Employer of Record Australia: A Comprehensive Guide on Employer of Record 2025
Expanding your business into Australia is a promising opportunity, but navigating its complex employment laws, tax structures, and compliance obligations can be challenging. From the Fair Work Act to superannuation and payroll tax, every detail must be handled correctly to avoid legal and financial setbacks. Partnering with an Employer of Record in Australia offers a simple, compliant solution. An EOR becomes the legal employer on your behalf, managing payroll, contracts, taxes, and statutory benefits while you maintain control over daily operations. This eliminates the need to establish a legal entity, significantly reducing setup time, costs, and administrative burdens. With an EOR partner, you can focus on business growth while staying fully compliant. Keep reading this blog to explore how Employer of Record Services in Australia can streamline your expansion and safeguard your global workforce.
- Introduction
- What is an Employer of Record in Australia
- Employer of Record vs Legal Entity
- Choose Between an EOR Australia Partner and a Legal Entity
- Use Cases for EOR Services in Australia
- Laws and Compliance Best Practices to Hire in Australia
- Best EOR Companies in Australia
- What are EOR Services in Australia
- Hiring Process through an EOR in Australia
- Remote EOR Employee Onboarding Checklist
- Processing Payroll in Australia
- Taxes in Australia
- Superannuation (Mandatory Retirement Fund)
- Workers’ Compensation and Other Contributions
- Asanify’s Support for Employee Tax Optimization
- CTC Calculator for Hiring in Australia
- Key Considerations While Hiring Employees through EOR
- Termination Policies in Australia
- Bonus Payments in Australia
- Health Insurance in Australia
- Employee Benefits in Australia
- Terminations in Australia (Contractor vs Full-time)
- Visa Types in Australia
- Risks or Drawbacks of EOR Australia
- EOR vs HR Software in Australia
- EOR Service Costs in Australia
- Conclusion: EOR Australia
- FAQs – Employer of Record in Australia
What is an Employer of Record in Australia
An Employer of Record in Australia is a third-party organization that legally employs workers on behalf of another company. The EOR becomes the legal employer, handling employment contracts, payroll, taxes, and compliance, while the client company maintains control over day-to-day tasks and employee deliverables. This model allows businesses to onboard employees quickly and remain compliant with local employment laws without the need to establish a legal entity in Australia.
Employer of Record vs Legal Entity
| Criteria | Legal Entity (LE) – Australia | Employer of Record (EOR) – Australia |
| Definition | A legal entity is a company registered under Australian law (e.g., ASIC) that can directly hire employees and operate independently. | An EOR is a third-party provider that legally employs Australian workers on behalf of a foreign company, handling all compliance and employment formalities. |
| Ownership | Fully owned and operated by the foreign company or its shareholders through local incorporation. | The EOR is the legal employer, but the client company retains control over employees’ day-to-day tasks and performance management. |
| Employment Contracts | Employees are hired directly by the entity under Australian employment contracts that must comply with the Fair Work Act and relevant Modern Awards. | The EOR signs contracts with employees and ensures compliance with all applicable Australian labour laws and award obligations. |
| Compliance Responsibility | The legal entity must ensure compliance with tax laws, superannuation, Fair Work requirements, leave entitlements, and more. | The EOR assumes all local compliance responsibilities, including employee entitlements, tax reporting, and HR policies. |
| Payroll & Benefits Management | The entity manages all payroll functions, PAYG tax withholding, superannuation contributions, and benefits like leave accrual and insurance. | The EOR handles payroll, tax deductions, superannuation, and employee benefits on behalf of the client company. |
| Tax Liabilities | The entity is responsible for business taxes, payroll tax, PAYG withholding, fringe benefits tax (if applicable), and employee-related taxes. | The EOR manages and assumes employee-related tax obligations and ensures accurate payroll tax and PAYG reporting. |
| Time to Set Up | Setting up an Australian entity can take weeks to months, including ASIC registration, TFN, ABN, and bank account setup. | EOR setup is fast—often within days—since the infrastructure and legal presence are already in place. |
| Employee Onboarding | Requires building internal HR capability, processes, and systems to manage onboarding, contracts, and compliance documentation. | The EOR manages onboarding end-to-end, including contracts, induction, background checks, and statutory documentation. |
| Employment Law Expertise | The company needs in-house or external legal/HR consultants with expertise in Fair Work compliance, awards, and workplace relations. | The EOR has established legal and HR teams experienced in Australian labor law, reducing risk for the client. |
| Risk & Liability | The entity bears full liability for employment-related issues, disputes, and regulatory breaches under Australian law. | The EOR assumes the employment-related legal risks, providing a compliance shield for the client business. |
| Control Over Workforce | Offers full control over all HR policies, recruitment, terminations, and strategic workforce planning in Australia. | The client controls daily work and performance, while the EOR handles HR operations and legal compliance. |
| Flexibility | Less flexible and requires considerable effort to scale or wind down operations due to legal and administrative commitments. | Highly flexible; enables rapid scaling up or down of workforce across Australian states and territories without entity setup. |
| Cost & Investment | High costs for incorporation, legal, accounting, payroll systems, and ongoing compliance; suitable for long-term commitment. | Lower upfront investment; ideal for short-term expansion, pilot teams, or exploring the Australian market without permanent establishment. |
| Global Expansion | Expanding into Australia requires full legal presence, which can delay go-to-market plans and increase operational complexity. | EOR allows companies to expand into Australia quickly while outsourcing compliance, making international growth fast and low-risk. |
Choose Between an EOR Australia Partner and a Legal Entity
Legal Entity in Australia
Establishing a legal entity in Australia involves registering a company with the Australian Securities and Investments Commission (ASIC), obtaining a Tax File Number (TFN) and an Australian Business Number (ABN), setting up superannuation and insurance, and adhering to labor laws governed by the Fair Work Commission. While offering greater control, the process demands substantial time, investment, and expertise.
What are the Use Cases for Availing of Services Under Employer of Record Australia?
1. Business Expansion Without a Legal Entity
Companies aiming to explore the Australian market can leverage an EOR to test the waters without the overheads of setting up a local entity. This model is particularly beneficial for startups and SMEs seeking quick market validation.
2. Offering Full-time Employment to Contractors or Freelancers
Businesses with long-term freelance relationships can convert contractors into full-time employees through an EOR, ensuring compliance with employment laws and providing job security to workers.
3. Recruiting Talent Globally
Global firms can tap into Australia’s rich talent pool across sectors such as technology, healthcare, finance, and education by hiring locally via an EOR, all while maintaining global HR consistency.
Laws and Compliance Best Practices to Hire Employees in Australia
Hiring in Australia requires strict adherence to the Fair Work Act 2009, which outlines minimum employment standards known as the National Employment Standards (NES). Employers must also comply with modern awards, anti-discrimination laws, workplace safety regulations, and privacy laws. Best practices include issuing written employment contracts, maintaining accurate records, and conducting regular compliance checks.
Best EOR Companies in Australia
The top EOR service providers in Australia combine global experience with deep local knowledge. Notable names include Deel, Remote, Papaya Global, and Asanify. When choosing an EOR, factors to consider include technology platforms, customer support, pricing transparency, and their track record in the Australian market.
What are EOR Services in Australia
Payroll Management
Payroll Management is a core component of EOR services in Australia. Employers must manage complex payroll requirements, including salary payments, superannuation contributions, and PAYG tax withholding. EOR providers handle all aspects of payroll processing, ensure compliance with Single Touch Payroll (STP) reporting, and file relevant tax returns. This ensures accurate and timely payments to employees while keeping businesses compliant with ATO regulations, reducing the risk of penalties.
Employee onboarding
Employee Onboarding is a key service provided by EORs in Australia. It includes preparing Fair Work-compliant contracts, verifying employment eligibility, and collecting necessary documentation. EORs simplify the process for global companies by managing statutory onboarding requirements and streamlining local procedures. This ensures smooth integration of new employees while enabling companies to begin operations in Australia without delay or legal risk.
HR Administration
HR Administration provided by EORs covers essential day-to-day tasks like maintaining employee records, tracking leave, and handling employee queries. EOR providers support HR processes by offering digital platforms that allow employees to access payslips, apply for leave, and update personal information. This reduces administrative overhead for the employer and enhances employee experience with self-service capabilities and streamlined workflows.
Equipment procurement and management
Equipment Procurement and Management services are essential for companies with remote or hybrid teams. EORs assist with sourcing, delivering, and maintaining work-related equipment like laptops, software, or communication tools. By managing logistics and IT support, EORs ensure that employees in Australia have the tools required for productivity while protecting company assets with proper tracking and recovery protocols.
EOR Australia services
Compliance and Legal Support
Compliance and Legal Support is crucial for businesses entering Australia, which has strict labor laws under the Fair Work Act. EOR providers ensure compliance with NES standards, industry awards, and occupational health and safety regulations. They manage contracts, policy updates, and employment documentation, reducing legal risk and supporting foreign companies unfamiliar with Australia’s employment legislation.
Taxation and Statutory Compliance
Taxation and Statutory Compliance services include handling PAYG withholding, superannuation contributions, and state-based payroll tax obligations. EORs ensure that all tax reporting and remittances are submitted accurately and on time. They also manage employer obligations under Single Touch Payroll (STP), helping businesses maintain transparency and avoid non-compliance penalties under ATO regulations.
Employee Insurance and Benefits Administration
Employee Insurance and Benefits Administration services involve managing mandatory and optional employee benefits. EORs ensure compliance with requirements such as workers’ compensation insurance and assist in offering private health insurance, salary packaging, and other perks. These benefits align with Australian norms and improve employee retention by enhancing workplace satisfaction.
Risk Management and Insurance
Risk Management and Insurance services from EORs help businesses mitigate employment-related liabilities. EORs provide protection against legal claims, compliance audits, or termination disputes. They also ensure that employer insurance policies are in place and up to date, minimizing exposure to risks associated with hiring and managing a workforce in Australia.
Self-serve employee portal
A Self-Serve Employee Portal is a standard offering by leading EORs, allowing employees to independently manage their HR data. Through this digital portal, employees can view payslips, leave balances, and superannuation details. It also allows them to update personal records, submit time-off requests, and access company documents, reducing reliance on HR and improving operational efficiency.
Employee Tax Optimization
Employee Tax Optimization services help workers structure their salary for maximum tax efficiency. EORs provide advice on deductions, salary packaging, and other tax-saving strategies in line with ATO rules. This enhances employee satisfaction by increasing take-home pay while ensuring full compliance with income tax and payroll reporting requirements.
Employee Requirement
EOR services in Australia also cover employee retirement benefits like superannuation. Providers manage employer contributions, ensure funds are deposited into nominated super funds, and comply with quarterly lodgement schedules. These services protect employee entitlements and keep businesses aligned with the Superannuation Guarantee legislation and the Australian Prudential Regulation Authority (APRA) rules.
Offboarding & Recovery
Offboarding and Recovery services ensure legal compliance and professionalism during employee exits. EORs manage final pay, superannuation contributions, and unused leave entitlements. They also conduct exit interviews, retrieve company equipment, and ensure documentation is properly completed. This supports a positive offboarding experience and reduces risk for the employer.
Hiring Process through an EOR in Australia
Hiring employees through an EOR Australia Partner offers businesses a streamlined, compliant way to establish a presence in Australia without the need for a legal entity. By partnering with an EOR provider, companies can bypass the complexities of labor laws, tax regulations, and administrative tasks.
EOR Australia Partner
An EOR Australia Partner is a third-party service provider that acts as the official employer of record for your employees in Australia. The EOR partner handles all employment-related obligations, including compliance with local labor laws, payroll, tax filings, benefits administration, and more. By working with an EOR, you can focus on business operations, recruitment, and talent management while ensuring that your employees in Australia are fully compliant with statutory regulations. The EOR partner also mitigates risks associated with non-compliance, such as penalties or legal disputes, ensuring that all HR and employment practices meet Australia’s stringent requirements.
Select the Best EOR Service Provider in Australia for Your Business
Choosing the right EOR service provider is a crucial step in ensuring the success of your operations in Australia. The best EOR partner should have in-depth knowledge of Australian labor laws, strong local market experience, and a proven track record of providing comprehensive employee management solutions. When evaluating EOR companies, look for factors such as their level of expertise in payroll management, HR support, compliance handling, and employee benefits administration. Additionally, ensure that the EOR provider offers flexible service packages that align with your company’s specific needs.
Hire & Onboard Your New Employees
Once you have selected an EOR Australia partner, the next step is to begin the hiring process. Your EOR partner will help you recruit the best talent for your business needs by advertising job openings, interviewing candidates, and handling employment documentation. The EOR will also manage the employee onboarding process, ensuring that new hires receive a compliant employment contract, go through the necessary training, and understand their roles and responsibilities. This process is designed to make the transition smooth for both the employee and the employer while ensuring full legal compliance in Australia.
Remote EOR Employee Onboarding Checklist for Australia
| Onboarding Step | Responsibility | Details |
| Before Offer Letter | ||
| Collect Employee Details | Company | Gather necessary details like name, DOB, contact info, address, previous employment docs, etc. |
| After Offer Letter | ||
| Draft Employment Contract | EOR | Create localized employment agreements compliant with Australian labor laws and Fair Work standards. |
| Background Verification | EOR | Conduct background checks with informed consent from the new hire. |
| Welcome Email | Company & EOR | Company sends welcome email; EOR conducts local onboarding process. |
| On Joining Day | ||
| Employment Documentation | EOR | Ensure all paperwork like contracts, NDAs, tax forms, etc., are completed and filed. |
| Payroll Setup | EOR | Collect required docs, set up payroll systems and tax calculations. |
| Policy Briefing | Company | Explain leave policies, Fair Work entitlements, and company procedures to the new hire. |
| Account Setup | EOR | Assist with bank account setup for salary deposits. |
| Introduction to Systems | EOR | Provide a walkthrough of payroll and HRIS systems. |
| IT Setup | Company/EOR | Provide necessary equipment, software, IT training, and communication channels. |
| Mentor Assignment | Company | Assign a buddy/mentor to help the new hire acclimate to company culture. |
| Post-Onboarding | ||
| Payroll Explanation (First Paycheck) | EOR | Explain payslip components like deductions, contributions, and net pay. |
| Ongoing Support | Company | Schedule regular check-ins and 1:1 meetings to provide ongoing support and feedback. |
| HR Operations | EOR | Manage payroll processing, compliance, benefits administration, and other HR operations. |
Processing Payroll
Processing payroll in Australia can be complex due to various legal requirements involving taxes, superannuation, and employee entitlements. An EOR partner takes care of the entire payroll process, ensuring that employees are paid accurately and on time while adhering to Australian payroll regulations.
Key components of payroll management in Australia include:
- Salary and Wages: The base salary, allowances, loadings, and bonuses are processed according to the agreed-upon compensation package.
- Statutory Deductions: This includes compulsory superannuation contributions and deductions for payroll tax, if applicable by state. These are calculated based on salary thresholds set by the Australian Taxation Office (ATO).
- Pay As You Go (PAYG) Withholding: Employers must deduct PAYG tax from salaries and remit it to the ATO regularly.
- Other Benefits: If applicable, benefits like insurance, annual leave loading, and long service leave are also managed during payroll processing.
The payroll process in Australia typically involves three stages:
- Payroll Calculation: This stage involves calculating the gross earnings, allowances, and deductions such as superannuation and taxes for each employee.
- Tax Compliance: PAYG tax is calculated and deducted. The EOR ensures compliance with reporting obligations such as Single Touch Payroll (STP) submissions to the ATO.
- Salary Disbursement: After all deductions, the final salary is paid to employees. The EOR ensures timely and compliant disbursements and handles payslip distribution.
Taxes in Australia
Taxes are a critical aspect of the Australian financial system, and employees in Australia are subject to various types of taxes. The primary taxes that employees need to be aware of are income tax, Pay As You Go (PAYG) withholding, and Medicare Levy. Understanding these taxes and their respective brackets is essential for financial planning and compliance.
Resident Income Tax Rates (2024–25)
| Income Slab | Tax Rate |
| Up to AUD 18,200 | Nil |
| AUD 18,201 to AUD 45,000 | 19% over AUD 18,200 |
| AUD 45,001 to AUD 120,000 | AUD 5,092 + 32.5% over AUD 45,000 |
| AUD 120,001 to AUD 180,000 | AUD 29,467 + 37% over AUD 120,000 |
| Over AUD 180,000 | AUD 51,667 + 45% over AUD 180,000 |
Tax Due Dates in Australia
Tax due dates in Australia are essential to ensure timely lodgment and avoid penalties. Individuals must lodge tax returns for the financial year (July 1 to June 30) by October 31. PAYG withholding must be remitted monthly or quarterly by the 21st of the following month. Employers must also issue payment summaries and complete Single Touch Payroll (STP) reporting. Timely compliance avoids ATO-imposed fines and ensures smooth employer operations.
Tax Thresholds in Australia
Australia applies a progressive tax rate system, meaning the more an individual earns, the higher the tax rate. For the 2024–25 tax year, income up to AUD 18,200 is tax-free. Higher income brackets are taxed at marginal rates ranging up to 45%. Businesses must also pay corporate tax (generally 25–30%) and payroll tax, which varies by state. Understanding these thresholds is crucial for calculating accurate employee and business tax obligations.
Pay As You Go (PAYG) Withholding
PAYG withholding is the Australian system where employers withhold income tax from employee salaries and remit it to the ATO. This applies to wages, bonuses, and certain allowances. Employers are responsible for calculating and submitting these amounts via STP-enabled systems on each payday. PAYG ensures that employees meet their tax obligations incrementally. Failure to comply can lead to ATO penalties and legal implications.
Medicare Levy
The Medicare Levy is a 2% tax applied to most Australian taxpayers to fund the public healthcare system. Individuals with lower incomes may receive a full or partial exemption. Employers do not directly handle Medicare Levy, but it is included in the overall PAYG withholding calculation. Employees earning above AUD 90,000 may also be subject to an additional Medicare Levy Surcharge if they don’t have private health insurance.
Deductions and Offsets
Australia’s tax system allows for numerous deductions and tax offsets, helping reduce an employee’s taxable income. Common deductions include:
- Work-related expenses: Such as travel, uniforms, and tools.
- Superannuation contributions: Voluntary personal contributions may be deductible.
- Education and training expenses: If directly related to current employment.
Employers can support employees by providing detailed payslips and facilitating access to tax records, helping them claim relevant deductions during tax filing.
Superannuation (Mandatory Retirement Fund)
Superannuation is Australia’s compulsory retirement savings scheme. Employers must contribute 11% (as of 2024–25) of an employee’s ordinary time earnings to a nominated super fund. These contributions are on top of salary and must be reported and paid at least quarterly. Employees may also make voluntary contributions. Super is a cornerstone of Australia’s retirement system and is strictly regulated by the ATO and APRA. Employers must ensure timely and accurate reporting to avoid penalties.
Workers’ Compensation and Other Contributions
Employers in Australia must provide workers’ compensation insurance, which covers workplace injuries and illnesses. Contribution rates vary by industry and state. Some businesses may also be liable for fringe benefits tax (FBT) if they provide perks like cars or expense reimbursements. Compliance with these obligations ensures protection for both employees and employers under Australian labor laws.
Asanify’s Support For Employee Tax Optimization
Asanify is a trusted EOR service provider helping businesses simplify employment in Australia. With deep knowledge of Australian payroll tax, superannuation, and PAYG compliance, Asanify ensures accurate salary disbursements, reporting, and documentation. The platform provides support for tax recordkeeping, deduction tracking, and STP filings, helping employees maximize deductions and offsets. Asanify enables businesses to remain compliant with ATO regulations while optimizing tax outcomes for their employees.
CTC Calculator for Hiring Employees in Australia
When hiring employees in Australia, understanding the Cost to Company (CTC) is essential for both employers and employees. CTC refers to the total annual expense a company incurs for employing an individual, including base salary, superannuation contributions, bonuses, payroll tax, and other statutory benefits. To simplify compensation planning, businesses can use a CTC Calculator to break down all components of an employee’s total remuneration. This helps employers assess the full cost of hiring while giving employees a clear picture of their take-home pay after deductions like PAYG withholding and superannuation. It ensures transparency and compliance with Australian employment standards. For more details on salary structures, statutory contributions, and how to calculate CTC in Australia, check out our blog!
Key Considerations While Hiring Employees through EOR in Australia
Employee Agreements in Australia
Employee agreements are a critical component of hiring employees in Australia. An EOR partner ensures that all employment contracts comply with Australian labor laws, especially the Fair Work Act. These agreements typically include job roles, remuneration, working hours, confidentiality clauses, notice periods, and termination policies. A well-structured agreement protects both employer and employee, establishing clear expectations and legal protections. The EOR helps businesses draft compliant agreements that reduce risks of legal disputes and ensure smooth employment relationships.
Work Hours and Probation
Work hours and probation terms are essential components of employment agreements. The standard full-time workweek in Australia is 38 hours, generally distributed over five days. However, flexible arrangements may apply depending on the award or enterprise agreement. EOR providers ensure the probation period—usually three to six months—is clearly defined in the contract. During probation, the employer or employee may terminate the employment with a shorter notice period. Probation helps assess employee performance before confirming long-term employment.
Leave Policies
Australia provides specific leave entitlements under the Fair Work Act, which must be clearly outlined in employment agreements. An EOR partner helps structure these policies to ensure compliance while supporting employee well-being. The main categories include annual leave, public holidays, paid sick leave, and parental leave.
Standard Leave Policy in Australia
| Leave Type | Description | Duration |
| Annual Leave | Paid leave for rest and vacation | 4 weeks per year (for full-time employees) |
| Public Holidays | Paid days off for nationally and regionally recognized holidays | 10 days annually (varies slightly by state/region) |
| Sick Leave | Paid leave for personal illness or injury | 10 days per year (accruable, for full-time staff) |
| Parental Leave (Maternity/Paternity) | Unpaid leave after childbirth or adoption, with government-paid leave support | 12 months unpaid + 18 weeks government-paid leave |
These leave entitlements are mandated by the National Employment Standards (NES) and apply to all eligible employees. EOR partners ensure that contracts are legally compliant and accurately reflect these entitlements.
Types of Leaves in Australian Employment Law
Annual Leave
Full-time employees are entitled to four weeks of paid annual leave each year, which accrues progressively and carries over if unused. It is used for rest and vacation purposes.
Public Holidays
Employees are entitled to 10 paid public holidays annually, depending on the state or territory. If an employee works on a public holiday, they may be entitled to penalty rates.
Sick Leave
Also known as personal/carer’s leave, this allows employees to take paid time off when unwell. Full-time employees accrue 10 days per year, and the leave is cumulative.
Parental Leave
Employees who meet eligibility requirements can take up to 12 months of unpaid parental leave following childbirth or adoption. In addition, eligible employees may receive 18 weeks of government-funded paid parental leave, administered through their employer. EORs ensure correct leave tracking, documentation, and access to statutory entitlements.
Public Holidays in Australia 2025
| Date | Occasion | Category |
| 1 January 2025 | New Year’s Day | General Public Holiday |
| 26 January 2025 | Australia Day | General Public Holiday |
| 18 April 2025 | Good Friday | General Public Holiday |
| 19 April 2025 | Easter Saturday | General Public Holiday |
| 21 April 2025 | Easter Monday | General Public Holiday |
| 25 April 2025 | Anzac Day | General Public Holiday |
| 9 June 2025 | King’s Birthday (most states) | General Public Holiday |
| 7 October 2025 | Labour Day (most states) | General Public Holiday |
| 25 December 2025 | Christmas Day | General Public Holiday |
| 26 December 2025 | Boxing Day | General Public Holiday |
| 14 February 2025 | Valentine’s Day | Optional Holiday |
| 17 March 2025 | St Patrick’s Day | Optional Holiday |
| 31 October 2025 | Halloween | Optional Holiday |
| 24 December 2025 | Christmas Eve | Optional Holiday |
Termination Policies
Termination Policies in Australia must comply with the Fair Work Act 2009, ensuring fairness, proper notice, and lawful grounds. Employees can be terminated for reasons such as misconduct, redundancy, or poor performance, but termination must follow fair procedures and notice periods as mandated by law. The standard notice period ranges from one to five weeks depending on tenure and age. Unfair dismissal claims can be made if the termination process is not fair or valid. When employees are hired through an EOR Australia Partner, the EOR manages the termination process in full compliance with national employment standards, minimizing risk for the client company and ensuring fair treatment of employees.
Bonus Payments in Australia
Australia does not mandate annual bonus payments under law, but bonuses may be provided as part of an employee’s contract or through enterprise agreements. Bonuses are generally discretionary and linked to company performance or individual KPIs. Employers must ensure that any promised bonus—whether contractual or policy-based—is administered fairly and consistently. For employees managed through an EOR Australia Partner, the EOR oversees bonus processing according to contractual terms and ensures compliance with taxation and Fair Work regulations. This reduces administrative complexity for the employer while maintaining proper financial reporting and equitable treatment of employees.
Health Insurance in Australia
Health Insurance in Australia is partially covered by the public healthcare system (Medicare), which offers universal access to hospital and medical services. However, many employers provide private health insurance as a benefit to attract and retain skilled employees, especially for those earning above the income threshold subject to the Medicare Levy Surcharge. While not legally required, offering private health insurance is common in sectors like finance, tech, and consulting. For employees engaged through an EOR Australia Partner, the EOR can coordinate private health benefits or salary packaging in alignment with employer policies, supporting workforce well-being and tax-effective remuneration planning.
Suggested Read: PEO vs EOR Differences- All That You Need to Know
Employee Benefits in Australia
Employee benefits are a crucial aspect of the compensation package offered by companies in Australia. These benefits not only help attract and retain top talent but also contribute to employee well-being and job satisfaction. In Australia, employee benefits can be broadly categorized into statutory and supplementary benefits.
Statutory Benefits in Australia
Statutory Benefits are mandated by Australian labor laws under the Fair Work Act and other national regulations. These benefits ensure employees receive minimum entitlements, and employers remain compliant with national employment standards. Some of the key statutory benefits in Australia include:
Superannuation: Employers must contribute 11% (as of 2025) of an employee’s ordinary earnings to a superannuation fund, which supports retirement savings.
Paid Leave: Full-time employees are entitled to 4 weeks of paid annual leave, 10 days of personal/carer’s leave, and public holidays based on state or territory laws.
Parental Leave: Eligible employees can take up to 12 months of unpaid parental leave, with government-funded paid leave for up to 18 weeks under the Parental Leave Pay scheme.
Supplementary Benefits in Australia
Employers often provide supplementary benefits to enhance compensation and promote workforce engagement. These go beyond statutory entitlements and are offered at the employer’s discretion. Common supplementary benefits in Australia include:
Private Health Insurance: Many employers offer subsidized private health plans as a benefit to attract skilled workers and reduce the Medicare Levy Surcharge for high-income earners.
Performance Bonuses: Employers may offer performance-based bonuses tied to KPIs, business goals, or discretionary reward structures.
Equity or Stock Options: Tech firms and startups often provide stock options or employee share schemes as long-term incentives to align employee and company success.
Asanify’s Flexible Benefits Plan for EOR Employees
Asanify offers a modern Flexible Benefits Plan (FBP) tailored for employees in Australia working through an EOR model. The plan enables employers to offer personalized benefits such as wellness reimbursements, work-from-home allowances, or salary packaging options including novated car leases and super top-ups—maximizing employee satisfaction while ensuring tax efficiency.
Through Asanify’s intuitive platform, managing payroll and fringe benefits compliance becomes simple and streamlined. For employers, Asanify’s FBP enhances talent retention and allows customization of compensation without increasing the total CTC. By offering flexibility and compliance-focused tools, Asanify supports a balanced, attractive, and legally sound benefits strategy in Australia.
Terminations in Australia
Terminating employment in Australia involves distinct processes for contractors and full-time employees. While contractor agreements offer more flexibility, full-time employees are protected under the Fair Work Act, which governs notice periods, redundancy pay, and unfair dismissal protections. These regulations help balance employee rights with employer workforce management needs.
Notice Periods in Australia
In Australia, a notice period is the time either party must give before ending an employment contract. The Fair Work Act mandates minimum notice periods based on an employee’s length of continuous service, ranging from one to five weeks. Employment contracts may specify longer notice periods. Employers must either provide the notice or pay in lieu. EOR Australia partners ensure these terms are clearly documented and executed in compliance with national laws.
Severance Pay in Australia
Under the Fair Work Act, employees dismissed due to redundancy may be entitled to redundancy (severance) pay. Employees with at least 12 months of continuous service qualify, and the payment is calculated based on tenure—ranging from 4 to 16 weeks of base pay. This excludes casual workers and small businesses (fewer than 15 employees). EOR Australia providers handle severance payments accurately and ensure all conditions under modern awards and agreements are met.
Key Points
- Legal Compliance: Termination processes must comply with the Fair Work Act, including notice, redundancy pay, and procedural fairness.
- Documentation: Employers must maintain written records detailing termination reasons, notices issued, and supporting materials.
- Employment Contracts: Contracts should clearly outline termination procedures, notice periods, and redundancy entitlements.
- Employee Rights: All entitlements such as unused leave, final salary, and superannuation contributions must be honored.
Types of Termination
Termination for Cause
Termination for Cause occurs when an employee is dismissed due to misconduct, serious breach of policy, or unlawful behavior (e.g., theft, harassment, safety violations). In such cases, notice is not required, but procedural fairness must still be followed. This includes providing the employee with an opportunity to respond to allegations. EOR partners help employers navigate this process lawfully to avoid unfair dismissal claims.
Termination Without Cause
Termination Without Cause refers to dismissals due to restructuring, performance issues, or role redundancy. Employers must give proper notice and redundancy pay, where applicable. The employer should also give employees reasonable time to respond and explore redeployment options. EOR partners ensure lawful implementation of such terminations under NES obligations.
Collective Termination
Collective Termination involves terminating multiple employees due to downsizing or operational closure. While there’s no separate law for mass layoffs, if 15 or more redundancies occur, employers must notify Services Australia. EORs help manage communication, compliance, and payment processing in collective redundancies to avoid legal risks.
Voluntary Termination (Resignation)
Voluntary Termination happens when an employee resigns by giving notice as per their contract. Common reasons include career change, relocation, or job dissatisfaction. Employees must submit a formal resignation and work through their notice period. EORs manage final payroll, exit documentation, and transition support during resignation cases.
What are the key steps involved in terminating employees in Australia?
1. Serve Notice Period
The Fair Work Act mandates that employees receive notice based on tenure (1–5 weeks) or pay in lieu. The same applies for resigning employees. Contracts or awards may require longer periods. EORs ensure legal compliance in serving or receiving notice.
2. Termination for Cause
For serious misconduct, employers may terminate employment without notice. However, they must ensure a fair and transparent process: gather evidence, provide the employee an opportunity to respond, and document all proceedings. EOR partners help ensure lawful execution and procedural fairness.
3. Full and Final Settlement
Once the notice is served or termination executed, a full and final settlement must be completed. This includes:
- Final wages
- Leave entitlements (annual leave and long service leave, if applicable)
- Redundancy pay (if applicable)
- Superannuation contributions
- PAYG withholding and tax reporting
EOR partners handle all calculations and ensure timely disbursement in compliance with Australian regulations.
4. Documentation
Proper documentation ensures legal compliance and protects against future disputes. This includes:
- Formal termination or resignation letter
- Exit interview records (if conducted)
- Final payslip and payment summary
- Tax records and super fund notifications
EOR Australia partners ensure all documentation is thorough, accurate, and meets Fair Work and ATO reporting standards.
Recommended Read: Remote Employees Onboarding Checklist with EOR in Australia
How to Choose the Right EOR Australia Services?
Expertise and Local Knowledge
When selecting an EOR Australia Partner, it’s vital to choose a provider with deep expertise in the Australian market. The provider should understand the complexities of Fair Work laws, superannuation, tax regulations, and state-based compliance requirements. This ensures your business remains compliant and avoids potential legal and operational risks when employing in Australia.
Comprehensive Service Offerings
The ideal EOR service provider should offer end-to-end services, including payroll administration, tax withholding (PAYG), employee onboarding, superannuation management, and compliance reporting. A well-rounded provider can streamline workforce management in Australia so that your business focuses on operations and growth rather than local HR compliance.
Scalability and Flexibility
Your workforce requirements may evolve, and your EOR partner should offer the ability to scale with your needs—whether you’re hiring a single remote employee or building a full Australian team. The EOR should provide flexible solutions that adjust to your growth trajectory without operational disruption.
Technology and Data Security
Select an EOR Australia provider that uses secure, cloud-based platforms for payroll, HRIS, and compliance tracking. The provider should comply with Australian Privacy Principles (APPs) under the Privacy Act and enforce robust data protection standards to safeguard employee and business information.
Compliance and Risk Management
One of the key benefits of working with an EOR Australia partner is mitigating non-compliance risks. Ensure the EOR has a strong track record of managing regulatory filings, leave entitlements, and Fair Work audits. Their knowledge of award interpretation and reporting deadlines is crucial to protect your business.
Reputation and Client References
Check the EOR provider’s reputation through client testimonials, case studies, or independent reviews. A reputable partner will demonstrate consistent delivery of compliant and efficient services, and will be able to share success stories from global clients operating in Australia.
Expertise in Australian Employment Regulations
An EOR partner must have detailed knowledge of employment laws in Australia, including the Fair Work Act, superannuation rules, and local leave entitlements. This expertise ensures that employees are onboarded, managed, and offboarded in full compliance with Australian labor standards.
Service Offerings and Scalability
Ensure that the EOR Australia service provider delivers all essential services—payroll processing, employee benefits, contract management, and compliance. They should also be equipped to support scale, allowing your business to grow seamlessly in Australia without needing a legal entity.
Reputation and Client References
Review the provider’s credibility by seeking client references, checking customer satisfaction scores, or reading business testimonials. A proven track record in handling HR compliance, payroll accuracy, and workforce engagement is a strong indicator of a reliable EOR.
Data Security and Privacy Compliance
Given the sensitivity of employee data, your EOR Australia partner must comply with data protection laws, including the Privacy Act and Notifiable Data Breaches scheme. Ensure their systems protect personal, financial, and health data with secure encryption and access control protocols.
Transparent Pricing and Contractual Agreements
Before signing, verify that the provider’s pricing is transparent and aligns with your budget. Contracts should clearly define the scope of services, billing frequency, termination clauses, and service-level guarantees. This protects your business from hidden charges or future disputes.
Local Network and Support
A reliable EOR Australia partner should have an established local presence and a network of professionals—HR consultants, tax advisors, and employment lawyers—who can support your employees and business needs. Local support ensures timely resolution of issues without dependence on third-party consultants.
Benefits of Working With an Employer of Record Service Provider in Australia
Compliance and Legal Expertise
One of the most significant advantages of partnering with an EOR is gaining access to their deep expertise in Australian employment laws and compliance obligations. Australia’s workplace laws are governed by the Fair Work Act, which includes complex provisions around awards, taxes, superannuation, and employee entitlements. An EOR ensures your business complies with all national and state-level regulations, helping avoid legal complications and penalties.
Time and Cost Efficiency
Hiring employees in Australia through an EOR can save considerable time and operational costs. The EOR manages HR functions such as payroll, superannuation payments, tax withholding (PAYG), and leave entitlements. This removes the need for setting up a local legal entity, saving on business registration, HR systems, and legal infrastructure.
Swift Market Entry
An EOR enables businesses to enter the Australian market without the delays of establishing a legal entity. With an EOR Australia Partner, you can begin hiring and operating in just days. This rapid market access is ideal for companies exploring Australia as a new growth region or conducting pilot projects without long-term commitments.
Local HR Support
EOR providers offer essential local HR support in Australia. They understand workplace norms, cultural expectations, and employee relations under Australian law. The EOR manages onboarding, leave management, performance communication, and grievance handling—helping your international workforce operate smoothly and stay engaged.
Flexibility and Scalability
An EOR provides flexibility to scale your team up or down quickly based on business needs. Whether expanding or contracting your workforce, the EOR handles hiring, onboarding, payroll, and compliance tasks—without requiring long-term commitments or legal setup, allowing for agile operations.
Risk Mitigation
By serving as the legal employer, the EOR assumes responsibility for employment compliance, thus reducing your exposure to risks such as wrongful dismissal claims or disputes over entitlements. This shields your business from regulatory penalties while ensuring fair employee treatment as per Australian labor standards.
Cost Efficiency
Outsourcing HR and administrative functions to an EOR minimizes operational overhead. You avoid hiring local HR teams or legal experts, as the EOR handles taxation, payroll, superannuation, and recordkeeping. This model is highly cost-effective for foreign companies managing a lean international presence in Australia.
Mitigating Cultural and Language Barriers
While Australia is an English-speaking country, understanding cultural nuances, labor expectations, and communication styles is key to workforce success. EOR partners bridge this gap by offering local insight and context, ensuring employees are managed effectively and expectations are aligned with Australian workplace norms.
Focus on Core Business Activities
Outsourcing compliance and administrative processes to an EOR Australia Partner allows your internal team to focus on core objectives like sales, customer acquisition, and growth strategy. The EOR ensures legal, payroll, and HR matters are handled in the background, enabling operational efficiency and strategic focus.
Visa Types in Australia
Asanify simplifies workforce expansion by offering end-to-end assistance with Australian visa applications and work permits. Our expert team helps ensure full compliance with immigration law, from document preparation to employer sponsorship obligations. We manage end-to-end processes so you can focus on business priorities.
Visa Application Process:
Foreign nationals looking to work in Australia must apply for the appropriate work visa, most commonly the Temporary Skill Shortage (TSS) Subclass 482 visa. The process begins with securing a job offer from an Australian business that is an approved sponsor. The employer submits a nomination application, while the employee submits a visa application with supporting documentation—such as proof of qualifications, identity documents, and job description. Once granted, the visa allows the individual to live and work in Australia for up to four years.
Work Permit (TSS Visa) Requirements:
The TSS visa has specific requirements:
- A valid passport with at least six months’ validity
- A job offer from an approved Australian sponsor
- The nominated occupation must appear on the Skilled Occupation List
- Evidence of skills, experience, and English language proficiency
- Labor Market Testing by the employer, proving that local recruitment was attempted
Employers must also demonstrate financial viability and compliance with workplace laws. Visa duration is typically 2–4 years, with renewal or permanent residency options depending on the role and pathway.
Foreigner Registration:
Australia does not require foreign employees to register with local authorities upon arrival. However, all employees must apply for a Tax File Number (TFN) and enroll in superannuation through a nominated fund. Employers must also report employee wages and superannuation to the Australian Taxation Office (ATO) via Single Touch Payroll (STP). EOR partners manage these formalities, ensuring foreign employees are legally set up to work in Australia.
Risks or Drawbacks of EOR Australia
1. Limited Control
One of the main drawbacks of using an EOR in Australia is the limited control over the employees’ day-to-day operations. As the EOR is the legal employer, it handles HR functions, payroll, compliance, and administrative tasks. This may reduce your visibility into performance management and cultural integration, making it harder to align remote employees with your company’s internal workflows and values.
2. Potential Cultural Differences
Australian workplace culture may differ from that of the employer’s home country. While EORs provide guidance on local practices, businesses unfamiliar with Australia may experience misalignments in communication styles, work expectations, or feedback mechanisms. These cultural nuances can impact team cohesion and employee satisfaction if not addressed proactively.
3. Cost
Although EOR Australia services eliminate the need to establish a local entity, the per-employee service fee can still be a substantial investment—especially for companies with only a small team. Businesses should evaluate whether the benefits of outsourcing HR, payroll, and compliance outweigh the added cost compared to internal handling or alternative models like PEOs or direct hiring.
4. Data Security and Confidentiality
Since EORs handle sensitive employee and company data—including salaries, tax IDs, and employment records—data privacy becomes a key concern. While most EORs comply with Australia’s Privacy Act and Australian Privacy Principles (APPs), it’s essential to confirm the provider’s security protocols to avoid breaches, especially when processing payroll and employee records.
5. Scalability Challenges
EOR services are generally scalable, but some providers may face challenges when rapid expansion occurs—such as onboarding dozens of employees across multiple states. If not well-equipped, the EOR may experience delays or inconsistencies in service delivery, compliance management, or payroll accuracy. Confirm the provider’s scalability in advance to support growth smoothly.
6. Communication Challenges
Despite shared language, communication with EOR providers can face delays due to time zones, misaligned expectations, or inconsistent service standards. Without proactive communication protocols, misunderstandings may arise in HR handling, employee concerns, or policy interpretation. Ongoing collaboration and clear escalation paths are vital for alignment.
How Does Employer of Record Australia (EOR) Services Differ From Usual HR Software?
1. Employer of Record (EOR)
An Employer of Record (EOR) in Australia is a third-party provider that acts as the legal employer for your workforce. It manages payroll, superannuation, tax compliance (PAYG), contracts, employee entitlements, and terminations according to the Fair Work Act. This model is ideal for companies hiring in Australia without establishing a local legal entity, ensuring compliance with local regulations and simplifying workforce management.
Key responsibilities of an EOR include:
- Payroll processing and tax withholding
- Drafting and issuing compliant employment contracts
- Managing superannuation and leave entitlements
- Ensuring adherence to National Employment Standards (NES)
- Handling legal liability and HR documentation
EOR services in Australia provide the legal framework and operational infrastructure to hire employees quickly and compliantly.
2. HR Software
HR software streamlines internal HR tasks such as time tracking, recruitment, training, and performance reviews. It is a tech solution rather than a legal employment structure. HR software does not handle legal employment responsibilities such as payroll tax compliance, superannuation obligations, or termination liability in Australia.
Key features of HR software include:
- Employee data and time-off tracking
- Recruitment and applicant tracking
- Performance and training modules
- Automated reporting and workflow tools
While HR software improves efficiency, it cannot replace the legal, compliance, and risk mitigation functions that an EOR provides—especially for foreign businesses without an Australian legal entity.
How Much Does It Cost to Avail Services Under EOR Australia?
Scope of Services
EOR pricing in Australia varies by the breadth of services. Some companies may require only payroll and tax handling, while others opt for comprehensive support including recruitment, onboarding, leave tracking, and performance administration. Broader service packages will generally result in higher fees.
Employee Strength
Costs are often calculated on a per-employee-per-month (PEPM) basis. Pricing may vary depending on the number of employees onboarded, with some EORs offering volume discounts for larger teams. For small headcounts, the per-person cost may be proportionally higher due to fixed administrative overhead.
Complexity of Employment Regulations
Australia’s regulatory environment includes modern awards, industry-specific wage standards, and collective agreements. Navigating these complexities may require custom compliance efforts by the EOR, which can increase service costs—particularly in regulated sectors like healthcare, education, or construction.
Customization and Additional Services
Some EORs offer add-ons such as tailored benefit plans, equity distribution, relocation support, and advanced leave tracking. These customizations, while beneficial, contribute to higher service fees. Businesses must assess whether such additions provide a meaningful ROI in the Australian context.
Technology Infrastructure
EORs with robust tech platforms offer secure digital portals for payroll, employee data, and reporting. While these platforms enhance accuracy and visibility, they may come at a premium. The cost is typically justified by efficiency gains and compliance accuracy.
Pricing Models and Contract Terms
Most EOR Australia providers offer flexible pricing: per-employee, flat monthly packages, or usage-based billing. Longer-term contracts may offer cost savings, while short-term or project-based engagements can carry premium fees. Always review SLAs, exit clauses, and one-time setup costs before committing.
Conclusion: EOR Australia
The Employer of Record (EOR) Australia model offers a powerful solution for businesses seeking to expand into Australia without establishing a local subsidiary. It enables rapid market entry, ensures full compliance with employment laws, and reduces legal and administrative burdens.
For global companies entering Australia, partnering with an EOR provides end-to-end support for hiring, payroll, benefits, taxes, and termination—allowing leadership teams to focus on business strategy and operations. From mitigating regulatory risk to offering a cost-effective growth path, EOR Australia is a modern, scalable approach to workforce management in a competitive labor market.
FAQs
How does an Employer of Record ensure compliance with local labor laws in Australia?
An Employer of Record (EOR) ensures compliance with Australian labor laws by managing payroll, superannuation, PAYG tax, employee benefits, and employment contracts under the Fair Work Act.
What are some key Australian labor laws that an EOR helps navigate?
An EOR helps navigate key Australian labor laws including the Fair Work Act 2009, Superannuation Guarantee laws, National Employment Standards (NES), and local state-based payroll tax regulations.
How does an EOR act as the legal employer for a company’s workforce in Australia?
An EOR becomes the legal employer by taking on all employment responsibilities such as hiring, payroll, superannuation, taxation, and compliance, while the client company retains operational control over day-to-day work.
What are the benefits of using an Employer of Record in Australia?
Using an EOR in Australia allows companies to hire quickly, stay compliant with labor regulations, reduce administrative burdens, and operate without setting up a local legal entity.
How does an EOR help companies comply with Australian employment laws when hiring international employees?
An EOR ensures compliance by handling employment contracts, salary structures, visa coordination, tax withholdings, and contributions like superannuation for foreign nationals hired in Australia.
Is EOR legal in Australia?
Yes, EOR services are legal in Australia and operate in full compliance with national and state employment laws, ensuring that both the employee and employer obligations are met.
Can an EOR help manage employment contracts for a company’s remote workers in Australia?
Yes, an EOR can create and manage legally compliant employment contracts for remote workers in Australia, covering leave entitlements, superannuation, and termination clauses.
What are the benefits and challenges of hiring in Australia?
Benefits include access to a skilled and English-speaking workforce, a stable legal environment, and strong labor protections. Challenges include award interpretations, payroll tax variations, and navigating strict compliance frameworks.
How does an EOR support companies in providing employee benefits to their Australian workers?
An EOR ensures that employees receive statutory benefits like superannuation, paid leave, and public holidays while helping clients offer optional benefits like health insurance or bonuses.
Does EOR have a platform and what features does it include?
Yes, EOR platforms typically include features like automated payroll, compliance tracking, leave and benefits management, employee self-service portals, and real-time reporting.
How much does an EOR cost in Australia?
EOR costs in Australia vary based on service scope, number of employees, and level of customization. Pricing generally includes onboarding fees, monthly per-employee charges, and any added service costs.
Which is the best Employer of Record service in Australia?
The best EOR provider depends on your business needs. Providers like Asanify, Deel, and Remote offer comprehensive solutions, with Asanify known for strong payroll accuracy and regulatory compliance.
What is the difference between EOR and PEO?
An EOR becomes the legal employer and assumes full compliance responsibilities. A PEO enters a co-employment arrangement, sharing HR responsibilities while requiring the client to be a registered business locally.
What are the advantages of partnering with an EOR for legal compliance when managing a global workforce?
Partnering with an EOR ensures full compliance with local labor laws, reduces risk of non-compliance, simplifies hiring across regions, and speeds up onboarding without setting up entities.
Is there a minimum or maximum number of employees I can onboard using Asanify?
Asanify’s EOR model is flexible, allowing you to onboard any number of employees—from a single hire to a full team—scaling with your business needs in the Australian market.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.