How To Hire And Pay Employees In Australia

Australia is a country with a rich history and culture. It is also one of the most developed countries in the world. The country has a stable economy, which makes it an attractive place for businesses to set up shop. The Australian government has been working hard to make the country more business-friendly by reducing taxes and simplifying regulations. This has made Australia an attractive destination for foreign investors and entrepreneurs alike. 

The Australian labour market is one of the most competitive in the world. The country has a population of 24 million people and a workforce of 12 million. The Australian labour market is also very diverse, with many cultures and languages represented in the workforce. 

However, there are some challenges that come with doing business in Australia as well. For example, the cost of living is high and there are strict labour laws that can make it difficult to hire international employees. Also, Australia has an ageing population, which means that there will be fewer people entering the workforce in coming years. This will put more pressure on employer to find skilled workers either from different global locations, or train their own employees to fill these gaps.

Mandatory

Australian employers are required to offer the following benefits to all full-time employees:

• Medicare
• Personal Leave (dependant on engagement structure)
• Superannuation (dependant on engagement structure)
• Workers Compensation Insurance

Additional

Some employers like to offer additional benefits to improve employee retention and satisfaction.

• Healthcare
• Paid Parental Leave
• Life and Disability Insurance
• Stock Options and Bonus

Healthcare

Whilst Australia does not have a social security system, a Medicare Levy of 2% of taxable income is payable by resident individuals for health services (provided that they qualify for Medicare services). An exemption from the Medicare Levy may apply if the individual is from a country that has not entered into a Reciprocal Health Care Agreement with Australia.

High income resident tax payers who do not have adequate private health insurance may be subject to an additional 1-1.5% Medicare Levy surcharge. High-income taxpayers whose private hospital insurance carries an excess payment amount for which the insured is responsible before the insurance begins to pay) of more than AUD 500 for single individuals or AUD 1,000 for couples or families are also subject to the Medicare Levy surcharge.

Superannuation

Australia also has a compulsory private superannuation (pension) contribution system. Under this system, employers must contribute a minimum percentage of the employee’s ordinary time earnings (OTE) base to a complying superannuation fund for the retirement benefit of its employees. The minimum percentage is currently 10.5% (as of July 2022).

Social Security

There is no Social Security in Australia

Maternity Leave 

Expectant mothers are entitled to 52 weeks of unpaid parental leave, and may also request an additional 52 weeks of leave. Pregnant employees can begin leave up to six weeks before their due date (from week 34 of the pregnancy). Expectant mothers are entitled to 18 weeks of paid leave.

Paternity Leave

Fathers that have workers for 12 months and contributed to social security are entitled to 2 weeks paid paternity leave. They are also entitled to 52 unpaid parental leave - although only 8 weeks can be taken together.

Sickness Leave

Full-time employees are entitled to 10 days of sick or carer’s leave each year. The balance of leave you accrue each year can be carried over into the next year. Part-time employees receive a pro-rata entitlement.

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

• Signed contract
• All payroll and engagement documents

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

Severance

If an employee is made redundant, they are entitled to a payment based on years of continuous service, in accordance with the following schedule:

Annual Leave 

All full time workers in Australia are guaranteed a minimum of 4 week's paid annual leave.

Public Holidays 

Australia has 7 public holidays:

• New Year's Day 
• Australia Day 
• Good Friday 
• Easter Monday 
• Anzac Day 
• Christmas Day 
• Boxing Day 

Minimum Wage 

The national pre-tax minimum wage in Australia is $21.38 per hour ($812.60 per 38 hour weeks). Casual employees covered by the national minimum wage also receive a 'casual loading' of at least 25%.

Working Time and Overtime 

The standard working week in Australia is 38 hours per week (7.6 hours per day), usually worked Monday to Friday.

All time worked beyond 38 hours per week is classed as overtime and, in most cases, attracts a premium of 1.5x the ordinary rate of pay for the first 3 hours and double time thereafter.

Salary Payments

Salary payments in Australia are usually paid in 12 monthly instalments. Employees must be given a payslip within 1 working day of being paid.

Bonus

Employers are not required to provide employees a bonus. Any bonuses offered are at the employer's discretion.

Income Tax

The Australian Individual Income tax ranges from 0% - 45%