What Is an Employer of Record in Australia?

Thinking of adding Australian talent to your team? Good on ya!

Australia is a powerhouse of skilled professionals across sectors like technology, healthcare, and finance. With a robust economy and a reputation for innovation, it's an ideal location for businesses ready to expand.

But there are some hurdles. The labour laws? Not the easiest to navigate.

That's where an Employer of Record (EOR) in Australia steps in. They simplify the hiring process, ensure compliance with local regulations, and help you avoid the headache of paperwork.

Let me explain how partnering with an EOR in Australia can open doors for smooth business growth. 

Ready? Let’s dive in.

What Is an Employer of Record in Australia?

An Employer of Record in Australia is a third-party organisation that takes care of all the legal responsibilities tied to employment for your team. 

From payroll and taxation to managing employment contracts and ensuring local labour law compliance — they've got it all covered.

In other words, the EOR becomes your team's legal employer in Australia, managing the details while you focus on guiding your team's day-to-day operations.

My pro tip: If you want to dig into the details, check out my guide What Does EOR Stand For? for a thorough overview.

Why Do Businesses Choose an EOR in Australia Over Hiring Directly?

Here are the main reasons why partnering with an EOR in Australia is a smart move:

• Speedy Market Entry: No need to jump through the hoops of establishing a legal entity. An EOR can get you up and running in just 2-4 weeks, compared to the months it would take to set up a local entity.
• Compliance Support: Australian labour law can be tricky, but an EOR will guide you through it like a pro.
• Lower Costs: Skip the costs of establishing a local entity and maintaining a physical office.

An EOR connects you with Australia's deep talent pool without the bureaucracy and red tape.

But what exactly makes Australia such an attractive hiring market? Let's unpack it.

Understanding the Australian Employment Landscape

When I first looked into hiring in Australia, I realised that the employment landscape had its fair share of quirks. 

Australia is pro-business but still has strict labour protections you must navigate carefully. Here’s what you should know when hiring Australian talent:

Standard Working Hours and Overtime

The typical workweek in Australia is 38 hours, usually spread across five days. Many companies also support flexible work arrangements — remote and hybrid models are popular.

Overtime in Australia is compensated at 1.5 times the hourly rate for the first two to three hours, then at double time. If you’re not compliant, penalties can get quite hefty.

Compensation and Currency

Australia uses the Australian Dollar (AUD), and wages are competitive, especially in sectors like tech and finance. 

The country has a well-established minimum wage of AUD 23.23 per hour (2024), among the highest globally.

On top of that, many Australian companies provide additional perks, like superannuation contributions to help employees save for retirement. 

It’s these kinds of benefits that make Australian workplaces particularly attractive.

Public Holidays and Vacation Leave

Australia has a range of public holidays, including:

• Australia Day (January 26)
• Anzac Day (April 25)
• Queen's Birthday (varies by state)
• Christmas Day (December 25)

Full-time employees are entitled to at least 20 days of paid annual leave, along with 10-12 public holidays depending on the state or territory.

Taxes and Social Contributions

To stay compliant in Australia, understanding the tax system is crucial:

Income Tax

Employees in Australia pay income tax on a progressive scale ranging from 0% to 45%, depending on their earnings. 

Employers are responsible for withholding tax from employee salaries, which ensures compliance.

Superannuation Contributions

Employers are required to contribute 11% of an employee’s earnings to their superannuation fund. 

This fund is Australia’s version of a retirement savings scheme, ensuring workers have a comfortable post-work life.

Leave Policies and Parental Benefits

Here’s what you should know about leave policies and parental benefits when hiring in Australia.

Sick Leave

Employees in Australia are entitled to 10 days of paid personal leave each year, which can be used for illness or to care for a family member.

Parental Leave

Australia provides up to 18 weeks of paid parental leave funded by the government, with additional unpaid leave available. 

Employers often top up these benefits, creating an even more attractive environment for employees considering a family.

Probation Period and Termination

Probation periods in Australia usually last between 3 to 6 months, offering a flexible arrangement for both employers and employees.

The notice period in Australia depends on how long the employee has worked with the company, typically ranging from 1 week to 4 weeks. 

Employers must also ensure compliance with Australia’s Fair Work Act, which aims to protect both parties in the employment relationship.

Now that you know all of this, the question remains: how do you choose the best EOR in Australia? Let me help.

Choosing the Best EOR in Australia

Picking the right Employer of Record in Australia is critical to your success. 

Here’s what to look for:

• Expert Knowledge of Local Labour Law: Ensure your EOR knows the Fair Work Act inside and out.
• Comprehensive Services: They should handle everything from HR and payroll to compliance and employee benefits.
• Transparent Costs: A clear and straightforward fee structure is essential.
• Proven Success: Look for reviews and testimonials from other businesses that have successfully expanded into Australia.
• Local Presence: You want a partner with a strong local team who understands the Australian market.

And if all of this sounds too complicated? Well, I’ve got an even easier solution.

Look Beyond Australia’s Labour Market

While Australia is a fantastic choice, there are other regions worth considering, too. 

Countries like South Africa, Canada, or even Japan can provide excellent talent pools, each with its own unique strengths.

South Africa offers great access to an English-speaking workforce at competitive rates, while Mexico boasts a highly skilled workforce with a time zone similar to the US. 

Indonesia has a tech-savvy workforce known for discipline and innovation.

There’s a lot of options out there, and the right EOR can help you navigate any market.

My Final Thoughts

And there you have it: hiring in Australia doesn’t have to be a headache.

With the right Employer of Record in Australia, you can tap into top talent while leaving the complexities of compliance and payroll to the experts.

Let your EOR handle the red tape so you can focus on what really matters — growing your business.