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Looking to Hire an Employee in Australia?

There are many things you will need to know before you hire in Australia but here are our top 3:

Employment in Australia

Employer and Employee Social Security in Australia

The name for social security in Australia is superannuation (or ‘super’), and is simply money paid to workers for retirement in a super fund. In Australia, if you pay an employee more than AU$450 per month pre-tax, then you must also pay super on top of their wages. This is true for both Australian residents and expats on work assignment, and the rate is 9.5% of salary.

Employees are not required, but can elect, to contribute to super as well, and those amounts are taxed at a flat 15%, with an annual contribution cap of $30-35,000 AUD depending on age. Employees do make a 2% Medicare contribution as well which is withheld from monthly pay.

Tax in Australia

Tax Rates in Australia

Taxes must be withheld from the pay check of your employees under the Australian Pay As You Go (PAYG) system. Tax rates range from 19% (over 18,201 AUD) up to 45% for annual earnings over 180,000 AUD.

Corporate Tax in Australia

The corporate tax rate in Australia is 30% of net income.

Payroll in Australia

Social Security Registration

Employers and employees register to set up the super fund and Medicare.

13th/14th month bonus

There is no 13th or 14th month bonus in Australia.

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It’s going to be hard to employ someone remotely. Here’s what else you should be worried about:

The risk of non-compliance is very high, especially when employing in a new country like Australia

Employing in an unfamiliar country like Australia can be overwhelming. The burden and risk of non-compliance is all on you and your company and you need to be careful when navigating the employment and tax laws of Australia. The information you’re looking at may be inaccurate or outdated.

The consequences of non-compliance in Australia are far too high to not invest time and money in thoroughly understanding the Australian jurisdiction.

Involving tax and immigration providers early is the number 1 most preferred method to manage compliance risks for companies, with 72% stating that they are focusing on outsourcing these services early on in the assignment.

There are many hidden costs that you may have overlooked

When employing in Australia, it is highly like that you may fail to factor in some costs involved while estimating a budget for the assignment. Usually, these costs occur during the course of employment and tend to be country-specific. They are often unpredictable and unavoidable resulting in the assignment being far more expensive than the business intended it to be. Hiring just one employee in Australia doesn’t justify the effort and cost it takes for a company to learn everything from scratch about employing in Australia.

Outsourcing services is the most preferred way for global mobility professionals to contain costs with 71% stating that they have already made outsourcing changes in an effort to maximise cost savings. Unsurprisingly, outsourcing is preferred over reducing the number of assignments/transfers or improving in-house administrative processes as a method to save costs.

These considerations are common when hiring an employee in any new country. In our years of experience employing in Australia we have helped our clients with several other problems specific to Australia. Here’re a few examples:

Other Issues Our Clients Have Encountered When Employing in Australia

Payroll Tax Rates in Australia

Payroll tax rates in Australia depend on the state or territory where your company is located, and the range is from 4.75% to 6.85%. This may be a different system than many foreign companies are used to, and it is necessary to confirm the rate prior to setting up Australian payroll for your employees.

Work Permits: The Temporary Skills Shortage (TSS) Visa

There are two types of TSS visas:

Short Term: The short term TSS visa is valid for two years, and can be renewed for two years. It requires two years of relevant work experience, but there is no pathway to permanent residency.
Long Term: The long term TSS is valid for four years, and is designed for high skilled workers. It also carries a two-year work experience requirement, as well as a high standard of English ability. It is possible to seek permanent residency after three years.

The Employer of Record Solution

As you can see from this overview, the process of hiring even one employee in Australia can be a real challenge for any HR department. This is why the Shield GEO Employer of Record (EOR) solution is a cost-effective and simple way to address your payroll, tax and immigration requirements. The EOR becomes the legal employer of your worker in Australia, with a registered entity that is already in place and prepared to take care of your employment needs.

Our team members can offer personal service, quick communication and the expertise of our regional partners to ensure that our EOR service is delivered seamlessly to support your staff assignments. We do have account managers and a principal office in Australia, giving your HR department local support for Australian employment.

Here is a quick summary of what you can expect from your Shield GEO regional account manager:

  • A single point of contact for all employee or HR issues and questions
  • Assistance with meeting Australian requirements for the employment contract
  • Advice on changes in legislation
  • Obtaining visas and work permits sponsored by our Australian EOR
  • Full compliance with Australian payroll, immigration and employment laws
  • Monthly payroll and employment administration

For a HR department located in the home country, the Shield GEO team becomes a local, dedicated resource to handle every aspect of your employee assignments. This allows you to focus on supporting your staff’s project and performance needs, while we take care of the multiple employment administration tasks for you.

 Need more information about employing in a new country? Learn more about:



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