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Employing in Australia

At a glance

Employment in Australia

Foreign companies that employ workers in Australia face several challenges and must adhere to the legal and regulatory framework that is in place. There are a range of legislative obligations in regards to conditions of employment and visa status. Specific standards are defined by the Fair Work Act, statutory “Awards” and collective agreements such as “Enterprise Bargaining Agreements”. Most notably there are restrictions depending on the type local entity they have incorporated. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well.  Our guide explains Australian policies on contracts, probation periods, termination procedures, leave, and payment of benefits.

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Payroll & Tax in Australia

Complying with local payroll and tax requirements is essential for a company doing business in Australia.  Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation.  Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in Australia

Foreign workers are required to have the proper visas and work permits in Australia, as established by immigration laws.  To secure a visa for an employee a company will generally first need to apply to be an approved sponsor company through the Department of Immigration and Border Protection. The types of documents required for this process can be a problem for companies just entering the Australian market.   The most common work permit is called a 457 Temporary Work (Skilled) Visa.

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Incorporation

There are several business structures available for incorporation in Australia, and each has advantages and disadvantages.  In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity.  Our guide has a comparison of the time and cost for incorporating standard company structures including a Propietary Company (Subsidiary), Representative Office, and Branch Office.

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GEO Solutions or DIY Employment in Australia?

Companies entering Australia must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Australia Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Australian entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and may be a costly option.  Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Australia

Payroll Australia
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Payroll is normally monthly and paid at the end of the month. But other payroll dates are also quite common.

 
Grossed income Tax Rate (%)
0 – 18,200 AUD Nil
18,201 – 37,000 AUD 19c for each $1 over $18,200
37,001 – 80,000 AUD $3,572 plus 32.5c for each $1 over $37,000
80,001 – 180,000 AUD $17,547 plus 37c for each $1 over $80,000
180,001 AUD and over $54,547 plus 45c for each $1 over $180,000
Tax Returns Supplied

Yes

Corporate Tax Requirements

Most companies pay instalments of tax on their income on a quarterly basis, although some large companies are required to pay on a monthly basis. Corporations lodge an annual tax return under a self-assessment system, generally due by the 15th of July.

Employers Social Security and statutory contributions

Employers are required to contribute 9.5% of an employee’s earnings base to a registered superannuation fund or retirement savings account on an employee’s behalf.

Employees Social Security and statutory contributions

Medicare levy of 2%

Insurance requirements
Yes. Statutory Medicare contributions are deducted at source through PAYG (Pay as You Go) Withholding. Almost all foreign nationals on a working visa, such as the 457 work visa, are additionally required to be covered by private medical insurance that meets Department of Immigration and Border Protection (DIBP) requirements. Nationals of some countries will be covered by Reciprocal Health Care Agreements (RHCA) which allow individuals limited access to Medicare services. Private medical insurance is still recommended.
 
Shield GEO does not arrange private medical insurance directly but it is very easy to obtain.
 
No other forms of insurance are required.
Corporate Income Tax Rate

Companies in Australia are generally taxed at a rate of 30% of their net income. This includes corporate limited partnerships, strata title bodies corporate, trustees of corporate unit trusts and public trading trusts.

Payroll Tax

Payroll tax rates and thresholds in Australia differ between states and territories. If a company meets the minimum threshold it is held to the following rate:

ACT – 6.85%

New South Wales – 5.45%

Northern Territory – 5.50%

Queensland – 4.75%

South Australia – 4.95%

Tasmania – 6.1%

Victoria – 4.85%

Western Australia – 5.5%

Sales Tax

The sales tax rate (Goods and Services Tax, or GST) is 10% on most goods and services sales.

Withholding Tax

10% for interest

30% for dividends

20% for royalties

Work Permits
Can Sponsor Work

Yes

Work Permit cost

 AUD 7500 plus government fees payable once per visa duration (up to 4 years). Government fees vary depending on the number of applicants.

Work Permit processing time

 Approximately 4 weeks

Work Permit process

The main work visa for Australia is called the 457 visa. To obtain a 457 the employer must show their job title and duties are eligible under Schedule 1 or Schedule 2 of the 457 visa program. A job description, job title and CV is necessary to make this assessment.

After eligibility is confirmed, the employees personal documents which generally include professional and educational qualifications, passport copy, identity documents are collected. Depending on the employee’s nationality and circumstances, they may need to show they meet the minimum English language requirements. An application is lodged with the 1066 application form. The employee needs to obtain private medical insurance in Australia (available online).

After approval the employee can enter Australia. The actual visa is issued and recorded electronically (it can be checked using the Visa Entitlement Verification Online or VEVO service) which means that on arrival in Australia the migration officials already have a record that the employee has an approved 457 work permit.

Total processing time is around 4 weeks.

Can Work Permit be processed in country

 Yes but the applicant must leave the country and re-enter on the work permit once it has been approved

Switch Business Visa to Work Permit?

 Yes but the applicant must leave the country and re-enter on the work permit once it has been approved

Business Visas
Can do Business Visa

Yes

Others
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