Australia

Australia| photo 1

Australia PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Australia to companies willing to enter the Australian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Australia.  However our solution allows you to start the operations in Australia within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Australia fast facts

Population, million: 25,499,884
Land area: 7,692,024 km²
Capital: Canberra
Local currency: Australian dollars (AUD)

GDP per capita:$ 54200.00
GDP in currency:$ 307.6 billion

Officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania and numerous smaller islands. It is the largest country in Oceania and the world’s sixth-largest country by total area. Australia’s capital is Canberra, and its largest city is Sydney.

Laws applicable to foreign nationals

Legislation, industrial instruments, and the common law are the main sources of employment law. The Fair Work Act 2009 (Cth) (the “FW Act”) governs the employment of the majority of Australian employees, supplemented by other federal, state and territory legislative schemes pertaining to areas such as work, health and safety and non-discrimination. Relevant industrial instruments include modern awards, which are determined by the Fair Work Commission (the “FWC”), and enterprise agreements. Awards provide a safety net of minimum pay rates and employment conditions, and are used as the benchmark for assessing whether employees are ‘better off overall’ under a proposed enterprise agreement. Each year the FWC conducts an annual wage review and decides on a national minimum wage. The contract of employment and common law principles are important sources of the terms and conditions of employees, particularly for those who are not covered by an award or enterprise agreement.

Hiring, Negotiating and Doing Business in Australia

Necessity of written employment contract

While the primary means of regulating the employment relationship is the law of contract under Australian law, there is no statutory requirement to enter into a written employment contract. However, it is common practice to record the key terms of engagement in either a letter of appointment or a formal written contract and this is a prudent risk mitigation measure for employers.

Written employment contracts, which include wages and conditions, are used for employees who are not covered by an award or an enterprise agreement and include:

  • Names and details of employer and employee
  • Date of birth of employees
  • 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
  • Where applicable, other conditions such as job duties, allowances, bonuses, performance standards and so on should also be listed.

Different forms of engagement: employment, contracting, work with private entrepreneur

Collective agreements (referred to as enterprise agreements in Australia) can be made under the Fair Work Act. Trade unions have rights to act as bargaining representatives for their members or employees who are eligible to be members.

Australia Employment Contract

Types of employment agreements

  • Open-ended contracts are the most common and involve an employee being hired for an unspecified amount of time. They usually include information about contract termination, including how much notice needs to be given and what, if any financial payouts a dismissed employee is entitled to.
  • Fixed-term contracts are rare but certainly worth being aware of. They generally specify a hard end-date when employment will terminate. A good example of a fixed-term contract would be when you commit to working with a company for a year on a project, but don’t want to continue after this.

Australian employment law recognises the concepts of both fixed-term and ongoing employment. There are no laws of general application limiting the duration of a particular type of engagement. However, certain modern awards contain requirements for casual employees to convert to permanent employment after a period of time. Similar entitlements may also be found in an enterprise agreement.

Australia working hours

The National Employment Standards (NES) provides for a maximum working week of 38 hours unless the additional hours are reasonable. It is common for employers and employees to reach agreement about the reasonableness of additional hours, including, for example, that reasonable overtime is required from a role.

Overtime

All time worked beyond 38 hours per week is overtime. In most cases it attracts a premium of 1.5 times the ordinary rate of pay for the first three hours (2 hours in some industries) and double time thereafter. Most awards require that employees be available to work “reasonable overtime” if the employer wishes.

In many industries work on Saturday or Sunday will attract a premium on the ordinary hourly rate. Sunday work is usually paid at double the ordinary rate. However, some workplace agreements have averaged out the weekday/weekend difference in rates.

Vacation leave in Australia

Under the National Employment Standards (NES), full-time employees are entitled to four weeks of paid annual leave per year. This is pro-rated for part-time employees and increased to five weeks for shift workers (as defined in modern awards). Casual employees are not entitled to annual leave. Annual leave that is not taken each year accrues from year to year and is paid out on termination.
Employers can require employees to take paid annual leave in certain circumstances. Cashing out annual leave is also permitted in particular circumstances.
Under the National Employment Standards (NES), full-time employees receive ten days of paid personal or carer’s leave per year (pro-rated for part-time employees). Casual employees are not entitled to paid time off.
This entitlement accrues from year to year but is not required to be paid out on termination.

Australia Maternity Leave

A mother with at least 12 months of continuous service on the date of birth or placement of the child is entitled to up to 12 months of unpaid parental leave provided they are the primary carer of the child. Parental leave can be extended up to a further 12 months, which can only be refused by employers on reasonable business grounds.

Casual employees employed on a regular and systemic basis for at least 12 months are also entitled to unpaid parental leave.

Pregnant employees can also have rights to be provided with a safe job or unpaid special maternity leave in certain circumstances.

Australian Severance Laws

Employees must be provided with minimum statutory notice period between one and four weeks.

Employees over 45 years of age that have completed at least two years of service are entitled to an additional week’s notice. If permitted by the employment contract, employers can elect to pay out the notice in lieu.

Minimum notice periods do not apply to:

  • Casual employees.
  • Employees employed for a specified period of time.
  • Employees employed for a particular task or seasonal employees.
  • Employees whose employment is terminated because of serious misconduct.

Employment contracts often provide for longer notice periods, particularly for executives or senior management.
If there are no express arrangements in relation to notice of termination of employment, a term of reasonable notice may be implied. This involves a court or tribunal considering the facts and circumstances at the time the relevant employment commenced, to determine the period of reasonable notice, having regard to factors such as the:

  • Seniority of the position.
  • Length of service.
  • Age of the employee.
  • Likelihood of finding other employment.
  • Reasonable notice typically ranges from three to 12 months, but can be longer.

Severance payments
If employees are not given actual notice of termination, they must be paid in lieu of notice.

Procedural requirements for dismissal
All terminations of employment must be in accordance with the terms of the contract. It is also prudent for employers to comply with any internal policy requirements.

Australia Tax

Employers in Australia potentially 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.

Health Insurance Benefits in Australia

Individuals can obtain private health care 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 in Australia rather than purchasing health insurance plans on the employees’ behalf, due to the relatively high fringe benefits tax.

Additional Benefits in Australia

Annual bonuses are not required, but nearly one-third of Australian workers receive them. The average bonus is between 6% and 10% of annual pay. High level executives may receive up to one-half of their salary as an incentive bonus.

Australia Holidays

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 Queen’s Birthday and Labour Day. Holidays that fall on weekends are observed on the Monday after.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

FAQ Australia

  • Working hours in Australia

    The National Employment Standards (NES) provides for a maximum working week of 38 hours unless the additional hours are reasonable. It is common for employers and employees to reach agreement about the reasonableness of additional hours, including, for example, that reasonable overtime is required from a role.

  • What are the main 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 
  • What are payroll taxes in Australia?

    Employers in Australia potentially 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.

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