical expenses/rehabilitation. Employers in each state or territory must take out 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%* of Ordinary Times Earnings (OTE) must be contributed to superannuation on behalf of eligible employees, up to a maximum contributions base (AUD57,090 per quarter in the 2021-22 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 Superannuation Guarantee employer contribution rate will increase to 10.5% on 1 July 2022.

*The above rates serve as a broad guideline. Actual rates charged will differ.

MEDICARE LEVY
Medicare levy is payable only by residents and temporary residents from countries/territories that have reciprocal health agreements with Australia. The Medicare levy rate is 2% of taxable income. The Medicare levy surcharge may also be payable depending on the employee’s level of income and whether the employee has appropriate private health insurance. If applied, the Medicare levy surcharge rate ranges between 1% and 1.5% of the total of taxable income, plus other income for surcharge purposes (e.g. reportable fringe benefits). The Medicare levy surcharge rate depends on the level of income for surcharge purposes.

PAYROLL TAX
Payroll tax is a state or territory tax calculated based on total wages paid each month. It is collected by the state/territory that employees are located in. Payroll tax are 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 2021 – June 2022:

State Payroll Tax Rate (%) Exemption Threshold (Wages)  
NSW 4.85 1,200,000  
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  
SA 0-4.95 1,500,000  
WA 5.50-6.50 1,000,000  
TAS 4.00/6.10 1,250,000 for lower rate and 2,000,000 for higher rate  
NT 5.50 1,500,000  
ACT 6.85 2,000,000  

*The above rates are a broad guideline by state. Actual rates charged will differ.

 

Employees

Salary Payment

Salary can be paid on a weekly, fortnightly or monthly basis. Employers need to pay employees their final payment within 7 days of the employment ending.

Payslip

Pay slips must be issued within one working day of payment. Pay slips can be electronic or hardcopy and contain details of payments, deductions, and superannuation contributions for each pay period.

Annual Leave

  • Under the NES, full-time and part-time employees are entitled to four weeks of paid annual leave (also known as holiday pay) and one additional week for eligible shift workers.
  • Employers can offer more annual leave than the minimum required by the NES.
  • Annual leave accumulates in hours and from the first day of employment, including the probation period. Unused annual leave will roll over from year to year and is paid out on termination of employment.

Sick and Carer's Leave

  • Sick and personal or carer’s leave allow employees to take time off to deal with personal illness and family emergencies. This type of leave is funded by the employer.
  • Employees are entitled up to 10 days paid personal/carer’s leave for each year of employment and 2 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 they can’t be less than the minimum above.
  • Sick and carer’s leave accumulates in days and from the first day of employment. At the end of the year, the balance will carry over to the next year.
  • Unused sick and carer’s leave is not paid out on termination of employment.

Compassionate and Bereavement Leave

  • All employees are entitled to 2 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 2 separate periods of one day each or any separate periods mutually agreed to by the employee and the employer.
  • Employers can request evidence such as a funeral/death notice or statutory declaration.

Family and Domestic Violence Leave

  • Employees are entitled to 5 days unpaid family and domestic violence leave each year as stated by the NES. Violent, threatening or other abusive behaviour by a close relative that aims to control an employee and causes harm or fear fall into family and domestic violence.
  • Employers may also provide paid family and domestic violence leave entitlements.

Public Holidays

  • 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 these entitlements for working on pubic 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 get long service leave after working at the same company for a long period of time.
  • Long service leave laws differ for 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 is no limit on the amount of community service leave employees can take. However, employers may request evidence that employees are 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. Upon failing to provide said evidence, employees won’t be entitled to their make-up pay.

Flexible Working Arrangement

1. 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).

2. Besides fulfilling the 12-month employment period at the same employer, employers are eligible to request flexible working arrangements if they:

  • Are the parent, or have responsibility 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, or
  • 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

OVERTIME RATES

Overtime rate is different for each award, registered agreement and contract. Employees should be aware of their overtime rate to ensure they are being paid correctly. Some employers allow employees to take paid time off instead of receiving overtime pay. This is known as ‘time in lieu’, ‘time off in lieu’ or ‘TOIL’.

STATUTORY BENEFITS

Superannuation: Employers may be required to make superannuation (super) contributions into a super fund on foreign workers’ behalf. In such case, when leaving Australia, foreign workers may be eligible to claim their super back as a departing Australia superannuation payment (DASP).

Health care: An employee from a country/territory that have reciprocal health agreements 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 National Employment Standards (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.

OTHER BENEFITS

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,
  • Parking,
  • Gym membership,
  • Discounted loan,
  • Entertainment, such as tickets to concerts,
  • Private health insurance, etc.

Health care 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.

EXPATRIATES

Accommodations

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 is 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, and
  • Down payment (will be returned if failed to get the property).

Transportation

Buses are available in all eight capital cities. Other options, depending on the city, are commuter rail, light rail and watercraft (ferry). Mass rapid transit (MRT) is currently only available in Sydney.

Visas and Foreign Workers

General Information

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 enables an employer to sponsor A suitable skilled worker when an Australian 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 meant 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

 

GENERAL REQUIREMENTS

Every work visa has its own requirements, with some based on an immigration point system. Employees may need different visa 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, and
  • 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

S.No Occasion Date
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

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