For most companies in the world, hiring in the US runs into a wall around money: currency controls, approval regimes, the struggle to get hard currency across the border. An Australian company has almost none of that to deal with.
The Australian dollar floats freely, the Reserve Bank maintains no exchange controls, and there are no limits on sending money abroad or bringing it home. Australia actively encourages companies to invest overseas. So funding a US presence, if you decide you want one, is a normal banking exercise rather than a regulatory project.
That leaves two real questions. First, do you even need a US company to hire an American, and for most first hires the answer is no. Second, and this is the one that actually takes planning from Australia, how do you work with someone who is asleep for most of your day.
The Money Side Is Not the Problem
Worth stating plainly, because it is the barrier almost everywhere else and simply is not one here.
Australia has no currency controls and no restrictions on moving capital out. The Reserve Bank has the legal power to impose exchange controls but keeps none in place, and the government does not limit remittances. If anything, the policy leans the other way: agencies like Austrade and Export Finance Australia exist partly to help Australian businesses expand abroad.
One point of confusion worth clearing up: the Foreign Investment Review Board, FIRB, screens investment coming into Australia, not Australian money going out. Funding a US subsidiary from Australia does not trigger a FIRB review. You are moving your own capital into your own venture overseas, through ordinary banking.
So the case for using an Employer of Record from Australia is not about sidestepping a capital regime, because there is not one. It is simpler: you do not need a US company at all to put an American on payroll, so there is little reason to build and fund one before you know the market is worth it.
You Do Not Need a US Company to Hire an American
Employing someone in the US means running US payroll, withholding federal and state tax, providing US benefits, and issuing a W-2 at year end. None of that works through an Australian payroll system, and the IRS does not treat an Australian parent as a reason to skip it.
The legal employer, though, does not have to be a company you own. Three routes, and only one involves incorporating.
Using an Employer of Record
An Employer of Record is a US company that employs your hire for you. It runs their payroll, withholds federal and state tax, files with the IRS and the state, enrolls them in health cover and benefits, and holds the legal employment relationship. You direct the work. On paper, the EOR is the employer.
You pay salary, the employer-side taxes, and a per-employee fee. There is no US incorporation, no state registration in your name, and nothing to wind down if the hire or the market does not work out.
This suits a company hiring a handful of people in the US that wants them working within days. It suits you less well once a larger team sits in a single state and the US has become a permanent base, because at that point running your own entity starts to make more economic sense.
The trade-off is that the EOR sits between you and the employment relationship. Contract changes, terminations, and unusual benefits requests all route through them.
Setting Up Your Own US Entity
Here you incorporate, usually a Delaware LLC or C-corp, get an Employer Identification Number, open US banking, register as an employer in every state where someone lives, build payroll, and bring on a US accountant.
For a company used to Australian corporate setup through ASIC, the US incorporation itself will feel familiar, and because there are no capital controls, funding it is straightforward. The cost sits in what comes after: state-by-state registration, multi-state payroll, federal and state filings, and benefits administration, which runs from roughly $5,000 to $40,000 all in depending on how many states you touch, plus obligations that continue indefinitely.
It makes sense when the US is a committed long-term market, your headcount in one state is climbing, and you want full control. If you already run payroll in more than one country, the mechanics will look familiar, though the US multi-state layer is heavier than Australia's single national system.
One thing to rule out early: a US PEO will not do this job. A PEO works on a co-employment basis and assumes you already own the US entity. With no US company, it has nothing to work alongside. An EOR handles the whole thing.
Engaging a Contractor
A contractor arrangement is the fast, cheap route, and it is legitimate when the relationship genuinely is contracting: the person sets their own hours, uses their own equipment, works for other clients, invoices for deliverables, and handles their own taxes. You collect a Form W-9, pay their invoices, and issue a 1099 at year end.
It stops being legitimate when the person is really a full-time employee: working only for you, on your schedule, on your systems, reporting to your manager. Australian companies know this tension well from the sham-contracting provisions in the Fair Work Act, where calling an employee a contractor carries real penalties. The US applies its own version through the IRS and state tests, with California's ABC test treating most full-time workers as employees regardless of the contract. The logic is familiar even if the specific tests differ.
One Country, Fifty Rulebooks
Here is where an Australian company meets something genuinely unfamiliar, despite how much the two countries have in common.
Australia runs a single national workplace system: the Fair Work Act, the National Employment Standards, and modern awards apply across every state and territory. The US works the other way. Employment is regulated at the state level as well as the federal level, and there are fifty states, each with its own rules, layered under federal law.
Your engineer in California works under different tax, wage, overtime, and leave rules than your salesperson in Texas. Add a third person in New York and you are managing three sets of employer registrations, three state tax regimes, three unemployment insurance accounts, and in some states a separate paid-family-leave contribution. There is no national equivalent of the award system to lean on; each state is its own jurisdiction.
Incorporating does not solve this. A Delaware entity makes you a US employer, but it does not register you in the states where your people actually live. You file in each one regardless, which is why a US team that looks small can carry a surprisingly wide compliance load.
What a US Hire Costs
The employer-side numbers will look reasonable to an Australian finance team, with one reversal worth noting.
US employer-side FICA comes to 7.65% of wages: 6.2% for Social Security up to the annual wage cap, and 1.45% for Medicare, with federal unemployment adding a small amount per person. Set that against Australia's superannuation guarantee, now 12% of ordinary earnings paid on top of salary, plus payroll tax and workers' compensation, and the US statutory burden is lighter on the retirement side than what you pay at home.
The reversal is health cover. In Australia, Medicare and the levy handle the baseline, so health is not an employer line the way it is in the US. American professionals expect employer-sponsored health insurance as standard, and for a small team it can be one of the larger costs. An EOR gives you access to group rates an Australian company with a few US employees could not reach alone.
The state layer is where US costs turn variable rather than high. Unemployment insurance carries a different rate and wage base in every state, several states add disability or paid-leave contributions, and workers' compensation is mandatory almost everywhere, priced by role and location.
If you go the EOR route, add the fee. Ours is $579 per employee per month, flat. Some providers hold a deposit worth a month of salary or charge a percentage of payroll, so ask for the full structure rather than the headline number. It also helps to compare what a hire costs across countries before you settle on where a role should sit.
The Time Zone Is the Real Challenge
This is the part that matters most from Australia, and it is worth being honest rather than cheerful about it.
The eastern states run at UTC+10, or UTC+11 in daylight saving, which puts Sydney, Melbourne, and Brisbane roughly fourteen to sixteen hours ahead of US Eastern time and seventeen to eighteen ahead of the West Coast. Perth is further still. For practical purposes, your working day and your US hire's working day barely touch. When Sydney is wrapping up on Tuesday evening, New York is just starting Tuesday morning.
This is a harder gap than companies hiring into the US from Asia face, and far harder than the near-total overlap that companies hiring into the US from Latin America enjoy. The time difference is even greater for teams based in New Zealand. It does not make a US hire a bad idea, plenty of Australian companies run US teams well, but it does make the working model a decision you have to make deliberately rather than stumble into.
In practice, two patterns work. One is a genuinely asynchronous setup, where your US hire owns their work, decisions are written down rather than talked through, and nobody waits on a live conversation to move forward. The other is a narrow, agreed overlap window, often the US morning against the Australian evening, that one or both sides commit to. What does not work is assuming it will sort itself out. The teams that struggle are the ones that treated the time difference as a detail.
What Surprises Australian Employers
At-will employment is a genuine shock. Most US states let either side end the relationship at any time, with no notice period and no severance, and no general unfair-dismissal protection of the kind the Fair Work Act provides. After Australia's system, with its unfair-dismissal regime, notice entitlements, and redundancy pay, US at-will employment can feel almost lawless. If you want notice or protection in a US contract, you write it in; it is not there by default.
No superannuation, but retirement is still expected. There is no US equivalent of the super guarantee. Instead, a 401(k), often with an employer match, is the market norm for professional roles. The obligation is not statutory the way super is, but skipping it will cost you candidates.
No awards, no national minimum framework to lean on. Australia's modern award system, with its classifications and penalty rates, has no US counterpart. Pay, overtime, and conditions are set by a patchwork of federal and state law that varies by location, so you cannot read entitlements off a single national instrument.
A US salesperson can raise a tax question. If someone in the US is signing contracts on your company's behalf, that can create a taxable presence for you there, separate from anything to do with employment, and the Australia-US tax treaty governs how it is handled. Worth raising with your tax adviser before the first big deal rather than after.
A Sequence That Works
Start with an EOR for the first hires. It needs no incorporation and gets someone on payroll within days. Coming from Australia, the reason to start this way is not to avoid a capital regime, since there is not one, but to avoid building and running a US company before the market has earned it. If the US does not work out, you close a service agreement rather than winding down an entity.
Incorporate once the picture is clear: a growing team concentrated in one state, revenue that justifies the compliance overhead, and a firm decision that the US is a permanent market. The open capital account makes funding the entity easy, so the choice comes down to US-side economics rather than whether you can move the money. From there, run the entity for your concentrated team and keep the scattered remote hires on the EOR.
Use contractors only where the work is genuinely independent. Dressing up a full-time role as contracting costs more than it saves the moment a US state, or the IRS, disagrees with the label.
Once you are choosing between providers rather than routes, our rundown of EOR providers operating in the United States compares pricing, onboarding speed, and compliance coverage across twelve platforms.
Frequently Asked Questions
Can an Australian Company Hire a US Employee Without a US Entity?
Yes. An Employer of Record employs the person through its own US entity and takes care of federal and state payroll, tax withholding, benefits, and compliance, while your team directs the work. The alternative is incorporating your own US company, which is easy to fund from Australia because there are no capital controls, but still carries US-side setup cost and ongoing compliance that an EOR avoids.
Does Australia Restrict Sending Money Abroad to Fund a US Company?
No. Australia has no currency controls and does not limit remittances. The Reserve Bank has the power to impose exchange controls but maintains none, and the government encourages outward investment. The Foreign Investment Review Board screens investment coming into Australia, not Australian capital going out, so funding a US subsidiary does not trigger a FIRB review.
Can We Pay a US Employee From Our Australian Payroll?
No. Someone working in the US is employed under US federal and state law, with US tax withholding, FICA, and US benefits. An Australian payroll system cannot produce a W-2 or remit to the IRS, and paying a full-time worker by invoice risks reclassification, back taxes, and penalties in whichever state they live in.
How Much Should We Budget Above Salary for a US Hire?
Employer-side FICA is 7.65%, plus state unemployment and workers' compensation that vary by state. That is lighter on the retirement side than Australia's 12% super guarantee. The cost that reverses is health insurance, which is employer-funded in the US rather than covered by a Medicare-style system, and American candidates expect it. On top of that, budget either an EOR fee or the setup and running cost of a US entity, from around $5,000 to $40,000 depending on how many states you cover.
How Do We Manage the Time Difference With a US Hire?
Deliberately. Eastern Australia sits fourteen to sixteen hours ahead of US Eastern time, so the working days barely overlap. The two models that work are a genuinely asynchronous setup, where decisions are written rather than discussed live, or a fixed overlap window, often the US morning against the Australian evening, that one side commits to. It is the single biggest thing to plan for when hiring in the US from Australia.
Does Our US Hire Need a Visa?
Not if they are a US citizen or already authorized to work in the US and are staying there. You are employing an American where they already live, so no immigration process is involved. Sponsorship only comes up if you relocate someone into the US, which is a separate matter.
