Hiring in Australia

A foreign company can hire in Australia through direct employment after Australian employer setup, an employer of record arrangement where the local arrangement qualifies, or a genuinely independent contractor. Employment brings Australian employer obligations; contracting requires genuinely independent services. 4dev.com’s Contractor Platform works with independent contractors in Australia.

Three ways to hire in Australia

Choose direct employment when your business will be the Australian employer, an employer of record arrangement when a separate legal employer fits the engagement, and contracting only for genuinely independent services.

Route	Legal employer	What you pay on top of salary	How you end it
Your own entity	Your Australian employing entity	12% super guarantee on qualifying earnings; state payroll tax, workers compensation and other costs can be separate	Statutory notice: 1–5 weeks, subject to the statutory conditions and any applicable award or contract
Employer of record	The employer of record for the employment arrangement	12% super guarantee on qualifying earnings; state costs and the provider’s own charge are separate	Statutory notice: 1–5 weeks, subject to the statutory conditions and the arrangement’s terms
Contractor	No employment relationship with the client for genuinely independent services	No employee salary; agree a service price. Super guarantee can still apply where an individual contract is wholly or principally for that person’s labour	The services contract sets the ending process; employee notice does not automatically apply

The 12% super guarantee applies to qualifying earnings. State payroll tax, workers compensation and any provider charge require separate checks. For labour supply, check whether a state licence is needed, particularly for work in Victoria or an indirect supply chain; an employer of record arrangement does not settle licensing or contractual allocation on its own. A contractor’s services must remain genuinely independent, and an individual labour contract can still meet the separate super guarantee test.

The labour market in Australia

The ABS weekly earnings series gives a national budget anchor. Set the offer for the actual role, location and employment instrument; an industry mean is not a role salary.

Salary reference points

Full-time adult average, ordinary-time weekly earnings, seasonally adjusted, May 2026	AUD 2,083.70 / week	ABS AWE, May 2026
Information media and telecommunications industry, full-time adult ordinary weekly earnings, original estimate, May 2026	AUD 2,714.10 / week	ABS AWE, May 2026
Professional, scientific and technical services industry, full-time adult ordinary weekly earnings, original estimate, May 2026	AUD 2,389.60 / week	ABS AWE, May 2026

The first row is a seasonally adjusted national full-time-adult series. The industry rows are original observations of different populations, not city benchmarks or software-engineer, developer or other job-title salaries. Use them to frame a budget, then check the applicable award or agreement and the actual role before setting pay. The cost examples below use those same three ABS populations.

Registering as an employer, step by step

Before the first Australian payroll, set up the employer-side tax, pay-classification and super processes that apply to the engagement; the path depends on the employing route and relevant registrations.

Step	What happens	Takes
Confirm the employing route and pay classification	Identify the applicable award or other employment instrument and the employee’s classification before setting pay.	Depends on the employment instrument and classification
Register for PAYG withholding	Register before the first payment to an employee.	Before first pay
Obtain the TFN declaration	Use the employee’s TFN declaration to set withholding.	Before withholding is set
Configure payroll and super	Report through Single Touch Payroll each payday and prepare the 12% super guarantee for qualifying earnings.	Each payday
Check state obligations	Check payroll-tax and workers-compensation requirements for the relevant state or territory.	Depends on the work location and state requirements
Total	The checks can run in parallel, but each must be ready for its trigger.	Depends on the registrations and employment setup

Award, payroll and state checks can run in parallel, but PAYG withholding must be registered before the first employee payment. The other steps have their own triggers, so there is no single setup duration.

Hiring and onboarding

Set the offer against the National Employment Standards, the applicable award or enterprise agreement, and the role’s classification before the employee starts.

Legal limits on the offer

Probation period: Usually 3–6 months. The employer sets it, but probation is distinct from the statutory minimum employment period for unfair-dismissal eligibility. That period is generally six months with a non-small employer and one year with a small-business employer, subject to the relevant award, agreement or income-threshold coverage. The written terms should identify the employment arrangement, classification and pay conditions that apply to the role.

For a fixed-term role, a contract exceeding two years is prohibited unless an exception applies. Confirm the applicable instrument and any exception before issuing the terms rather than treating a standard form as the answer to classification or term limits.

Onboarding checklist

• Issue the written terms and record the applicable award or enterprise agreement, classification and pay conditions.
• Obtain the TFN declaration and set up PAYG withholding before the first pay.
• Configure Single Touch Payroll and the 12% super guarantee for qualifying earnings.
• Obtain the employee’s fund details and retain the records needed for payroll and super administration.
• Check payroll-tax and workers-compensation requirements for the state or territory where they apply.

businesses must ensure super contributions are available every pay cycle.

— Gavan Ord, Senior Manager of Business and Investment Policy, CPA Australia

Payroll data, fund details and applicable state checks must be ready for their respective triggers. The employment instrument and the employee’s circumstances still need separate review.

Minimum wage and award rates

The national baseline is AUD 26.44 / hour from 1 July 2026 for an adult national-system employee who is award- and agreement-free; it is not automatically the rate for every employee.

National Minimum Wage, adult award- and agreement-free baseline	AUD 26.44 / hour — from 1 July 2026	CommBank FWC AWR 2026
Modern-award minimum rates	4.75% increase — from the first applicable full pay period from 1 July 2026	CommBank FWC AWR 2026

Check the applicable award or enterprise agreement and the employee’s classification before quoting an hourly rate. The 4.75% award increase and the AUD 26.44 / hour national baseline apply to different groups. An hourly baseline alone does not establish an annual salary.

Taxes and contributions

For a resident employee, ordinary-income tax is a marginal 0–45% calculation on taxable income, while the employer adds a 12% super guarantee on qualifying earnings rather than a single all-in percentage.

Resident taxable income to AUD 18,200	0% marginal rate	Income Tax Rates Act 2026
Above AUD 18,200 to AUD 45,000	15% marginal rate	Income Tax Rates Act 2026
Above AUD 45,000 to AUD 135,000	30% marginal rate	Income Tax Rates Act 2026
Above AUD 135,000 to AUD 190,000	37% marginal rate	Income Tax Rates Act 2026
Above AUD 190,000	45% marginal rate	Income Tax Rates Act 2026

The 12% super guarantee applies to qualifying earnings, which include ordinary-time earnings, commissions and certain additional payments. For 2026–27, the maximum contributions base is A$270,830 in cumulative qualifying earnings per employee and employer for the financial year; it is an annual base, not a statutory monthly cap.

What an employee actually costs you

The three ABS weekly-earnings populations are not job-title salaries. Monthly equivalents are weekly earnings × 52 ÷ 12, rounded to cents; annual figures use the weekly amounts over 52 weeks independently, rather than twelve rounded monthly figures. Each illustrated annual salary is below the annual maximum contributions base.

ABS population	Monthly gross equivalent	Monthly selected SG	Monthly selected subtotal	52-week gross illustration	52-week selected SG	52-week selected subtotal	Source
Full-time adult average	A$9,029.37	A$1,083.52	A$10,112.89	A$108,352.40	A$13,002.29	A$121,354.69	ABS AWE, May 2026
Information media and telecommunications industry	A$11,761.10	A$1,411.33	A$13,172.43	A$141,133.20	A$16,935.98	A$158,069.18	ABS AWE, May 2026
Professional, scientific and technical services industry	A$10,354.93	A$1,242.59	A$11,597.52	A$124,259.20	A$14,911.10	A$139,170.30	ABS AWE, May 2026

The selected subtotal covers salary and SG, not net pay or all employment costs. It excludes state payroll tax, workers compensation, leave loading, award-related benefits, other benefits and provider fees, which depend on the state, instrument and arrangement. In New South Wales, employer super contributions enter taxable wages when payroll tax applies. That state-specific treatment also needs to be costed separately from the 12% SG.

Working time and overtime

For a full-time employee, plan around 38 ordinary hours a week plus only reasonable additional hours; an employee may refuse additional hours that are unreasonable. For an employee who is not full-time, the weekly baseline is the lesser of 38 hours and the employee’s ordinary hours of work in a week. Neither rule sets a universal overtime or penalty multiplier. Check the applicable award, enterprise agreement or contract before publishing a roster: it governs the ordinary-hours pattern and the treatment of particular shifts or additional hours.

Leave, sick pay and parental leave

The national floor is 4 weeks of paid annual leave for an employee other than a casual, alongside separate personal/carer’s and parental-leave entitlements with their own eligibility rules.

Annual leave	4 weeks paid for each year of service; eligible shiftworkers receive 5 weeks	Fair Work Act s 87
Personal/carer’s leave	10 days paid for each year of service for non-casual employees; accrues progressively according to ordinary hours	Fair Work Act ss 95–96
Parental leave	12 months unpaid for an eligible employee in connection with birth or adoption care	Fair Work Act ss 67, 70

The annual-leave and paid personal/carer’s rules do not apply to casual employees in the same way: the personal/carer’s entitlement is for non-casual employees, while the annual-leave provision applies to employees other than casuals. For parental leave, a non-casual employee generally needs at least 12 months of continuous service; regular casuals have separate continuity conditions.

Check the applicable award or enterprise agreement for details that affect the role, including any conditions beyond these national floors. The 12-month parental-leave entitlement is unpaid; do not treat it as an employer-paid parental benefit.

Public holidays depend on the state and locality

Public-holiday count: Varies by state. It can also vary by locality, so check each employee’s work location rather than using one national calendar for a multi-state workforce.

The national framework recognises a day or part-day declared for a state, territory or region within it. Check that calendar, including regional declarations, before finalising a roster. Then check the applicable award, enterprise agreement or contract for work and pay treatment; the date alone establishes neither a universal penalty rate nor a national holiday count.

Termination: notice and payments

The statutory employer-notice range is 1–5 weeks, but the fifth week is a separate condition: the employee must be over 45 and have completed at least two years of continuous service when notice is given.

Not more than 1 year of service	1 week	Fair Work Act s 117
More than 1 year but not more than 3 years	2 weeks	Fair Work Act s 117
More than 3 years but not more than 5 years	3 weeks	Fair Work Act s 117
More than 5 years	4 weeks	Fair Work Act s 117
Conditional extra week	Add 1 week only if the employee is over 45 and has at least 2 years of continuous service	Fair Work Act s 117

The notice and redundancy rules have exceptions, including casual employment, specified-term or task employment, and termination for serious misconduct, subject to the Act’s anti-avoidance qualification. Check the applicable award or contract as well; it can affect the exit process and should be read alongside the statutory floor.

Redundancy pay has its own tenure schedule and is not a steadily rising table at every service point. It starts at 4 weeks after one year, reaches 16 weeks at nine to under ten years, then is 12 weeks at ten years or more; most small-business employers and employees with less than 12 months’ continuous service are excluded from the NES redundancy entitlement.

Unfair-dismissal eligibility is a separate question from notice and redundancy: it generally requires six months’ employment with a non-small employer or one year with a small-business employer, plus the relevant award, agreement or income-threshold coverage. These rules do not produce one universal exit-cost figure.

Recent changes

The 2026 changes affect wage setting, super administration and Victorian labour-hire checks. The non-compete measure remains a proposal.

• 1 July 2026 — wages. The National Minimum Wage became AUD 26.44 / hour for the adult award- and agreement-free baseline, while modern-award minimum rates increased 4.75%. These are separate changes: check the employee’s award and classification before setting the rate.
• 1 July 2026 — Payday Super. The amendment commenced, setting the super guarantee at 12% of qualifying earnings and applying the 2026–27 A$270,830 maximum contributions base per employee and employer for the financial year. The base is cumulative for the year, not a monthly cap, so direct employers and employer-of-record arrangements need payroll and super processes that follow the current rules.
• 1 October 2026 — Victorian labour hire. Victoria’s general definition changed to focus on whether an arrangement has the character of labour supply, including some indirect supply chains. This affects the state licence check for an employer-of-record-style or other labour-supply arrangement; it does not create a single national licence rule.
• Proposed, not current law — non-competes. Draft legislation released on 7 September 2026 targets non-competes for workers under A$190,100 a year, but it remains a proposal. Treasury describes a 2027 effect only after consultation and legislation passes Parliament.

What a mistake costs and who pays

The party that employs, engages or supplies the worker can face different obligations, so a classification or payroll error does not produce one automatic liability outcome for every party in the chain.

Party	Risk	Amount
Direct legal employer	Underpayment or super guarantee shortfall	Amount owed to the worker or fund is case-specific; not established as one standard amount
Individual who commits sham contracting	Civil penalty per contravention	Up to AUD 21,840
Company with fewer than 15 employees that commits sham contracting	Civil penalty per contravention	Up to AUD 109,200
Company with 15 or more employees that commits sham contracting	Civil penalty per contravention	Up to AUD 546,000
Contracting party paying an individual under a contract wholly or principally for that person’s labour	The person can be an employee for super guarantee purposes even where other status questions differ	Amount depends on qualifying earnings and the applicable statutory rules; not established here
NSW employer or payer, where the payroll-tax conditions apply	Contractor payments and employer super can enter taxable wages under separate NSW tests	State-, threshold- and arrangement-dependent; amount not established
Employer of record and client	Employment, labour-supply and contractual-allocation questions depend on the structure and the state	Contractual allocation and amount not established; liability does not automatically transfer

For conduct under the penalty-unit rate effective 1 July 2026, the sham-contracting figures are fixed civil-penalty maxima per contravention, not the amounts owed to a worker or fund. A court sets the actual penalty. For the company bands, size is assessed when the penalty application is made: associated entities are counted together, and casual employees count only if employed on a regular and systematic basis. A qualifying underpayment-linked corporate contravention can instead carry the greater of the applicable fixed maximum and three times the underpayment.

Underpayment, super and state payroll tax each require a calculation based on the engagement. For an employer of record or other labour-supply model, identify the legal employer, work location and relevant state definition before assessing responsibility. Contractual allocation between parties does not replace that statutory analysis.

Questions people actually ask

What is the minimum wage in Australia in 2026?

The adult National Minimum Wage is AUD 26.44 / hour from 1 July 2026 for an employee who is award- and agreement-free. Modern-award minimum rates increased by 4.75% from the first applicable full pay period from that date, so check which lever applies before setting pay.

Does the national minimum wage cover every employee?

No. The AUD 26.44 / hour figure is the national baseline for adult national-system employees who are award- and agreement-free. For other roles, identify the applicable modern award or enterprise agreement and the employee’s classification before quoting a minimum rate.

What is the average monthly salary in Australia?

The May 2026 national full-time adult ordinary-time weekly earnings observation was AUD 2,083.70; its 52-week monthly equivalent is A$9,029.37. That is a national population average, not a salary benchmark for a particular city, engineer or other job title.

How much does an Australian employee cost beyond salary?

The employer adds a 12% super guarantee to qualifying earnings, subject to the annual A$270,830 maximum contributions base for 2026–27. In the national full-time-adult illustration, salary plus selected SG is A$10,112.89 a month; it excludes state payroll tax, workers compensation, award-related benefits, other benefits and provider fees.

How much annual leave do employees get?

An employee other than a casual receives 4 weeks of paid annual leave for each year of service; eligible shiftworkers receive 5 weeks. The applicable award or enterprise agreement may add conditions, so use the national entitlement as the floor rather than the whole leave position.

Does probation remove notice?

No. Most full-time and part-time employees must receive written notice when dismissed during probation, unless an applicable exception such as serious misconduct applies. The employer sets probation, typically for 3–6 months; it is distinct from the minimum employment period for unfair-dismissal eligibility.

Do public holidays differ by state?

Yes. Public holidays vary by state, territory and region. Check the employee’s work location and then the applicable award, agreement or contract for work and pay treatment; the calendar alone does not establish a universal penalty rate.

Can a foreign company hire without its own entity?

A foreign company can consider direct employment after Australian employer setup, an employer of record arrangement where the local arrangement qualifies, or genuinely independent contracting. The route does not remove the need to assess the working relationship: a contractor arrangement must be genuinely independent, and an individual labour contract can still engage the separate super guarantee test.

Sources

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