Guide to hire Employees in Australia

Employment trends and job market analysis in Australia

Australia is an optimal destination for businesses that want to expand globally. With a predominantly English-speaking population, it has an open economy that ranks 12th in the world by GDP and strong trade links.

It also sits in close proximity to powerhouse markets in the Asia Pacific region and has a rich spread of natural resources such as timber, petroleum, and natural gas. All of this has historically attracted healthy foreign investment and is supported by a well-educated workforce population of 13,599,300.

Since 2020, the Australian mining industry has experienced interesting recruitment trends influenced by various factors such as technology, commodity prices, and project development fluctuations.

Strong demand is expected for professionals with expertise in coal (especially metallurgical coal), iron ore, gold, copper, and other hard rock commodities, particularly in remote locations. Leadership and specialised technical professionals are in short supply but highly sought after. The growing role of technology and innovation drives demand for professionals with a proven track record in implementing technology within the industry.

While there is a positive outlook for recruitment, staffing needs vary widely among organisations, with some seeking international candidates to fill skill shortages.

Our guide below provides a comprehensive overview for hiring employees in Australia.

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Capital                                                     Canberra

Languages spoken                                  English

Population size                                        27.10 million

Payroll frequency                                     Monthly and Bi-monthly

Currency                                                  Australian Dollar (AUD)

GST                                                         10% 

Taxes and payroll in Australia

Employer contributions in Australia

Payroll tax

Payroll tax in Australia is levied on the wages paid to employees in Australia by the employer. As it is not a federal tax, the pay rates and threshold amounts vary from state to state. The table below summarises the current pay rates and thresholds for all the states and territories within Australia:

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STATE/TERRITORY                    THRESHOLD                    PAY RATE

New South Wales                          $1200,000                         4.85%

Victoria                                          $650,000                           4.85%

Queensland                                  $1300,000                         4.75% to 4.95% 

South Australia                              $1500,000                         0 to 4.95%

Western Australia                          $1000,000                         5.5% to 6.5%

Tasmania                                       $1250,000                         4% to 6.1%

Australian Capital Territory            $2000,000                         6.85%

Northern Territory                          $1500,000                         5.5% 

Superannuation

Also referred to as Super, this is s a retirement pension benefits fund for all employees in Australia.  As if 2022, employers contribute 10.5% of an employee’s ordinary time earnings (OTE) if they are over 18 years of age or under 18 years of age but work more than 30 hours weekly. Superannuation is set to go up by 0.5% each year until 2025.

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Employee taxes in Australia

Personal income tax

The amount of income tax paid by employees in Australia depends on how much they earn. For residents in Australia, the initial AUD$ 18,200 they earn is exempted from tax. Upon completing their tax file number (TFN) declaration, an employee can claim a tax-free threshold.

The table below illustrates the complete list of tax rates Australian residents must pay in AUD$: 

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INCOME                                  TAX RATE

$18,200 and below                 Exempted 

$18,201 to $45,000                 19 cents for each $1 over $45,000

$45,001% to $120,000            $5,092 plus 32.5 cents for each $1 over $45,000

$120,001 to $180,000             $29,667 plus 37 cents for each $1 over $120,000

$180,001 and over                  $51,667 plus 45 cents for each $1 over $180,000

Medicare

Medicare is a national insurance scheme that provides free or subsidised healthcare for Australians. The Medicare levy consists of 2% of an Australian resident’s taxable income and must be paid in addition to their personal income tax. Some employees can get a reduction or exemption depending on their personal circumstances.

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What are the labour laws to be aware of in Australia?

Expanding a business to Australia requires a good understanding of the country's labour laws to ensure compliance and successful operations. Here are some key labor laws and regulations to be aware of:

Fair Work Act 2009

This is the primary legislation governing employment and workplace relations in Australia. It covers various aspects of employment, including minimum wage, working hours, leave entitlements, and unfair dismissal.

National Employment Standards (NES)

Part of the Fair Work Act, the NES sets out 10 minimum employment entitlements for most employees, including maximum weekly working hours, annual leave, personal/carer's leave, compassionate leave, public holidays, and more.

Employment contracts

Written employment contracts are essential and should clearly outline terms and conditions of employment, including job responsibilities, remuneration, working hours, leave entitlements, and notice periods for termination.

Unfair dismissal and termination

The Fair Work Act provides protection against unfair dismissal for eligible employees. Employers need to follow fair and valid procedures when terminating employees and must have a valid reason for the termination.

Anti-discrimination laws

Australia has strict laws against workplace discrimination based on factors such as race, gender, age, disability, sexual orientation, and more.

Health and safety

Employers have a legal obligation to provide a safe and healthy work environment for employees. The Work Health and Safety Act 2011 outlines the requirements for workplace health and safety.

Workplace bullying and harassment

Employers are responsible for preventing and addressing workplace bullying and harassment. Adequate policies and procedures must be in place to address such issues.

Enterprise agreements

Some businesses operate under enterprise agreements negotiated between employers and employees or their representatives. These agreements can set out terms and conditions of employment that might differ from the standard.

Minimum wage in Australia

The minimum wage in Australia is currently set at AUD$21.38 per hour (AUD$812.44 per week). This figure was revised on 1st July 2022. The average salary in Australia is $68,900 and $35.30 per hour.

Working hours in Australia

Employees can work a maximum of 38 hours in a work week, with working days typically lasting 8 hours. Time worked outside the spread of ordinary hours can attract overtime rates.

Employee benefits in Australia

Australia has one of the most comprehensive benefits schemes and therefore, there are many laws in place designed to uphold its integrity. Regulations tend to vary by state making it crucial for employers to understand both the federal and state laws that govern the location a company operates in.

Mandatory benefits in Australia

Apart from Medicare and Superannuation, Australian employees are also entitled to:

Workers’ compensation insurance

This is designed to protect workers during work-related injuries. Premiums make up a percentage of the employee’s pay and are based on factors such as claim history, industry, and remuneration. Employers are expected to purchase this form of insurance for employees in each state and territory in which they are based.

Flexible work

Under Australia’s Fair Work Act, some employees have a legal right to request for flexible work arrangements once they have provided an employer with a continuous 12 months of work.

Supplementary benefits in Australia

Offering employees benefits beyond the status quo shows that your company is invested in their well-being. Supplementary benefits should be designed to reflect the current state of your employees' needs and provide them with additional support for their everyday living expenses.

For example, the Australian Taxation Office (ATO) has recently made it possible for eligible employees to claim work from home expenses when filing their tax returns.

These deductions include:

• Electricity expenses on heating, cooling and lighting

• Decline in value of home office furnishings

• Cleaning

• Personal phone

• Internet

• Computer consumables and stationery

Some other common forms of supplementary benefits in Australia include:

• Group insurance

• Life and disability insurance

• Health insurance

• Childcare centres and subsidies

• Education advancement opportunities

• Employee assistance programs (EAPs)

• Commuter allowance

• Stock options

• Fitness centre memberships

Types of leave available in Australia

Annual leave

Full-time employees in Australia are entitled to four weeks of paid annual leave per year. Shiftworkers can get up to five weeks of annual leave per year.

Public holidays

Public holidays in Australia vary by state, however Australians celebrate 7 national public holidays comprising of:

• New Year’s Day

• Australia Day

• Good Friday

• Easter Monday

• Anzac Day

• Christmas Day

• Boxing Day

Personal leave

Sick and carer’s leave come under the same entitlement in Australia. According to the National Employment Standards, the yearly entitlement is based on an employee's hours of work and is 10 days for full-time employees and pro-rata for part-time employees.

Sick leave is accumulated during each year of employment and begins from an employee's first day of work. It is based on their ordinary hours of work and any balance at the end of the year is carried forward to the next.

Sick and carer's leave accumulates when an employee is on:

• Paid leave such as annual leave and sick and carer's leave

• Community service leave including jury duty

• Long service leave

Sick and carer's leave doesn’t accumulate when the employee is on:

• Unpaid annual leave

• Unpaid sick or carer's leave

• Unpaid parental leave

• Unpaid family and domestic violence leave

Parental leave

Parental leave in Australia is provided by the Federal Government. Its entitlements include:

• Maternity leave

• Paternity and partner leave

• Adoption leave

• Special maternity leave

• A safe job and no safe job leave

All employees are entitled to up to 12 months of unpaid parental leave. Employees who are the primary caregiver of a newborn or newly adopted child can apply for 18 weeks of paid parental leave (PLP) by applying to Australia’s federal government parental leave pay scheme.

The PLP payment system is managed by Services Australia.

Compassionate and bereavement leave

Employees are entitled to up to two days of compassionate leaver at any time when:

• A member of their immediate family or household dies, or contracts or develops a life-threatening illness or injury

• A baby in their immediate family or household is stillborn

• They have a miscarriage

• Their current spouse or de facto partner has a miscarriage

Family and domestic violence leave

Full-time, part-time, and casual employees in Australia are entitled to five days of unpaid family and domestic violence leave per year. This entitlement comes from the National Employment Standards (NES).

Long service leave

Long service leave is granted to employees who have provided a long period of continuous service to an employee.

Long service leave entitlement is determined by each state or territory’s jurisdiction that is centered around:

• How long an employee has to work to qualify for long service leave

• How much leave the employee receives

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New South Wales

Employees are entitled to two months (8.6667 weeks) of long service leave upon completing 10 years of continuous service after the initial 10, employees are entitled to a further month of long service leave. 

Victoria

Employees are entitled to an amount of long service leave on ordinary pay equal to 1/60th of the period of continuous employment after completing a minimum of 7 years’ continuous service with their employer. 

Queensland

Employees are entitled to eight and two-thirds weeks of leave after a period of 10 years’ of continuous employment. Beyond 10 years, they are entitled to an additional 4.333 weeks of leave for each additional five years of continuous service. 

South Australia

Employees are entitled to 12 weeks of long service leave upon 10 years of continuous employment. They are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years. 

Western Australia 

Employees are entitled to eight and two-thirds of leave after 10 years of continuous employment. They are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years. 

Tasmania

Employees are entitled to eight and two-thirds weeks of long service leave upon the completion of 10 years of continuous service. They are entitled to four and one-third weeks for each additional five years of service after the initial 10 years. 

Australian Capital Territory

Employees are entitled to just over six weeks of leave upon completion of seven years of continuous service. For each subsequent year of service, employees accrue a further one-fifth of a month of long service leave. 

Northern Territory

Employees are entitled to 13 weeks of leave upon completion of 10 years of continuous employment. They are entitled to an extra 1.3 weeks of long service leave for each additional year of service following the initial 10 years which can only be taken after an additional five years’ service. 

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Community service leave

An employee is eligible for community service leave while they are engaged in activities such as volunteer emergency management or jury duty. There is no limit on the amount of community service leave an employee can take.

A voluntary emergency management activity is described as any of the following:

• It involves dealing with an emergency or natural disaster

• The employee engages in the activity on a voluntary basis

• The employee was either requested to engage in an activity, or it would be reasonable to expect that such a request would have been made if circumstances had permitted, and

• The employee is a member of or has a member-like association with a recognised emergency management body.

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What are the employee rights in Australia?

In addition to the key labour laws mentioned earlier, employees in Australia have various rights and entitlements that are protected under the Fair Work Act and other relevant legislation. Here are some important employee rights in Australia:

Protection against unfair dismissal

Eligible employees have the right to protection against unfair dismissal. Employers must have a valid reason for termination and follow a fair process.

Protection against workplace discrimination

Employees are protected against discrimination based on factors such as race, gender, age, disability, sexual orientation, and more. Discrimination can occur during recruitment, employment, and termination.

Minimum wage

As mentioned above, employees have the right to be paid at least the minimum wage as determined by the Fair Work Commission. This ensures that workers receive a fair wage for their work.

Working hours and breaks

Employees have the right to reasonable working hours and breaks during their shifts. The Fair Work Act sets out guidelines for maximum weekly working hours and rest breaks.

Superannuation

Employees have the right to employer contributions to their superannuation (retirement savings) fund. Employers are required to make regular superannuation contributions on behalf of their employees.

Access to fair work information

Employees have the right to access information about their rights and entitlements under the Fair Work Act, including through the Fair Work Ombudsman's resources.

Privacy

Employees have the right to privacy in the workplace, including the protection of their personal information.

Access to collective bargaining

Employees have the right to engage in collective bargaining through unions or other representative bodies to negotiate terms and conditions of employment.

It's important to note that these rights may vary based on an employee's specific circumstances, including their employment status (contract vs. permanent roles) and the terms outlined in their employment contract.

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Termination of employment in Australia

Whether an employee chooses to leave a company or the employer decides to dismiss them, termination can occur for a variety of reasons. 

Upon termination, the employee is typically expected to provide the employee with a written notice addressing their last day of employment (with some exceptions). 

The notice can be given by:

• Delivering it in person to the employee

• Leaving it at the employee's last known address

• Sending it by pre-paid post to the employee’s last known address

• If the employee agrees, sending it electronically by email or text message

Alternatively, an employer can choose to let the employee work through their notice period, pay it out to them (known as pay in lieu of notice, or provide the employee with a combination of the two. 

If the employer pays out the notice, they must pay the employee the full amount they would have received if they had worked through the notice period. This includes:

• Incentive-based payments and bonuses

• Loadings

• Monetary allowances

• Overtime

• Penalty rates

• Any other separately identifiable amounts

The employment period also will end on the date that payment in lieu of notice is made.

The employee will stay employed for any part of the notice period that isn't paid out. 

Notice during probation periods

If employment is terminated during an employee's probation period, they are entitled to receive or be paid out notice based on their length of service.

Ending apprenticeships and traineeships

Terminating apprentice or trainee employees requires extra steps to end a contract. Employers must contact their state or territory training authority for information related to ending either of these.

Serious misconduct

The employer is not entitled to provide any termination notice if an employee is terminated due to serious misconduct. They must, however, pay the employee any outstanding entitlements such as annual leave and in some cases, long service leave. The latter depends on the state or territory laws that govern the entitlement.

Examples of serious misconduct include:

• Causing serious and imminent risk to the health and safety of another person or to the reputation or profits of their employer's business

• Theft, fraud, assault, sexual harassment

• Refusing to carry out a lawful and reasonable instruction that is part of the job.

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Do you need to hire employees in Australia?

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Talk to us

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Contact

Mrs. Emanuela Ferina

Head of Global Payroll

emanuela.ferina@studio-bcs.com

Phone 0039 0 363 360254

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