EU Cookies Consent by PrivacyPolicies Australia – Employer of Record - GoGlobal

Key Country Facts

Currency: Australian Dollar

Time zone: GMT +11

Capital city: Canberra

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.

Employment Contracts

Australia’s employment system is well-developed.

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.

New South Wales Public Holidays

Occasion Date
New Year’s Day January 1
Australia Day January 26
Good Friday April 2
Easter Saturday April 3
Easter Sunday April 4
Easter Monday April 5
Anzac Day April 25
Queen’s Birthday June 14
Labour Day October 4
Christmas Day December 25
Boxing Day December 26
Additional Public Holiday for Christmas Day December 27
Additional Public Holiday for Boxing Day December 28

Vacation

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 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.

Maternity/Paternity Leave

Parental 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.
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.
Dad & Partner Pay: Working dads and partners, including same-sex partners, are entitled to 2 weeks of paid leave at the national minimum wage.
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.

Termination/Severance

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.

Australia Social Security

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.

Australia Health Insurance Law

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.

This information does not constitute legal advice.

Full Country HR at a Glance

GoGlobal