Hiring an employee in Australia can have advantages for businesses located elsewhere. For one, it allows your company to enter the local market by partnering with people who have direct experience working there. For another, the Australian workforce is highly educated. The culture emphasizes critical thinking and problem-solving skills, and with English being the country’s official language, workers here are equipped to work effectively with foreign companies.
Despite these compelling benefits, companies may be hesitant to onboard workers in Australia due to the complexities of international hiring. A popular option is to work with an employer of record (EOR) to hire talent in Australia. Let’s consider the pros and cons of EOR services—as well as the alternatives—so your company can make an informed choice.
A few things to know about hiring in Australia
As with any territory, there are employment laws specific to Australia that are likely different from those in your country. Familiarizing yourself with Australian employment regulations will set you up for an effective and compliant hiring process. While partnering with an expert is the best way to stay compliant, here are a few specific considerations to bear in mind.
Superannuation
Employees in Australia are eligible for superannuation contributions, a mandatory pension scheme funded by employers that can be accessed upon retirement. Employers are required to contribute by the end of each quarter to this “super” at a rate of currently 11% (which will increase to 12% in 2025). While further contributions may be made, they aren’t required.
Probationary period and termination
Probationary periods are typically agreed upon with a length between 3 to 6 months. During probation, employment can be terminated based on notice alone.
Employers in Australia are not obligated to provide a justified reason for terminating employees who have been working for them for less than six months if the company has more than 15 people, or less than a year if the company has fewer than 15 people. The same applies for employees earning above the high income threshold (currently $167,500) and who are not covered by a modern award or enterprise agreement. Such employees are in general not eligible to make a claim of “unfair dismissal” to the Fair Work Commission.
Types of employment contracts
The normal full-time workweek in Australia amounts to 38 hours per week. Employees may be employed by an employment agreement for an indefinite term, a maximum term, or a true fixed-term. In case of a maximum term employment agreement, an earlier termination than the agreed upon term may be possible. Notice is required in such situations. In case of a true fixed-term, the agreement will automatically end at the expiry date, and an earlier termination will in most cases require compensation to the employee for the remainder of the fixed term.
Time off
In Australia, full-time employees are entitled to four weeks of paid leave annually. A part-time employee accrues this amount pro rata. Any accrued and unused PTO can be rolled over to the following year and will not expire. Any unused leave must be paid out upon termination.
Employers are also required to grant their workers 10 days of paid sick leave for each year of service, with untaken sick leave accumulated from year to year. Any unused sick leave is not paid out upon termination of employment.
Employees who have worked for a company consistently for a period of 12 months can receive 12 months of unpaid maternity leave in Australia, though some employers provide payment for a certain period. Employees may also apply for Federal Government paid parental leave.
To learn more about Australian employment regulations, check out our complete guide to hiring employees in Australia.
For a detailed breakdown of hiring costs, check out our employment cost calculator for Australia.
Using an employer of record in Australia
Given the complexity of navigating Australian labor and tax laws, companies often turn to an employer of record to hire there. An employer of record is an entity that assumes the role of an employer for compliance purposes. This allows organizations located elsewhere to onboard talent in that country. EORs can manage a number of responsibilities on your behalf, including hiring, legal, and tax functions, as well as payroll and HR tasks. Since EORs serve as third-party organizations that oversee a broad range of employment-related functions, they allow companies to expand into new markets rapidly.
Benefits of using an employer of record in Australia
Working with an EOR to employ people in Australia is an attractive option for many companies. It enables quick and seamless entry into this international market while helping to ensure compliance. As we saw above, Australia has its own unique tax and labor laws, including mandated employer contributions to pension funds, notice and probationary periods, and overtime requirements. Navigating these challenges can be complex for foreign HR and compliance teams, and handing them off to an EOR can alleviate the administrative hassle.
EORs are also considered an advantage due to their firsthand knowledge of cultural norms, employment processes, and other local practices since they’re established in Australia. That’s why they’re well equipped to attract prospective candidates for your company’s openings.
Drawbacks of using local EORs to hire in Australia
While using local EORs may be a good choice for some companies, it might not be right for others. One reason is that local EORs only offer services in a specific country. That means if you’re looking to hire in Australia as well as other countries, the EOR you choose for Australia won’t be able to help you in the other locations. For businesses that have their sights set on global expansion, finding a different EOR for each location can become burdensome.
Assessing multiple EORs to ensure you’ve found the right fit is tedious and time-consuming. Working with different EOR services also means dealing with varying processes, platforms, and requirements, which can get cumbersome. Costs can also start to climb when using many different services. In short, an EOR may be a good fit if Australia is the only territory you plan to expand to, but it may not be the best solution to support expansion across multiple regions.
Oyster’s global employment platform: An alternative to Australian EORs
There’s another option for onboarding talent in Australia: leveraging a global employment platform, such as Oyster. Our all-in-one platform enables seamless onboarding and management of remote workers based in Australia and elsewhere—including more than 180 countries worldwide. Oyster streamlines hiring across borders by handling all employment-related tasks for your company, including:
- Onboarding
- Payroll
- Compliance with local labor and tax laws
- PTO management
- Benefits administration
- Offboarding
Learn more about how Oyster can help you build your global dream team.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
