How to Hire Employees in Australia: Awards, Payday Super and the Real Cost of a Hire
What a hire in Australia costs once payday super, NSW workers compensation and payroll tax are added, which modern award sets the pay floor, and when an employer of record beats an Australian Pty Ltd for your first team.
By Australia sets pay through awards, and super now runs on payday
A foreign company can register an Australian Pty Ltd, hire through an employer of record, or engage contractors on an ABN. The Pty Ltd needs a director who ordinarily lives in Australia, plus ATO, payroll and workers compensation registrations before the first pay run. For a first team of under ten people, an EOR is usually the right route, because the EOR already reports through Single Touch Payroll and runs payday super from day one.
Statutory cost is lower than in most of Europe: 12% superannuation guarantee, a state workers compensation premium and state payroll tax. Payroll tax starts once the employer’s total Australian wages pass a threshold, A$1.2 million a year in New South Wales. Through an EOR that threshold is almost always passed, because the EOR is the employer and its whole payroll counts, so payroll tax applies even to a single hire. The bigger cost driver is the modern award covering the role, which can add 17.5% leave loading, overtime rates and allowances above the A$26.44 national minimum wage.
Employment terms and working conditions
Four of these six rules moved between January 2025 and July 2026, and payroll set up from older Australian guides gets payday super and the 2026 award rates wrong.
Cost of employing someone in Australia
Through an EOR in New South Wales, cost holds at 20.3% of salary until yearly earnings pass A$270,830, where super stops for the rest of the financial year and the percentage falls.
A$72,000 a year sits about 38% above the national minimum wage, a common graduate figure. Check the award classification first: leave loading or overtime under the award adds cost that this card does not show.
A$108,000 a year is our working figure for a mid-level professional, not an official median. Workers compensation uses the 1.99% NSW scheme average. Nothing caps at this level, so the 20.3% matches the junior card. Payroll tax is in because the EOR’s own NSW payroll is above the A$1.2 million threshold.
A$300,000 a year passes the A$270,830 maximum contribution base, so super stops at A$32,499.60 for the year, shown here as a monthly average. Pay above the high income threshold also needs a written earnings guarantee to take an award-covered role outside the award.
Superannuation guarantee: 12% of qualifying earnings from 1 July 2025, paid with each payday from 1 July 2026, maximum contribution base A$270,830 for 2026-27 (Superannuation Guarantee (Administration) Act 1992; ATO, maximum contributions base). Workers compensation: 1.99% of wages, the NSW nominal insurer’s target collection rate, frozen at 2025-26 levels for 2026-27 and 2027-28 (SIRA). NSW wages for premium purposes include super, so the rate is applied to salary plus super. Office roles usually carry a lower industry rate than this average, so ask the EOR for the rate it applies. Payroll tax: 5.45% on NSW wages above A$1,200,000 a year (Revenue NSW, 2026-27), assessed on the employer’s total Australian payroll. An EOR is the employer and its payroll is almost always above the threshold, so the cards include it on salary plus super, which count as taxable wages. If you hire through your own company and stay below the threshold, take payroll tax off and the cost falls to about 14.2%. Award leave loading (often 17.5% of four weeks’ pay) and state long service leave accruals are not included.
Price your hire, line by line
Pick a country and a salary. Every statutory contribution, ceiling and accrual is applied separately, so the total is close to what a provider will actually invoice.Compare other countries
Costs most calculators leave out
Private health cover, equipment stipend, meal or transport allowance.
Typically $0 to $2,000 depending on provider and country.
Refundable, but it ties up cash. Most providers hold one to two months.
Example. Change any field to make it yours.
Total employer cost, per employee per month
Monthly breakdown
Upfront and one-time costs
EOR or your own entity
Statutory rates current as of . Exchange rates indicative as of . Contribution ceilings, regional variation, employee age and collective agreements all shift the real figure. Use this to build a budget, then validate against a written quote.
Four ways to hire in Australia
The route decides who holds the ABN, PAYG withholding, Single Touch Payroll and workers compensation registrations, and who carries award compliance if a rate is wrong.
Misclassification risk. Since 26 August 2024 the Fair Work Act looks at the whole working relationship, not only the written contract (s.15AA), and the Fair Work Ombudsman prosecutes sham contracting under s.357. Separately, the ATO treats a contractor paid mainly for their labour as an employee for super, so unpaid 12% plus the super guarantee charge can fall due even where the Fair Work test is passed.
Statutory leave and benefits
Leave in Australia builds up as a liability: unused annual leave has no statutory expiry, is paid out on exit, and state long service leave adds two months or more after 7 to 10 years.
National Employment Standards: annual leave Fair Work Act s.87 and payout on termination s.90(2); personal and carer’s leave s.96; compassionate leave s.104; family and domestic violence leave s.106A; public holidays s.115; unpaid parental leave s.70 and s.76. Paid Parental Leave Act 2010, 26 weeks from 1 July 2026 at A$1,004.90 a week. Long service leave: Long Service Leave Act 1955 (NSW), Long Service Leave Act 2018 (Vic), and separate Acts in each other state and territory. Leave loading comes from the award covering the role.
Termination and offboarding
Australia is not at-will: the employer’s headcount, with associated entities included, decides whether redundancy pay applies and how long before unfair dismissal claims open, and through an EOR you are never the small employer.
Notice: Fair Work Act s.117, 1 week up to 1 year of service, 2 weeks to 3 years, 3 weeks to 5 years, 4 weeks after 5 years, plus 1 week for employees over 45 with 2 years’ service; pay in lieu is allowed. Awards may require employee notice too. Redundancy pay: s.119, with the small business exemption in s.121 and exclusions for casuals and genuine fixed-term contracts in s.123. Unfair dismissal: s.382 to s.385 and s.392; the compensation cap is the lower of 26 weeks’ pay and A$95,050 for dismissals from 1 July 2026. Mass redundancy notice: s.530. Long service leave is paid out under the state Act, after 5 to 7 years’ service in some cases. Final pay, including unused annual leave, is due within 7 days of termination under most awards. The genuine redundancy tax-free amount for 2026-27 is A$13,598 plus A$6,801 per completed year of service.
Work permits and foreign hires
Anyone who is not an Australian citizen or permanent resident, or a New Zealand citizen, needs a visa with work rights, and an EOR can only sponsor if it holds approved sponsor status and does not on-hire the worker without a labour agreement.
From decision to first payroll in 4 weeks
Through an EOR, the award check and contract take the first two weeks, and super onboarding has to be finished before the first payday because contributions now follow every pay run.
Find the award
Match the role’s duties to a modern award and classification with the Fair Work Ombudsman’s Find my award tool. Set salary above the award rate, and above the Core Skills threshold if the hire needs a 482.
Choose the EOR
Compare written quotes on fee, deposit and payroll tax pass-through. Ask which award and classification the EOR will apply, and which state workers compensation policy covers the employee’s home state.
Issue the contract
The EOR issues the contract naming the award, classification and NES terms, with the Fair Work Information Statement. Check work rights on VEVO, and set any annualised salary clause against award overtime.
Collect onboarding forms
The employee completes a TFN declaration and super choice form, or the EOR requests their stapled fund from the ATO. Collect bank details and confirm the start date in Single Touch Payroll.
Run first payroll
Pay salary, send the payslip within one working day and report through Single Touch Payroll on payday. The first super contribution must reach the fund within 20 business days, then 7 every payday.
Best EOR providers in Australia
Four providers we have reviewed that employ in Australia. Full scoring and the ranked list sit on the Australia EOR page.
Formerly Velocity Global, with the lowest published starting price of the four at $399 a month. Get the Australian quote in writing and ask whether your hire sits on a Pebl-owned entity.
Widest product set of the four, with contractor management and payroll in one account. Ask whether its Australian quote includes NSW payroll tax and how large the deposit is.
Published rate of $459 on annual billing, or $499 month to month. Confirm which award classification it applies before signing, since underpayment risk sits with the EOR.
Payroll-led platform suited to companies already running payroll in several countries. Ask whether the Australian employer is Papaya’s own entity or a local partner.
Some links are referral links. We may earn a fee if you sign up, at no cost to you. It never changes our rankings.
All guides for hiring in Australia
Hiring guides for other countries
Compare employer costs, dismissal rules and EOR options in 14 more countries. Each guide is checked against official sources.
FranceHiring guide, 41.5% employer cost
GermanyHiring guide, 22.5% employer cost
NetherlandsHiring guide, 27.4% employer cost
SpainHiring guide, 54.2% employer cost
United KingdomHiring guide, 15.9% employer cost
IndiaHiring guide, 5.7% employer cost
PhilippinesHiring guide, 17.1% employer cost
SingaporeHiring guide, 17.2% employer cost
TaiwanHiring guide, 17.1% employer cost
Questions employers ask about hiring in Australia
Most Australian payroll errors come from guidance written before payday super and the 2026 award increase, so these answers focus on what changed and what an EOR changes.
Is the national minimum wage what I have to pay in Australia?
Usually not. The A$26.44 an hour national minimum wage only applies to award-free employees. Most roles fall under one of more than 100 modern awards, which set a higher rate for each classification, plus overtime, penalty rates and often 17.5% leave loading. Award rates rose 4.75% on 1 July 2026. Coverage depends on the duties, not the job title, so check the role in the Fair Work Ombudsman’s award tool. Senior staff can sit outside the award only with a written guarantee of earnings above the A$190,100 high income threshold.
Can I still pay superannuation quarterly?
No. Payday super started on 1 July 2026, and the 12% superannuation guarantee must now reach the employee’s fund within 7 business days of each payday. The only extra time is for a new starter’s first contribution, which has 20 business days. Guides written before mid-2026 still describe the 28-day quarterly deadline, and quarterly payment now triggers the super guarantee charge. When we checked the ATO’s payday super pages in October 2026, super was also calculated on qualifying earnings, which include salary-sacrificed amounts, not ordinary time earnings.
Is there a salary cap on super contributions?
Yes, but it is now annual. For 2026-27 the maximum contribution base is A$270,830 of qualifying earnings, so the most an employer must pay is A$32,499.60 for the year. Once an employee’s year-to-date earnings pass the cap, super stops until 1 July. The old quarterly cap of A$62,500 no longer applies. An award, enterprise agreement or contract that promises super on full salary overrides the cap, so read senior offer letters before relying on it. The senior cost card above applies the cap.
Does state payroll tax apply to my first hire?
Through an EOR, almost always yes. Payroll tax is assessed on the employer’s total Australian payroll, and the EOR is the employer, so its whole payroll counts and is nearly always above the threshold. That is why our NSW cost cards include 5.45%. If you employ through your own company, tax only starts above an annual wages threshold, A$1.2 million in New South Wales, A$1 million in Victoria and A$1.3 million in Queensland, so one or two hires sit well below it. Ask for the line in writing and compare it with the state rates on our employer payroll tax rates tool.
Do the small business exemptions apply if I hire through an EOR?
No. The exemptions depend on the legal employer having fewer than 15 employees, and an EOR is the legal employer with its whole headcount. Your employee therefore gets redundancy pay of 4 to 16 weeks after a year of service and can bring an unfair dismissal claim after 6 months, not 12. The Small Business Fair Dismissal Code does not apply either. Budget for these from day one, and check how the EOR contract passes redundancy pay and any settlement costs back to you.
Can I pay a contractor on an ABN and skip super?
Not if they are paid mainly for their own labour. Under the Superannuation Guarantee (Administration) Act, a contractor paid wholly or principally for labour is an employee for super purposes, even when they hold an ABN and invoice you. Missed contributions bring the super guarantee charge, which adds interest and an administration fee. For Fair Work purposes the whole-of-relationship test has applied since 26 August 2024, so a long contract does not settle the question. See our guide to misclassification costs.
Can an EOR sponsor a Skills in Demand visa?
Sometimes, and many do not. The EOR must be an approved standard business sponsor, and a standard sponsor cannot place a sponsored worker with an unrelated client unless it holds a labour agreement. The sponsor pays the Skilling Australians Fund levy and must pay at least the market rate and the income threshold for the stream. From 1 July 2026 the Core Skills threshold is A$79,423 and the Specialist Skills threshold is A$146,576, indexed each year, so check Home Affairs before setting salary. Read whether an EOR can sponsor a work visa.
Are non-compete clauses still enforceable in Australia?
For now, only where a court finds them reasonable, and a ban is coming. Treasury released an exposure draft in September 2026 that would void non-compete terms for employees earning up to the A$190,100 high income threshold, and ban co-worker non-solicitation clauses for everyone. Consultation closed on 2 October 2026. The bill has not yet passed Parliament, and the government has signalled a 2027 start. NSW courts can already read down cascading restraints under the Restraints of Trade Act 1976. Draft new contracts on the assumption that only confidentiality and client clauses will survive.
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