Hiring in Australia
Hiring in Australia in 2026 is expensive, heavily regulated, and now carries personal criminal risk for the executives who sign off on payroll.
Hiring in Australia in 2026 is expensive, heavily regulated, and now carries personal criminal risk for the executives who sign off on payroll.
The cost line that breaks most foreign Finance teams is not the Superannuation Guarantee. It is the way the Closing Loopholes reforms count sham-contracting penalties: each pay period is a separate contravention, so a 12-month fortnightly contractor engagement the Fair Work Ombudsman later treats as employment becomes 26 stackable contraventions at up to A$82,500 each, landing close to A$2.1 million in civil penalties before serious-contravention multipliers apply.
From 1 January 2025, intentional wage theft is also criminal. Individuals face up to 10 years in prison, corporations up to A$8.25 million in fines (or three times the underpayment if greater), and the Fair Work Ombudsman has signalled it will prosecute systemic or repeat cases.
Once Super Guarantee at 12%, state payroll tax, workers’ compensation, leave loading, long service leave accrual, and Modern Award allowances are all included, the true employment cost in Australia lands close to 118 to 120% of base salary before any EOR fee, with sharply higher tail risk if classification or award mapping is wrong.
This guide explains what hiring in Australia actually costs in 2026, how Closing Loopholes and Payday Super reshape the compliance picture, and when it makes sense to use an Employer of Record, run payroll through your own Pty Ltd, or hire contractors instead.
Australia at a glance
Hiring an engineer on an A$140,000 Sydney salary typically adds around A$25,000 to A$28,000 a year in mandatory employer costs, mainly through Super Guarantee, NSW payroll tax, workers’ compensation, and long service leave accrual. Our Australia payroll and employment facts set out the Super Guarantee rate, the redundancy pay scale and notice rules, each with its official source and date.
Once award allowances, leave loading, and EOR fees are included, the true loaded cost lands between A$175,000 and A$189,000 on the same A$140,000 base, so 1.25x to 1.35x salary. Which end you land on depends on whether your EOR charges a flat per-head fee or a percentage of payroll.
For small teams, an EOR is usually cheaper than setting up a Pty Ltd. The break-even point sits around 10 to 15 hires, and the entity case strengthens when staff are spread across multiple states.
Sham-contracting exposure is now counted per pay period. A 12-month fortnightly engagement reclassified as employment generates 26 stackable contraventions and a civil ceiling near A$2.1 million for a body corporate.
Labour hire licensing is live in Queensland, Victoria, South Australia, the ACT, and the Northern Territory, and it now acts as a quiet first-stage filter on any EOR shortlist.
Australian-registered EOR providers worth shortlisting
Employment Hero
Australian-headquartered with the deepest Modern Award engine in the EOR market. Native QLD/VIC/SA/ACT/NT labour hire licensing.
Deel
Owns an Australian Pty Ltd entity. Broadest 150+ country coverage for multi-jurisdiction teams alongside Australia.
Remote
Owns an Australian Pty Ltd entity with in-house payroll. Transparent flat-fee model, not a partner network.
Why do international companies hire in Australia?
Australia is not the cheapest market in the Asia Pacific, and our editorial team has never claimed otherwise. It ends up on the shortlist for five specific reasons that come up again and again in what we hear from companies hiring in Australia.
- English-speaking technical depth. Sydney CBD and North Sydney are still the deepest senior engineering, fintech, and SaaS market. Parramatta is the lower-cost-of-living satellite. Melbourne Docklands holds the data, AI, and design clusters, and Brisbane anchors regulated industries and resources.
- Common-law familiarity for US and UK buyers. The National Employment Standards, the Fair Work Commission’s unfair-dismissal jurisdiction, and the Fair Work Act 2009 read familiarly. Notice on tenure, four weeks of annual leave, and parental leave entitlements all map onto recognisable concepts.
- APAC bridge market. One or two Sydney hires let a UK or US business test demand in the region before committing to an entity in Singapore or Hong Kong. The Skills in Demand visa replaced the Temporary Skill Shortage stream in late 2024 and shortened the route for scarce roles.
- Productive working week. The standard 38-hour week under the National Employment Standards plus reasonable additional hours leaves room for genuine on-call expectation in engineering and trading roles, and full-time hours run above the OECD median in the ABS Labour Force Survey.
- Useful time zone. Sydney overlaps Singapore mornings, US west-coast pre-open, and London late afternoon. A Sydney trading or client-success desk catches three markets at a payroll cost a Singapore desk cannot match on engineering seniority.
The trade-offs are the cost build-up we cover in the next section, and the way Closing Loopholes quietly inflates the downside on any contractor model. That combination is why Australia looks worse on cost-only comparisons and better when you factor in retention and the depth of senior talent.
What are the employer costs of hiring in Australia?
The main employer costs in Australia are the Super Guarantee paid into the employee’s chosen super fund, state payroll tax that varies by jurisdiction, workers’ compensation insurance set by industry class, leave loading on annual leave, and fringe benefits tax on any non-cash benefits such as a novated car lease.
On an A$140,000 salary, core employer costs typically add around A$25,000 to A$28,000 a year before optional benefits or EOR fees. Once long-service leave, modern award supplements, and casual conversion exposure are factored in, the true employment cost is often far higher than foreign employers expect.
The table below shows the typical cost structure for an A$140,000 hire in Australia.
| Cost line | Rate | Annual on an A$140,000 hire | Important considerations |
|---|---|---|---|
| Super Guarantee (SG) | 11.5% to 30 Jun 2025; 12% from 1 Jul 2025 | A$16,800 | Bonuses and most cash allowances are inside ordinary time earnings; Payday Super 7-day window starts 1 Jul 2026. |
| State payroll tax (NSW shown) | 5.45% | A$7,630 | Rate and threshold vary by state; grouped wages aggregate across related entities. |
| Workers’ compensation | 0.5-0.8% office; 3-6% industrial | A$700-A$1,120 (office) | Cover required in each state where staff sit; confirm the industry class before signing off. |
| Annual leave loading | 17.5% on 4 weeks’ base | A$1,884 | Most Modern Awards keep leave loading; annualised salaries sometimes absorb it. |
| Long service leave accrual (NSW) | ~1.67% | A$2,338 | State-based entitlement; payable on most exits after 5 to 10 years’ service. |
| PAYG withholding (withheld from salary) | 19/32.5/37/45% + 2% Medicare | Withheld from gross | STP Phase 2 requires real-time disaggregation at every pay event. |
| FBT on novated lease or salary packaging | 47% grossed-up if applicable | Variable | Most EORs refuse to administer novated leases; the ones that do charge a separate admin fee. |
| Core employer cost on top of base | ~18-20% | A$25,000-A$28,000 | Award allowances, overtime, and FBT-eligible benefits usually add another 3 to 8% on top. |
Then add the EOR fee, and note that the two pricing models are not the same number. A flat USD 599 per employee per month is about A$10,400 a year at the euro reference rate we pin (EUR 1 = USD 1.1383 = AUD 1.6518). A percentage deal at 10 to 15% of gross payroll would be A$14,000 to A$21,000 on this salary. Depending which you are quoted, the total annual cost lands between A$175,000 and A$189,000 on an A$140,000 base, so 1.25x to 1.35x salary. Any quote that shows only Super on top of salary is a placeholder, not a real budget number.
State payroll tax deserves a closer look. Thresholds apply to grouped Australian wages across related entities and across states, so the marginal rate kicks in once aggregate national payroll crosses roughly A$1.5 million.
Victoria’s threshold is A$700,000, NSW is A$1.2 million, Queensland is A$1.3 million, and South Australia is A$1.5 million, with marginal rates between 4.75% and 6.85%. On an EOR’s book the grouped wages will almost always be past every threshold, so the marginal rate applies from your first hire and should be in the model from day one.
What changed in Australia for 2026?
Six changes that affect any 2026 hiring plan for Australia, in order of how much they shift the budget or the compliance picture.
| Change | Effective date | What it does | Action for HR/Finance |
|---|---|---|---|
| Payday Super arrives | 1 Jul 2026 | Every SG contribution must reach the employee’s fund within 7 business days of payday; Small Business Superannuation Clearing House retires | Stress-test the clearing-house workflow against the 7-day window before 1 Jul 2026 |
| Wage theft criminalised | 1 Jan 2025 | Intentional underpayment is now criminal: up to 10 years’ prison or A$8.25M corporate fine (or 3x underpayment) | Move award and SG diligence to board-level review; brief responsible officers on personal liability |
| Super Guarantee rises to 12% | 1 Jul 2025 | Final step in the legislated ramp from 10% in 2021 | Update the offer-letter loaded-cost calculator; ~A$700 extra employer cost on every A$100k base |
| Closing Loopholes sham-contracting test tightened | In force 2024-25 | Section 357 defence shifted from “not reckless” to “reasonable belief”; each pay period is a separate contravention | Document active classification diligence for every contractor and revisit it annually |
| Right to Disconnect extends to small business | 26 Aug 2025 | Employees can refuse unreasonable out-of-hours contact; the Fair Work Commission can issue stop orders | Refresh on-call policies; brief managers on the reasonableness test for engineering and support rotations |
| Casual conversion “employee choice” pathway | 26 Aug 2024 | Employer-initiated offer replaced by an employee-initiated request after 6 months (12 months in small business) | Review casuals on regular shifts for 12+ months; the 25% loading does not buy immunity from reclassification |
Read together, the Closing Loopholes Acts move certain payroll failures from civil into criminal territory, with personal liability for responsible officers. Audit and risk committees that used to treat underpayment as a remediation line now treat it as a personal-liability line for executives. Building that step into the 2026 governance calendar is cheaper than retrofitting it after a Fair Work Ombudsman investigation.
What employment laws should you know before hiring in Australia?
The Fair Work Act 2009 and the 11 National Employment Standards sit at the centre. Modern Awards layer on top. The National Employment Standards set the floor, the award is the working contract, and the individual contract cannot reduce either.
A provider quoting the “Australian standard” without naming the Modern Award is hiding 3 to 8% of the real cost. The Clerks Award, the Professional Employees Award, and the General Retail Industry Award carry materially different allowance and overtime stacks on the same base salary.
| Standard | Statutory minimum (NES) | Common award uplift | Practical note |
|---|---|---|---|
| Working week | 38 hours plus reasonable additional | Award span-of-hours caps tighter | Reasonableness test reinforced by Right to Disconnect from Aug 2024 (large) and Aug 2025 (small) |
| Annual leave | 4 weeks (5 for continuous shift workers) | 17.5% leave loading in most awards | Annualised salaries under the Professional Employees Award often absorb the loading |
| Personal/carer’s leave | 10 days a year + 2 days compassionate per occasion | Top-ups in healthcare and emergency services | Accrues progressively; cash-out limited to specific circumstances |
| Parental leave (unpaid) | 12 months + right to request a further 12 | Award and policy top-ups common | Commonwealth Paid Parental Leave: 22 weeks in 2025-26, 26 weeks in 2026-27 |
| Long service leave | State-based; NSW 8.67 weeks at 10 years | Pro-rata from 5 years on certain triggers | Portable in construction, contract cleaning, and community services under statutory schemes |
| Notice period | 1 week (under 1y) to 5 weeks (5y+ and 45+) | Awards or contracts may set longer | Senior contracts routinely run 3 to 6 months |
| Redundancy pay | 4 weeks (1-2y) to 16 weeks (9-10y) | Award-based uplifts common | Small businesses (under 15 staff) are exempt from NES redundancy |
| Unfair dismissal eligibility | 6 months’ service (12 months in small business) | 21-day filing window after dismissal | High-income threshold A$175,000 (2025-26) excludes award-free roles |
| Probation | No statutory cap; minimum employment period is 6m or 12m | Contract terms set the length | Cannot extend beyond the minimum employment period to defer unfair-dismissal protection |
| Fixed-term contracts | Capped at 2 years total including one renewal | Limited statutory exceptions | Breach converts to permanent employment by operation of law |
| Award-free threshold | A$175,000 high-income threshold (2025-26) | Requires a written guarantee of annual earnings | Many senior engineering and product roles cross the line; the guarantee must be drafted, signed, and on file |
| STP Phase 2 reporting | Mandatory at every pay event | Real-time disaggregation of gross pay | Foreign earnings-code mappings often under-classify; the ATO reads that as a lodgement error |
Unfair-dismissal procedural failure is what the Fair Work Commission orders against employers on most often. The remedy is reinstatement or compensation of up to six months’ pay, and the procedural record needs to be built over the months before termination, not assembled afterwards. Verbal warnings, undated notes, and missing response opportunities are the recurring failure points.
Should you use an EOR or set up a Pty Ltd in Australia?
The numbers are more specific than the usual “10 employees” rule of thumb. The right answer depends on whether you can produce a resident director, how many states the staff will sit in, and whether the role mix is award-heavy.
| Factor | EOR | Own Australian Pty Ltd |
|---|---|---|
| Minimum capital | None (provider’s entity) | No statutory minimum; A$1 share capital is common |
| Setup time | 3-10 business days | ACN issued same day via ASIC Form 201; ABN typically 1-5 business days |
| First-year all-in cost | USD 399-799/month per hire or 10-15% of payroll | A$15,000-A$30,000 (ASIC fee, registrations, accounting, resident director) |
| Annual run-rate from year 2 | Flat per hire | A$8,000-A$15,000 before payroll provider |
| Break-even headcount | Cheaper at 1-10 hires (almost always) | Cheaper from 15+ on per-head economics |
| Wind-down | Contract notice + NES redundancy | 3-6 months deregistration, A$5,000-A$10,000 legal and accounting |
| Director residency | Not applicable (provider holds) | At least one director ordinarily resident in Australia under the Corporations Act 2001 |
| Modern Award control | Provider sets the default; depth varies sharply by EOR | Full control of award mapping and high-income guarantee structuring |
| State payroll-tax aggregation | Provider’s book is usually past the threshold (marginal rate from hire 1) | Stand-alone threshold per state; aggregation across your group |
| Labour hire licensing diligence | Provider must hold an active licence in QLD, VIC, SA, ACT, and NT (whichever apply) | Not applicable (you employ directly) |
| 5-year cumulative cost, 10-person team | ~A$1.0M-A$1.2M (USD 599/mo per head) | ~A$60,000-A$90,000 run-rate post setup |
Decision rule
Choose an EOR if:
- Your Australian headcount is 1 to 10 hires
- You don’t have a candidate for the resident-director requirement under the Corporations Act 2001
- The roles are short-tenure, APAC-bridge, or pilot-phase
- You need to start payroll within two weeks and the labour hire licensing diligence has been passed
Set up your own Australian Pty Ltd if:
- You have 15+ hires or staff running across three or more states
- You can produce a resident director and absorb the A$15,000 to A$30,000 first-year set-up
- The role mix is award-heavy and you need direct mapping control
- Government tendering or regulated-industry buyer requirements force an Australian counterparty
Australian EOR services intersect with labour hire licensing in Queensland, Victoria, South Australia, the ACT, and the Northern Territory. An EOR supplying workers in any of those states without an active licence is operating unlawfully. That rule is what separates a directly licensed Australian operator from a reseller working through a partner network.
One practical detail that’s often missed during procurement is the licence-status check between the EOR provider and its operating entity. Some providers route Australian hires through a sister entity that holds the labour hire licence, while billing flows through a different group entity. Always ask for the licence numbers in each relevant state and the legal name of the entity that will appear on the employment contract itself, not just on the master services agreement, and check that entity on ASIC company search before you sign.
The Sydney fintech founder who tried to scale from three to 14 Australian hires on an EOR last year ran exactly this calculation during his third-quarter post-budget review. He kept the original three EOR hires for the bridge period, set up a Pty Ltd in October for the 11 expansion roles, and used a resident-director nominee until his COO relocated in the first quarter the following year. That split is becoming common in what we hear from companies hiring in Australia.
What are the biggest compliance risks when hiring in Australia?
Three risks, in order of how often they catch our readers out: sham contracting under the new “reasonable belief” test, Modern Award misclassification at scale, and the casual-conversion re-test under the August 2024 reforms.
| Risk | Legal source | What it changed | Practical effect |
|---|---|---|---|
| Sham contracting | Fair Work Act s.357 after Closing Loopholes No. 1 | Defence shifted from “not reckless” to “reasonable belief” supported by active diligence | Each pay period a separate contravention; 26 stackable on a 12-month fortnightly engagement at up to A$82,500 each (~A$2.1M ceiling) |
| Wage theft (criminal) | Closing Loopholes No. 2 from 1 Jan 2025 | Intentional underpayment criminalised | Up to 10 years’ prison for individuals; A$8.25M corporate fine (or 3x underpayment) |
| Modern Award misclassification | Fair Work Act + 121 Modern Awards | Wrong award (or wrong classification) creates back-pay over the entire engagement | Roles must be re-tested on promotion or scope change; foreign cost models under-allow 3 to 8% |
| Casual conversion (employee choice) | Closing Loopholes amendments from 26 Aug 2024 | Statutory definition of casual employment; employee-initiated request after 6 or 12 months | The 25% loading does not buy immunity; regular shifts for 12+ months trigger review |
| Payday Super | ATO Payday Super legislation, from 1 Jul 2026 | 7-business-day SG window; quarterly cadence ends; clearing house retires | Any delay triggers the SG Charge: non-deductible, interest-bearing, with a per-employee admin fee |
If a sham-contracting finding lands, the penalties stack up as follows:
- Each pay period is counted as a separate contravention. A 12-month fortnightly engagement equals 26 stackable contraventions.
- Civil penalty of up to A$82,500 per contravention for a body corporate (2024-25 indexation).
- Serious contravention (businesses with 15+ employees): the greater of A$495,000 or three times the underpayment.
- Retrospective leave, super, notice, and redundancy back-pay over the full engagement.
- Criminal exposure under Closing Loopholes No. 2 where the underpayment was intentional.
State payroll-tax aggregation is the other risk procurement teams routinely under-model. Thresholds apply to grouped Australian wages across all states, and once aggregate national payroll crosses roughly A$1.5 million an employer will almost always trip at least one state threshold. EOR providers that fail to monitor aggregation across their book or across client entities create unbudgeted liabilities, so buyers should ask for the aggregation methodology in writing before signing.
The Fair Work Ombudsman’s 2025-26 strategic intent focuses on systemic underpayment, large-employer conduct, and the gig and franchise sectors. The agency has the budget to investigate, the powers to compel evidence, and a public pipeline of cases that it has already taken to court since 2024.
WhichPayroll editorial view
If a provider says they cover Australia through a “partner network”, treat that as a warning sign during your procurement check, not a feature to be proud of. A partner-network arrangement leaves the labour hire licence with a company you haven’t contracted with directly. That is exactly the structure the Queensland, Victorian, South Australian, ACT, and Northern Territory licensing regimes were designed to deter.
Ask for the legal name and ABN of the company that will actually employ your hire, plus the labour hire licence number in each relevant state. If the answer is anything other than a directly licensed Australian operator you can verify on ASIC and the state register, spend the money with someone else.
In our view, that one question gets through every legal review and is the single most useful filter you can use when shortlisting providers for Australia.
A real example we’ve come across illustrates how the section 357 contravention-count maths works in practice. A US SaaS vendor engaged six Sydney contractors on monthly ABN invoices to staff a regional client-success function through a partner-network EOR with a single Queensland-registered licence.
The contractors worked exclusive hours, used company laptops with company single sign-on, attended daily standups, and had their performance reviewed in the vendor’s internal HR tool. Within 11 months a Fair Work Ombudsman investigation reclassified all six.
Per-pay-period counting across the 11-month engagement generated 66 contraventions across the six workers. Settlement and back-pay landed near A$1.4 million before legal fees, on roles that had been priced as contractor work at A$110 an hour.
How the work is organised matters more than what the contract calls the relationship, every time.
Permanent-establishment drift is the quieter version of the same problem. An EOR does not eliminate the risk where the parent company has substantial economic activity in Australia.
A senior leader who closes deals on Australian soil, manages staff onshore, or signs material contracts in-country can crystallise PE exposure for the parent. That is a tax-residency question first, but it sits in the EOR conversation because the EOR model is sometimes used to defer the question past the point where it should have been answered.
Which hiring model fits your Australia plans?
Here’s how we think about choosing between the options, matched to the real questions People Ops leads bring to us.
| If you… | Best model | Why | See also |
|---|---|---|---|
| Are hiring 1-3 employees to test APAC bridge demand | EOR | No resident-director requirement; payroll live in days; no Modern Award learning curve | Australia EOR providers and pricing |
| Have 4-10 hires concentrated in one or two states | EOR still cheaper; model Pty Ltd at year-2 review | Break-even sits at 10-15; run the labour hire licensing diligence in every relevant state | Australia EOR providers and pricing |
| Have 15+ hires or roles across 3+ states | Own Pty Ltd + global payroll | Year-2 run-rate is lower; direct award mapping; no provider template friction | Australia global payroll providers |
| Engage a genuinely autonomous specialist with multiple clients | Contractor (ABN) | “Reasonable belief” defence holds if there is no exclusivity, scheduling, tooling-mediated control, or onshore management line | Australia contractor management guide |
| Run short-tenure APAC sales or seasonal regional roles | EOR (even alongside a Pty Ltd) | Avoids state payroll-tax aggregation hit on a small standalone Pty Ltd; flexible exit | Australia EOR providers and pricing |
| Have casuals running regular shifts for 12+ months | Re-test casual classification immediately | Employee-choice conversion pathway active from 26 Aug 2024; the 25% loading is not a shield | Australia EOR providers and pricing |
| Have crossed roughly A$1.5M aggregate national payroll | Pty Ltd + global payroll partner with multi-state registration | Almost certainly tripping at least one state payroll-tax threshold; needs active monitoring | Australia global payroll providers |
The single most useful thing a People Ops lead can do is build the full cost picture for the specific Modern Award that applies to the role they’re hiring, not a generic Australian average. The award decides the leave loading, the allowance schedule, the penalty rates, and the overtime ladder. Doing that one piece of work removes roughly 80% of the surprises that turn up in a budget review three months later.
Which EOR Providers Do We Recommend for Australia?
These five providers run their own Australian Pty Ltd entities with verifiable ASIC company-search records and, where applicable, active state labour hire licences. Anything described as “Australian coverage via partner network” should be treated as an extra layer of counterparty risk, not as the same thing as the five below.
| Provider | Australian entity | HQ city | Pricing band | Best for | View provider |
|---|---|---|---|---|---|
| Employment Hero | Employment Hero Pty Ltd (Australia-headquartered) | Sydney | ~A$100-A$150 per employee per month | Deepest Modern Award engine; Australia-first product roadmap | View Employment Hero → |
| Deel | Deel Australia Pty Ltd | Sydney | ~USD 599/mo | Broadest 150+ country coverage with a full Australian entity | View Deel → |
| Remote | Remote Australia Pty Ltd | Sydney | ~USD 699/mo | Owned entity, in-house payroll, transparent flat fee | View Remote → |
| Rippling | Rippling Australia Pty Ltd | Sydney | ~USD 500-700/mo | IT and HRIS integration depth; verify Modern Award update cadence before signing | View Rippling → |
| Multiplier | Multiplier Technologies Australia Pty Ltd | Sydney | USD 459-499/mo | Best value; APAC strength; test Modern Award depth before signing on award-heavy roles | View Multiplier → |
Before you send the Australian offer letter
- Confirm which Modern Award the EOR will apply (Professional Employees, Clerks, General Retail Industry, or sector-specific) and the classification grade.
- If the role is award-free, confirm the written guarantee of annual earnings is on file and sits above the A$175,000 high-income threshold (2025-26).
- Verify the EOR’s labour hire licence numbers in Queensland, Victoria, South Australia, the ACT, and the Northern Territory (whichever apply) before signature.
- Get the legal name and ABN of the actual employing entity, not just the master services agreement counterparty.
- Cross-check that entity on ASIC company search and confirm it is the same entity that appears on the employment contract.
- Confirm the Super Choice paperwork is in the new-hire pack and that the default fund nomination is current.
- Confirm workers’ compensation cover in every state the hire will sit in (NSW icare, WorkSafe VIC, WorkCover QLD, or the local equivalent).
- Stress-test the SG cadence against the 7-business-day Payday Super window before 1 Jul 2026.
First 90 days after the Australian hire starts
- Audit the Modern Award classification against the actual scope of work; correct it in writing if the duties have drifted from the offer.
- Confirm the SG contribution arrived in the nominated fund within the statutory window (and within 7 business days from 1 Jul 2026).
- Confirm STP Phase 2 disaggregation is mapping correctly across allowances, overtime, and termination-payment categories.
- Brief the hire on the right-to-disconnect policy and on-call expectations (the reasonableness test applied to small business from 26 Aug 2025).
- If the role is casual or fixed-term, calendar the 6 or 12-month conversion check and the 2-year fixed-term cap.
- If contractor-adjacent, build the section 357 “reasonable belief” diligence file: exclusivity, control, tooling, scheduling, onshore management line.
- Review state payroll-tax aggregation if national grouped wages are approaching A$1.5 million.
- Confirm long service leave accrual is recorded against the correct state statute for the employee’s primary workplace.
Frequently asked questions about hiring in Australia
What is the total employer cost in Australia for an A$140,000 Sydney hire?
On an A$140,000 base, Super Guarantee at 12% adds A$16,800, NSW payroll tax at 5.45% (above the A$1.2 million grouped threshold) adds roughly A$7,630, and workers’ compensation for an office role runs A$700 to A$1,120. Long service leave accrues at about 1.67% of base (A$2,338), pushing the all-in employer cost to roughly A$167,500 to A$168,000 before any EOR fee. Major EOR providers price on top either as a flat USD 599 per employee per month, about A$10,400 a year, or at 10 to 15% of payroll, which on this salary is A$14,000 to A$21,000. Read the loaded cost at 1.27x to 1.35x of base salary once an EOR is included.
What changes on 1 July 2026 with Payday Super?
Payday Super takes effect on 1 July 2026 and requires every Super Guarantee contribution to reach the employee’s nominated super fund within 7 business days of each payday. The quarterly contribution cycle ends and the Small Business Superannuation Clearing House is being retired alongside the change. Late or missing contributions trigger the non-deductible Super Guarantee Charge automatically, with interest and a per-employee admin fee. Most payroll teams have not stress-tested their clearing-house workflow against a 7-day window, and that work should happen well before mid-2026.
Why do EOR quotes for Australia vary by 3 to 8% on the same hire?
Because Australia has 121 Modern Awards, and each one sets different minimum pay, allowances, penalty rates, and overtime ladders. A provider quoting an “Australian baseline” without naming the award (Professional Employees, Clerks, General Retail Industry, or sector-specific) is hiding cost. Ask which award the EOR will apply and benchmark it against the Fair Work Commission’s published award for that occupation before signing. The 17.5% annual leave loading, the overtime trigger, and the allowance schedule all change by award.
How does Closing Loopholes change sham-contracting exposure?
Closing Loopholes No. 1 shifted the section 357 defence from a “not reckless” test to a “reasonable belief” test, which requires active diligence rather than the absence of recklessness. Each pay period is counted as a separate contravention, so a 12-month fortnightly engagement reclassified as employment generates 26 stackable contraventions at up to A$82,500 each for a body corporate. The civil ceiling lands near A$2.1 million before serious-contravention multipliers apply (the greater of A$495,000 or three times the underpayment for businesses with 15 or more employees), and Closing Loopholes No. 2 added criminal exposure from 1 January 2025 of up to 10 years’ imprisonment for individuals and A$8.25 million for corporations.
Which EOR providers hold active Australian labour hire licences?
Labour hire licensing applies in Queensland, Victoria, South Australia, the ACT, and the Northern Territory. An EOR supplying workers in any of those states without an active state licence is operating unlawfully. Employment Hero, Deel, Remote, Rippling, and Multiplier all operate through directly-owned Australian Pty Ltd entities, though buyers should still verify the specific licence numbers and the entity on the contract before signing. Pebl (formerly Velocity Global) and Papaya Global typically operate through partner networks in Australia, which surrenders one layer of accountability and complicates licensing diligence in the five relevant states.
How do I verify an EOR’s Australian entity on ASIC?
Ask the EOR for the legal name and ABN of the employing entity (not the group parent), then search the ASIC company register or the Australian Business Register at abr.gov.au. The ASIC company search confirms the entity is active, identifies the directors (including the resident director under the Corporations Act 2001), and shows the registered office. A current company extract costs around A$9. Do this before signing the employment contract, not after, because the entity name on the contract is the counterparty the Fair Work Commission and the Fair Work Ombudsman will look at if the relationship is disputed.
Is wage theft a criminal offence in Australia?
Yes. From 1 January 2025, intentional wage theft is a criminal offence under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024. Penalties run to 10 years’ imprisonment for individuals and A$8.25 million for corporations, or three times the underpayment if greater, and the Fair Work Ombudsman has signalled it will prosecute systemic or repeat cases. The change reframes award and SG diligence at board level: audit and risk committees that previously treated underpayment as a remediation line now treat it as a personal-liability line for executives.
When does the casual-conversion “employee choice” pathway apply?
From 26 August 2024, casual conversion shifted from an employer-initiated offer to an employee-initiated request. An employee can request conversion after 6 months in a business of 15 or more employees, or after 12 months in a small business, where they have worked a regular pattern of hours. The statutory definition of casual employment introduced by the same reforms means an arrangement that looks regular and predictable will not stay casual just because the contract says so, and the 25% casual loading does not buy immunity from later reclassification. Treat any casual working regular shifts for 12+ months as a reclassification trigger and review the relationship rather than relying on the contract label.
Can I dismiss an Australian employee for poor performance, and at what cost?
Yes, but the test is a valid reason, procedural fairness, and notice (or pay in lieu). Unfair dismissal protection applies after 6 months’ minimum service (12 months for small businesses with fewer than 15 employees), and the applicant has 21 calendar days from dismissal to file with the Fair Work Commission. The Commission most often finds against employers on procedural fairness: no documented warnings, no written response opportunity, no dated performance trail. The remedy is reinstatement or compensation of up to six months’ pay, so budget at least 10 to 16 weeks of total compensation plus legal costs for a contested dismissal and run the process with Australian employment counsel from week one.
When does my Australian payroll trigger state payroll-tax aggregation?
State payroll-tax thresholds apply to grouped Australian wages across related entities and across states. Once aggregate national payroll crosses roughly A$1.5 million, an employer will almost always trip at least one state threshold (Victoria at A$700,000, NSW at A$1.2 million, Queensland at A$1.3 million, with marginal rates from 4.75% to 6.85%). On an EOR’s book the provider’s grouped wages will usually be past every threshold, so the marginal rate applies from your first hire. Ask the EOR for its payroll-tax aggregation methodology in writing before signing, especially if you are running parallel entities in more than one Australian jurisdiction.
Shortlist these Australian-registered EOR providers
Employment Hero
Australian-headquartered with the deepest Modern Award engine in our 2026 audit. Native labour hire licensing footprint.
Deel
Owns an Australian Pty Ltd entity. Best fit for multi-country teams alongside Australia.
Remote
Owns an Australian Pty Ltd entity with in-house payroll. Transparent flat fee, not a partner network.
Our verdict for People Ops leads
If your Australian headcount is 1 to 10 and concentrated in one or two states, use an EOR and pick one of the five verified Pty Ltd providers above, after confirming the labour hire licence numbers in Queensland, Victoria, South Australia, the ACT, and the Northern Territory wherever staff will sit. If you have 15 or more hires, or staff running across three or more states with a resident director on hand, setting up a Pty Ltd usually pays back within 18 months on direct cost alone.
If you’re leaning towards contractors, run the section 357 “reasonable belief” diligence before signing anything. Each pay period is a separate contravention under Closing Loopholes No. 1, and the per-pay-period counting will undo any saving inside one audit cycle.
The first practical step is to work out the full cost for the specific Modern Award that applies to the role you plan to hire, rather than relying on a generic Australian average. Pair that with a Payday Super readiness check for the 1 July 2026 window and you remove roughly 80% of the budget surprises that show up three months later. It is the number that holds up across every Treasury and Legal review on the way to an offer letter, and it is the diligence file the Fair Work Ombudsman will ask for first if the relationship is ever disputed.
Running payroll for Australia employees? See our guide to payroll in Australia.
Running payroll for Australia employees? See our guide to payroll in Australia.