UTC +8 / UTC +9.5 / UTC +10
15.35% - 17.35%
Australian Dollar (AUD)
monthly / bi-monthly
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This country guide is for general informational purposes only and should not be construed as legal advice, nor as binding based on your relationship with Lano. When using Lano's solutions, the specifics may depend on your EOR and Payroll setup with our partners. Although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
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.
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)
Position , duties and responsibilities
Base salary as well as other compensation and benefits
Total number of holidays and leave entitlement
Notice periods for employment termination
Probation period (if applicable)
Reference to existing awards
In general, probation periods in Australia must not exceed six months – twelve months for businesses with less than 15 employees.
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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.
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.
Australia's current minimum wage stands at AUD 21.38 per hour, which equals AUD 812.60 per week (based on a 38-hour week). It became valid on July 1, 2022.
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.
There is no legislation in Australia which mandates the payment of annual bonuses.
Employers and employees in Australia are subject to the following tax and social security contribution rates (rates are valid for the tax assessment years 2022/2023 and 2023/2024):
15.35% - 17.35%
30% corporate tax rate (standard rate)
10% VAT (standard rate)
payroll tax rates and thresholds vary between states and territories: 4.85% – 6.85%
up to 45%
Individual income tax rates range from
0% (up to AUD 18,200) to 45% (over AUD 180,000) *
10.5% of employee’s salary to superannuation *
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
Different tax rates apply to foreign residents:
Up to AUD 120,000: 32.5%
AUD 120,000 - AUD 180,000: 37%
Over AUD 180,000: 45%
The employer supaerannuation contribution rate is set to increase progressively until it will reach 12% in July 2025:
Starting July 2023: 11%
Starting July 2024: 11.5%
Starting July 2025: 12%
Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).
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 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.
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.
Starting July 2023, the parental leave entitlement will increase from 18 weeks to 20 weeks, with 2 weeks being exclusively reserved for each parent. During this time, parents will receive a statutory allowance equal to the national minimum wage. At the same time, the 2 weeks of paid partner leave will be abolished. The parental leave period is set to increase to a total of 26 weeks by 2026.
2 days of compassionate leave in case of death or serious injury of a close family member
10 days of paid family and domestic violence leave each year
Long-service leave (duration and required length of service vary between states and territories)
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
incapability to fulfill the role
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
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
It is worth noting that companies with less than 15 employees do not have to provide any severance pay to their employees.
This country guide is for informational purposes only and should not be construed as legal advice. The content of this guide contains general information, and although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
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