G-P’s employer of record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.
Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.
As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.
Hiring in Australia
When hiring in Australia, employers must follow the minimum statutory standards and conditions derived from the Fair Work Act 2009. The National Employment Standards include a list of 11 entitlements that must be in all employee contracts. Australia also has a pay-as-you-go tax system, whereby employers withhold employee taxes and pay them to the government. Employees in Australia are also typically entitled to receive a pay slip within 1 working day of being paid.
Employment contracts in Australia
In addition to an employment contract, workers in Australia can be covered by an Enterprise Agreement or a Modern Award. These draw from the National Employment Standards and state and federal laws.
Modern Awards generally include the minimum employment standards and set conditions for all employees in the same occupation in addition to the National Employment Standards. The award standards may vary depending on the state, employer, and industry, but generally include:
- The basic pay rate
- The type of employment (full-time, part-time, or casual)
- Overtime rates
- Work arrangements such as varying hours or shifts
- Annual salary
- Leave entitlements
- Allowances
- Information on settling disputes
- Redundancy
- A flexibility term to allow negotiation
Enterprise Agreements are a common way of defining wages and workplace conditions across a single organization or workforce in Australia, as they are often more detailed and specific than Modern Awards.
Written employment contracts, which include wages and conditions, are an agreement directly between the employer and employee. They may be used for employees who are not covered by an award or an Enterprise Agreement. Employment contracts in Australia generally include:
- Name and details of the employer and employee
- Employee’s date of birth
- Job title
- Place of work
- Employment status (full-time, part-time, or casual)
- Start and end dates of the contract
- Pay rate
- Hours of work
- Leave entitlements
- Termination of employment terms
Where applicable, other conditions such as job duties, allowances, bonuses, and performance standards may also be listed.
Working hours in Australia
The National Employment Standards stipulate a maximum 38-hour workweek but allows extra hours, if reasonable and necessary.
Holidays in Australia
There are 7 national public holidays:
- New Year’s Day
- Australia Day
- Good Friday
- Easter Monday
- Anzac Day
- Christmas Day
- Boxing Day
There are also additional public holidays declared by each state and territory such as King’s Birthday and Labour Day. Holidays that fall on weekends are generally observed on the preceding or following weekday.
Vacation days in Australia
- Full-time employees are entitled to a minimum of 4 weeks of vacation time per year; however, you may consider providing 25 to 30 days of vacation per year as an additional benefit.
- Unused annual leave accumulates year to year and is paid out on termination of employment.
- Vacation time is not reduced by time taken for sick leave or public holidays.
Australia sick leave
- Under national law, full-time employees in Australia are entitled to 10 days of paid personal, sick, or caregivers’ leave per year.
- Unused sick leave accumulates year to year but is not paid out on termination of employment.
- Sick leave in Australia (called personal leave) can be taken when the employee is unwell or to allow the employee to care for a family member who is unwell or affected by an unexpected emergency.
- Sick leave is funded by the employer rather than the state.
Parental leave in Australia
Parents may be eligible for up to 18 weeks of paid parental leave for a child born or adopted before Jul. 1, 2023, and 20 weeks paid parental leave for a child born or adopted after Jul. 1, 2023. This is provided by the federal government and is paid in addition to any leave provided by the employer. The federal government has foreshadowed changes to curtail this benefit so that any leave provided by the employer reduces the leave payment provided by the government. To date, the government has not been able to obtain sufficient cross-party support in the Senate to pass this legislation, and the existing law remains in place.
Eligibility requirements include:
- The employee must be the primary carer of a newborn or recently adopted child.
- The employee must have worked at least:
- 10 out of the 13 months before the birth or adoption of the child
- 330 hours in that 10-month period, which is just over 1 day a week
- Meet residence requirements from the date the child enters the primary parent’s care until the end of the paid parental leave period
- Meet the relevant individual income test depending on when the child was born or adopted in the financial year.
- Be on leave or not working from when the caregiver becomes the child’s primary carer until the end of the paid parental leave period.
- Register or apply to register the child’s birth with the state or territory birth registry, if they’re a newborn.
The employee cannot receive Parental Leave Pay plus Newborn Upfront Payment and Newborn Supplement for the same child.
Non-birthing parents are eligible for up to 2 weeks of paid governmental leave if they are not receiving paid leave from their employer and meet work and income level tests.
The law in Australia also provides for unpaid parental or adoption leave.
Health insurance in Australia
Australia has a public and private healthcare system. Citizens of Australia with taxable incomes over a particular indexed level pay 2% of their taxable income into the national healthcare scheme, Medicare.
Individuals can also obtain private healthcare insurance for items not covered by the compulsory Medicare scheme such as ancillary health services (e.g., dental, optical etc.) and private hospital accommodation.
Individuals who choose not to buy private insurance and have an annual taxable income over a specified threshold are charged an additional Medicare surcharge of 1%.
Many employers in Australia provide an allowance to employees rather than purchasing health insurance plans on the employees’ behalf, due to the relatively high fringe benefits tax.
Australia supplementary benefits
In general, it is recommended that employers budget 18% on top of the total cost of employment for the minimum cost of statutory benefits in Australia.
Bonuses
Annual bonuses are not required, but nearly 1/3 of workers in Australia receive them. The average bonus is between 6% and 10% of annual pay. High-level executives may receive up to 1/2 of their salary as an incentive bonus.
Termination/severance in Australia
The National Employment Standards requires employers to provide employees with the minimum statutory notice, which is based on the employee’s time of service:
- Less than 1 year of service: 1 weeks’ notice
- Between 1 year and 3 years of service: 2 weeks’ notice
- Between 3 years and 5 years of service: 3 weeks’ notice
- More than 5 years of service: 4 weeks’ notice
The notice period is increased by 1 week if the employee is over 45 years of age and has completed at least 2 years of service with the employer. The law allows the statutory notice to be paid in lieu of notice. Keep in mind that if a Modern Award or Enterprise Agreement applies, the termination notice period may differ.
Unfair dismissal in Australia
An employee is eligible to lodge an unfair dismissal application if they are covered by the National Workplace Relations systems and have completed the minimum employment period of:
- 1 year: If the employer is a small business employer (less than 15 employees).
- 6 months: If the employer is not a small business employer.
Additionally, one of the following must also apply:
- The person’s annual rate of earnings must be less than the relevant income threshold (AUD 162,000 base salary as of Jul. 1, 2022). This threshold will be indexed each financial year starting on July 1.
- Where the person’s annual rate of earnings is more than the relevant income threshold, one of the following should apply: (i) An award covers the person or (ii) An Enterprise Agreement applies to the person.
Employees have 21 days from the day they were dismissed to file a claim with the Fair Work Commission. The primary unfair dismissal remedy is reinstatement. If that is not appropriate, compensation of up to 6 months’ pay can be awarded.
Redundancy occurs when an employer determines that a particular job is no longer required and terminates the employee’s employment. The job itself, not the employee, becomes redundant. Redundancy can occur due to the following:
- The job someone has been doing is replaced due to the introduction of new technology.
- Staff reduction for a particular task occurs due to a downturn in business.
- A merger or takeover takes place and the position is no longer required.
- The business restructures or reorganizes and the position is no longer required.
- Insolvency or bankruptcy of the employer.
The amount of redundancy pay owed to the employee is determined by the base rate of pay that applies to the severance pay periods outlined in the table below:
| EMPLOYEE’S PERIOD OF CONTINUOUS SERVICE WITH THE EMPLOYER | SEVERANCE PAY PERIOD |
|---|---|
| At least 1 year but less than 2 years | 4 weeks |
| At least 2 years but less than 3 years | 6 weeks |
| At least 3 years but less than 4 years | 7 weeks |
| At least 4 years but less than 5 years | 8 weeks |
| At least 5 years but less than 6 years | 10 weeks |
| At least 6 years but less than 7 years | 11 weeks |
| At least 7 years but less than 8 years | 13 weeks |
| At least 8 years but less than 9 years | 14 weeks |
| At least 9 years but less than 10 years | 16 weeks |
| At least 10 years* | 12 weeks* |
* There is a reduction in severance pay from 16 weeks to 12 weeks for employees with at least 10 years of continuous service.
Redundancy pay is not payable if any of the following apply:
- The employer is a small business employer (less than 15 employees).
- The employee’s period of continuous service is less than 12 months.
- Employment is terminated as a result of serious misconduct.
- The employee is employed for a specified period of time.
- An employee to whom an industry-specific redundancy scheme in a Modern Award applies.
- An employee to whom a redundancy scheme in an Enterprise Agreement applies.
- A casual employee.
- An apprentice.
Paying taxes in Australia
Employers in Australia pay payroll tax on wages, benefits, and superannuation paid to, or on behalf of, their employees.
Payroll tax is a tax levied by individual states in Australia. It is not a federal tax, and, as such, the rates at which the tax is applied and the gross annual payroll threshold at which the tax commences to apply vary from state to state. The following chart sets out the current thresholds and rates of payroll tax for each state and territory in Australia:
| STATE/TERRITORY | THRESHOLD | RATE |
|---|---|---|
| New South Wales | AUD 1,200,000 | 4.85% |
| Victoria | AUD 650,000 | 4.85% |
| Queensland | AUD 1,300,000 | 4.75% to 4.95% |
| South Australia | AUD 1,500,000 | 0% to 4.95% |
| Western Australia | AUD 1,000,000 | 5.5% |
| Tasmania | AUD 1,250,000 | 4% to 6.1% |
| Australian Capital Territory | AUD 2,000,000 | 6.85% |
| Northern Territory | AUD 1,500,000 | 5.5% |
Employers in Australia are also required to contribute to a Superannuation or retirement fund for all employees. The contribution rate is 11% of an employee’s ordinary time earnings (OTE) and will increase by 0.5% each Jul. 1 until 2025. OTE generally includes the employee’s regular wage plus any shift loadings, commissions, bonuses, paid leave, and allowances.
Employers in Australia are also required to pay a tax on the value of the fringe benefits they provide to their employees. Reporting requirements vary depending on the amount of fringe benefits and the type of benefits. Examples of fringe benefits include:
- A company car
- Parking
- Gym membership
- A cheap loan
- Private health insurance
Laptops and mobile phones for business use are exempt from the fringe benefits tax.
Why G-P?
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