Australia

Currency CurrencyAustralian Dollar (AUD) Working Time Work Week38 hours Employer Taxes Employer Taxes 14.35% - 16.35%

Hire in Australia

Get the best talent in Australia. Let Lano do the heavy lifting. We’ll help you hire the best full-time employees or contractors, saving you from the pain of establishing a legal entity. No need to worry about complex local laws or tax requirements. From compliant contracts to global payroll, we’ve got you covered.

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The biggest advantage when hiring employees or contractors in Australia is, of course, the non-existing language barrier. As the country’s official language is English, communication among remote team members will definitely not be a problem. 

Another reason why Australia has become increasingly popular with international recruiters is its geographic location. Down Under is considered the perfect gateway for international companies who are looking to expand their business into the Asia Pacific region. With one of the best education systems in the world, Australia offers international companies a large pool of highly skilled, well educated workers who are constantly looking for new challenging job opportunities, including those from overseas. 

Basic Facts about Australia

  1. official state name Commonwealth of Australia
  2. population 25.7 million
  3. capital Canberra
  4. major languages English
  5. currency Australian Dollar (AUD)
  6. time zones UTC +8 / UTC +9.5 / UTC +10
  1. Show public holidays
    01 Jan New Year
    26 Jan Australia Day **
    08 Mar Canberra Day/Adelaide Cup Day/Eight Hours Day/Labour Day *
    02 Apr Good Friday
    03 Apr Easter Saturday *
    04 Apr Easter Sunday *
    05 Apr Easter Monday
    06 Apr Easter Tuesday *
    15 Apr Anzac Day **
    03 May May Day *
    31 May Reconciliation Day *
    14 Jun Queen’s Birthday *
    02 Aug Bank holiday/Picnic Day *
    11 Aug Royal Queensland Show *
    24 Sep Friday before AFL Grand Final *
    04 Oct Labour Day *
    02 Nov Melbourne Cup *
    25 Dec Christmas Day **
    26 Dec Boxing Day **

    * Only in certain territories and states. ** These public holidays are substituted by an additional day off during the following week in years where they fall on a weekend.

Employment Contract

Australian legislation generally distinguishes between fixed-term employment contracts and permanent employment contracts. Although not legally required, it is best practice in Australia to put a written employment contract in place which outlines the basic terms of employment such as:

  • Identification of both parties 
  • Date of commencement (and employment duration for temporary contracts) 
  • Workplace
  • Position, duties and responsibilities
  • Base salary as well as other compensation and benefits
  • Working hours 
  • Total number of holidays and leave entitlement
  • Notice periods for employment termination
  • Probation period (if applicable)
  • Reference to existing awards

Probation Period

In general, probation periods in Australia must not exceed six months – twelve months for businesses with less than 15 employees.

Working time

Working Hours and Breaks

A standard working week in Australia comprises 38 hours with a daily working time of around 7.6 hours. Breaks and rest periods are subject to awards and differ from industry to industry. 

Overtime

Under federal legislation, i.e. the 2009 Fair Work Act, employers can request their employees to work a “reasonable” amount of overtime without having to compensate them. However, overtime payment may be required under applying industrial awards which usually mandate overtime pay for any work exceeding 38 hours within one week.

Payroll

Minimum Wage

As of February 2021, the national minimum wage is AUD 19.84 per hour and AUD 753.80 per week

Sick Pay

Every employee in Australia is entitled to ten days of combined sick and carer’s leave per year which can be used either in case of personal illness or for childcare and family emergencies. During this time, employees receive their normal wages. 

Bonuses

There is no legislation in Australia which mandates the payment of annual bonuses. 

Taxes and Social Security Contribution

Employers and employees in Australia are subject to the following tax and social security contribution rates (rates apply to the 2020/2021 tax year beginning on 1 July 2020 and ending on 30 June 2021):

taxes
employers

30% corporate tax rate (standard rate)

10% VAT (standard rate)

payroll tax rates and thresholds vary between states and territories: 4.85% – 6.85%

employees

Individual income tax rates range from

0% (up to AUD 18,200) to 45% (over AUD 180,000)*

Social Security
Employers

9.5% of employee’s salary to superannuation fund – 10% starting from 1 July 2021

Employees

2% Medicare and Disability Care

additional 1.5% surcharge on income exceeding certain limits

*Read more

Individual income tax rates:

– up to AUD 18,200: 0%

– AUD 18,200 – AUD 45,000: 19% on any dollar exceeding AUD 18,200 threshold

– AUD 45,001 – AUD 120,000: AUD 5,092 + 32.5% on any dollar exceeding AUD 45,000 threshold

– AUD 120,001 – AUD 180,000: AUD 29,467 + 37% on any dollar exceeding AUD 120,000 threshold

– over AUD 180,000: AUD 51,667 + 45% on any dollar exceeding AUD 180,000 threshold

Employee Benefits

Annual Leave

Employees in Australia are entitled to four weeks of paid annual leave – five weeks for shift workers. Annual leave does not expire but can be accumulated by an employee over the course of various years. It is also possible to cash out any remaining annual leave

Public holidays are not included in an employee’s annual leave entitlements. There are seven public holidays which are observed all over Australia. In addition, each state / territory has several specific holidays on which businesses are usually closed. 

Maternity Leave and Paternity Leave

Maternity leave in Australia is usually considered as part of the statutory parental leave entitlements. However, female employees can take special unpaid maternity leave in case of pregnancy-related illness, miscarriage or stillbirth. Employees also have the right to shift to a so-called “safe-job” during their pregnancy.

On birth, the employee’s partner can claim up to two weeks of paternity leave during which they receive the equivalent of the national minimum wage directly from the Australian Government. 

Parental Leave

Pregnant employees and their partners as well as those planning to adopt a child under 16 years of age are entitled to up to 18 weeks of paid parental leave per family. Parental Leave Pay (PLP) equal to the national minimum wage is issued by the employer but refunded by the Australian Government.

In addition, twelve months of unpaid parental leave can be taken by each partner if they have been working for the same employer for more than one year. 

For female employees, parental leave can start six weeks before the expected due date while the partner’s parental leave can start no earlier than on the actual day of birth.

Additional Leave and Benefits

  • two days of compassionate leave in case of death or serious injury of a close family member 
  • five days of unpaid family and domestic violence leave each year
  • long service leave (duration and required length of service vary between states and territories)

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Employment termination

In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employment in Australia may be terminated by one of the following reasons (non-exhaustive list):

  • redundancy and business-related dismissal
  • underperformance 
  • incapability to fulfill the role
  • misconduct

Except for dismissal due to the employee’s own fault, employers have to respect the following statutory notice periods when terminating an employee:

Length of Service Minimum Notice Period
up to 1 year 1 week
up to 3 years 2 weeks
up to 5 years 3 weeks
> 5 years 4 weeks

 

For employees over 45 with at least two years of service, notice periods are one week longer.

Final pay in Australia includes any outstanding wages, payments for untaken annual leave or long service leave, pay in lieu of notice (if applicable) and – in case of redundancy – a severance pay which is calculated as follows: 

Length of service Severance pay
> 1 year 4 weeks’ normal pay
> 2 years 6 weeks’ normal pay
> 3 years 7 weeks’ normal pay 
> 4 years 8 weeks’ normal pay
> 5 years 10 weeks’ normal pay
> 6 years 11 weeks’ normal pay
> 7 years 13 weeks’ normal pay
> 8 years 14 weeks’ normal pay
> 9 years 16 weeks’ normal pay
> 10 years 12 weeks’ normal pay (as long service leave is cashed out)

 

It is worth noting that companies with less than 15 employees do not have to provide any severance pay to their employees. 

Hiring in Australia?

Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Australia? The Lano platform makes it easy to go from freelance to full-time employee. Get expert guidance from the Lano team to compare your options and keep growing.