Employer of Record Guide in 

Australia

Annual Leave

• Entitlement: 4 weeks (152 hours) paid annual leave per year
• Shift Workers: 5 weeks (190 hours) for employees working irregular hours
• Accrual: Leave accrues progressively throughout the year
• Payout: Must be paid at ordinary rate plus 17.5% loading (or shift penalties if higher)
• Cash Out: Up to 2 weeks can be cashed out annually with agreement

Personal/Carer's Leave (Sick Leave)

• Entitlement: 10 days (76 hours) paid personal/carer's leave per year
• Accumulation: Unused leave accumulates year to year
• Evidence: Medical certificate may be required for absences over 2 days
• Carer's Leave: Can be used to care for immediate family members

Parental Leave

Paid Parental Leave (Government Scheme):

• Duration: 18 weeks at minimum wage
• Eligibility: Work test requirements apply
• Dad and Partner Pay: 2 weeks additional leave

Unpaid Parental Leave:

• Duration: Up to 12 months (can extend to 24 months with agreement)
• Job Protection: Right to return to same or comparable position
• Shared Leave: Can be shared between parents

Compassionate Leave

• Entitlement: 2 days paid compassionate leave per occasion
• Qualifying Events: Death or life-threatening illness of immediate family
• Additional Leave: Unpaid leave may be available for extended circumstances

Long Service Leave

• Entitlement: Varies by state, typically 8.67 weeks after 10 years
• Accrual: Begins from first day of employment
• Portability: Limited portability between employers in some states

Summary

Termination Types

Summary Dismissal (With Cause):

• No notice required for serious misconduct
• Must involve conduct incompatible with employment
• High burden of proof on employer

Termination Without Cause:

• Requires notice or payment in lieu
• Must be for genuine operational reasons
• Cannot be harsh, unjust, or unreasonable

Notice Period Requirements

Notice periods are based on employee age and length of service:

Additional Week: Employees over 45 with 2+ years of service receive an additional week's notice.

Redundancy Pay

Redundancy pay applies when positions are genuinely redundant:

Unfair Dismissal Protection

Employees with 6+ months service (12 months for small business) can claim unfair dismissal if termination was:

• Harsh, unjust, or unreasonable
• Not for valid reason
• Procedurally unfair

Small Business: Businesses with fewer than 15 employees have different thresholds and protections.

Final Pay Requirements

Final payments must include:

• Outstanding wages
• Accrued annual leave plus 17.5% loading
• Long service leave (if applicable)
• Notice period or payment in lieu

Payment must be made within 7 days of termination or next normal pay period.

National Public Holidays

Australia observes 11 national public holidays:

*Date varies by state

State-Specific Holidays

Each state and territory has additional public holidays:

• Victoria: Melbourne Cup Day, Labour Day
• New South Wales: Bank Holiday, Labour Day
• Queensland: Labour Day, Royal Queensland Show Day
• Western Australia: Western Australia Day, Labour Day

Public Holiday Pay

Working on Public Holidays:

• Full-time/Part-time: Double time plus day off in lieu (if normally rostered)
• Casual: Double time (no day off in lieu)
• Penalty Rates: May apply in hospitality, retail, and other industries

Not Working:

• Full-time and part-time employees receive ordinary pay
• Casual employees receive no payment unless specifically rostered

Substitution

When a public holiday falls on a weekend, it may be observed on the following Monday, depending on state legislation and award provisions.

Required Documents for Employment

Employment Contract:

• Position details and reporting structure
• Salary, benefits, and working arrangements
• Termination clauses and notice periods
• Confidentiality and IP assignment clauses

Tax File Number (TFN):

• Required for tax withholding purposes
• Employee provides TFN declaration form
• Higher tax rates apply without valid TFN

Superannuation Choice:

• Employee can choose super fund
• Default fund applies if no choice made
• Super Guarantee contributions commence immediately

Right to Work Verification

Australian Citizens/Residents:

• Birth certificate or citizenship certificate
• Australian passport

Visa Holders:

• Valid visa with work rights
• VEVO (Visa Entitlement Verification Online) check required
• Ongoing monitoring of visa conditions

Background Checks

Permitted Checks:

• Criminal history (if relevant to role)
• Employment verification
• Qualification verification
• Credit checks (for financial roles)

Privacy Requirements:

• Written consent required
• Must be relevant to position
• Comply with Privacy Act 1988

Workplace Health & Safety

Induction Requirements:

• WHS policies and procedures
• Emergency procedures
• Job-specific safety training
• Personal protective equipment provision

Fair Work Information Statement

Employers must provide the Fair Work Information Statement to all new employees, explaining:

• National Employment Standards
• Modern awards and enterprise agreements
• Right to join unions
• Unfair dismissal protections

Probation Period Setup

• Standard: Up to 6 months probation
• Small Business: Up to 12 months
• Unfair Dismissal: Different thresholds apply during probation
• Performance Management: Clear expectations and review processes

Onboarding Timeline

Worker Classification

Employee vs Contractor Distinction: The Australian Taxation Office and Fair Work Commission use multiple tests:

• Control: Level of direction and supervision
• Integration: How integral to the business
• Economic Reality: Who bears financial risk
• Multiple Factor Test: Considering all circumstances

Risks of Misclassification:

• Superannuation Guarantee penalties
• Payroll tax liabilities
• Workers' compensation issues
• Unfair dismissal claims

Modern Awards & Enterprise Agreements

Modern Awards:

• Industry or occupation-specific minimum standards
• Cover pay rates, penalty rates, allowances
• Override National Employment Standards where more generous

Enterprise Agreements:

• Workplace-specific agreements
• Must pass Better Off Overall Test (BOOT)
• Require Fair Work Commission approval

Workplace Relations

Union Membership:

• Voluntary in most workplaces
• Right to join and participate in union activities
• Protected from discrimination based on union membership

Consultation Requirements:

• Major workplace changes require consultation
• Health and safety representatives
• Redundancy consultation obligations

Cultural Considerations

Work-Life Balance:

• Strong emphasis on personal time
• Flexible working arrangements increasingly common
• "Right to disconnect" discussions ongoing

Diversity & Inclusion:

• Anti-discrimination laws cover extensive protected attributes
• Workplace diversity initiatives widely supported
• Cultural awareness important in multicultural workplaces

Remote Work Framework

Flexible Working Arrangements:

• Right to request flexible work (certain employees)
• WHS obligations extend to home offices
• Equipment and expense considerations
• Performance management adaptations required

Cross-Border Considerations:

• Tax implications for remote workers
• Workers' compensation coverage
• Award and agreement application

What Borderless AI Handles

When you hire through Borderless AI in Australia, we manage:

• Employment contract creation and compliance
• Payroll processing and tax withholding
• Superannuation contributions and reporting
• Workers' compensation insurance
• Fair Work Act compliance monitoring
• Modern award application and updates
• Leave management and accrual tracking
• Termination procedures and final payments