EOR for Australia
Employer of Record in Australia
Employ staff in Australia without setting up a local company. Fair Work-compliant contracts, superannuation under the Payday Super rules, Single Touch Payroll reporting, state payroll tax and workers' compensation, run by a named account team.
Last reviewed
The short answer
A company can employ staff in Australia without setting up a local company by using an Employer of Record, because Australian payroll obligations attach to a locally registered employer from the first pay run.
Employment runs federally under the Fair Work Act 2009, but the cost does not sit in one place: payroll tax, workers' compensation and long service leave are set separately by each state and territory, while superannuation, leave, notice and redundancy are national.
Aspirock Australia supports deployments into every state and territory, covering employment contracts and award interpretation, superannuation under the Payday Super rules, Single Touch Payroll reporting, payroll tax registration where the work is performed and workers' compensation cover.
Worth knowing
Three things worth knowing
The superannuation cap became annual on 1 July 2026, adding $2,499.60 a year for every employee earning $270,830 or more
Until 1 July 2026 employer superannuation was capped at $62,500 of earnings a quarter, which is $250,000 across the year and $30,000 of contributions at 12%. The cap is now a single annual figure of $270,830 and 12% of that is $32,499.60. For every employee whose qualifying earnings reach $270,830 the employer pays $2,499.60 a year more than the old cap produced and a cost model built on the quarterly figure will understate the bill for every one of them.
The super guarantee charge became tax deductible and the penalty on top now depends on what is still unpaid when the notice period ends
The charge for paying superannuation late was non-deductible for most of its life. From 1 July 2026 it is deductible and the penalty on top no longer runs on the size of the charge: it is a percentage of whatever is still unpaid when the ATO's notice payment period ends, set at 25% or 50%, with a nil case in exceptional circumstances. The exposure moved from occasional and large to frequent and small, and from a size problem to a monitoring one. The charge is assessed by the ATO automatically instead of self-reported, it bites at seven business days rather than 28 days after quarter end and its interest compounds daily, so exposure builds for an employer that is not watching ATO notices.
Payroll tax thresholds are apportioned against Australia-wide wages, so a large group can be taxed from nearly the first dollar
This is what makes the cost of an Australian hire unanswerable as a single number. Each state and territory sets its own rate and its own tax-free threshold, but the threshold is not a fresh allowance at each border: every jurisdiction apportions it against the group's total Australian wages. A group with $50m of Australian wages that puts $150,000 of salary into New South Wales gets a threshold there of $3,600 rather than $1,200,000, so almost the whole salary is taxable from the first pay run while a standalone local business paying exactly the same salary pays nothing. In Queensland, South Australia, the Australian Capital Territory and the Northern Territory the rate itself moves with Australia-wide wages as well.
Reference
Employment terms in Australia
How do you employ someone in Australia without setting up a company?
An Employer of Record that already holds an Australian entity can employ the person without the hiring company setting up one of its own. The payroll obligations attach from the first pay run either way and an EOR is already registered to meet them.
Single Touch Payroll reporting is due to the Australian Taxation Office each time staff are paid, superannuation must reach the employee's fund within seven business days of payday and workers' compensation has to be registered against deadlines that each state scheme sets for itself. Whichever entity employs the person carries all of them.
The practical choice is between registering an Australian entity and taking on the full stack of tax and payroll registrations, and engaging an Employer of Record that already holds one. The choice turns on speed, headcount and whether a permanent local trading presence is actually wanted and the comparison of an EOR against an Australian subsidiary sets out the cost, time and control trade-offs in full.
What does an employer actually pay for in Australia?
The employer cost of an Australian hire is salary, superannuation at 12% of qualifying earnings, payroll tax where the state threshold is crossed, workers' compensation premium and accruing leave and termination entitlements.
Payroll tax, workers' compensation and long service leave are set by the state where the work is performed, while superannuation and the leave and termination entitlements are set nationally. PAYG withholding, though administered nationally, comes out of the employee's pay rather than being added on top by the employer.
| Obligation | Set by | Varies by state |
|---|---|---|
| Superannuation | Federal, via the ATO | No |
| PAYG withholding and STP reporting | Federal, via the ATO | No |
| Minimum wage, leave and notice | Federal, via the Fair Work Act | No |
| Payroll tax | Each state and territory | Yes, standard rates 4% to 8.75% |
| Workers' compensation | Each state and territory scheme | Yes, industry-rated |
| Long service leave | Each state and territory | Yes |
| Public holidays | Eight days federally, more by state and territory | Yes |
The practical effect is that the same salary produces a different employer cost in Sydney, Melbourne and Perth, and a workforce split across three states is administered against three revenue offices, three workers' compensation schemes and three holiday calendars. The full cost breakdown by state works through what that adds up to.
What changed for employers on 1 July 2026?
Changes took effect on 1 July 2026 and anything written before that date describes a position that no longer applies.
Superannuation became a per-payday obligation
Payday Super replaced the quarterly cycle. Superannuation must now be paid on every payday and reach the employee's fund within seven business days, against 28 days after the end of a quarter previously. The base was redefined at the same time, from ordinary time earnings to qualifying earnings, which pulls directors' fees and labour-only contract payments in alongside commissions and salary sacrifice. Commissions and salary sacrifice were already counted, so for most employees the number is unchanged. The Small Business Superannuation Clearing House, which many small businesses used to remit contributions, closed completely on 30 June 2026.
The superannuation cap became annual
The maximum contribution base stopped being $62,500 a quarter and became $270,830 for the year, capping employer superannuation at $32,499.60.
The penalty for paying late was rebuilt
The superannuation guarantee charge is now assessed by the ATO rather than self-reported, is calculated on qualifying earnings and carries interest that compounds daily. It also became tax deductible, having been non-deductible for most of its life and the penalty on top no longer runs on the size of the charge: it is 25% or 50% of whatever is still unpaid when the notice payment period ends. The deterrent moved from size to frequency.
Two jurisdictions recut payroll tax
The ACT dropped its threshold from $2m to $1.75m and moved to five bands rising to 8.75% above $150m. The Northern Territory introduced a 6.5% rate for employers and groups with Australia-wide wages of $100m or more.
The National Minimum Wage moved on the same date, to $26.44 an hour or $1,004.90 a week, with modern award minimums rising by 4.75% following the 2026 Annual Wage Review. Most employees are covered by an award or registered agreement that sets a higher floor than the National Minimum Wage, so that floor is usually the number that matters. Identifying the correct award and classification for each role matters because getting it wrong underpays every pay run that follows rather than just the first. Since 1 January 2025 intentional underpayment of wages, leave or superannuation has been a criminal offence and for a company the maximum penalty is the greater of three times the underpayment or $9.1m.
How does payroll tax work across the states?
Payroll tax is levied by each state and territory where work is performed, with thresholds from $1m to $2.5m and standard rates from 4% to 8.75%, but every jurisdiction apportions that threshold against the group's total Australian wages.
That second half is the part that catches foreign employers and it is missing from most published guidance. The threshold is not a per-state allowance that resets at each border. A company that already has Australian operations, or that belongs to a group that does, can find its first hire in a new state taxed from nearly the first dollar, while a standalone local business paying the same salary pays nothing at all. Grouping provisions pull related entities together for this purpose whether or not they trade with each other.
Two jurisdictions also charge above the ordinary rate. Victoria applies two surcharges that together add 1% above $10m and 2% above $100m and Queensland's mental health levy adds 0.25% above $10m and a further 0.5% above $100m. Western Australia works differently again: its $1m threshold does not simply apply or not apply, it phases out gradually between $1m and $7.5m of Australian taxable wages, so the effective rate climbs across that band rather than stepping.
What is different about deploying a project workforce?
Placing workers on a client's site is labour hire unless a scheme exemption applies and that changes the licensing and visa position rather than just the paperwork.
Labour hire licences are required in Queensland, Victoria, South Australia and the ACT, and a licence in one jurisdiction does not authorise activity in another. New South Wales, Western Australia, Tasmania and the Northern Territory have no general scheme, which means a crew rotating across state lines can move in and out of licensing coverage during a single project. Engaging an unlicensed provider is itself an offence in the licensed states, so the exposure sits with the host as well as the supplier.
The visa position is sharper still. Standard Skills in Demand sponsorship does not permit placing a sponsored worker with an unrelated third-party host. That requires an On-Hire Industry Labour Agreement, with contractual arrangements between the sponsor, the worker and the host. A sponsorship arrangement that works perfectly for an office hire simply does not cover a worker deployed to a client site and finding that out after mobilisation has started is expensive.
For resources, energy and construction deployments specifically, including the fly-in fly-out payroll tax complication and the mobilisation timeline, see mobilising a project workforce in Australia without a local entity. For ordinary hiring timelines and the registrations that gate a first pay run, see deployment and timelines.
Cost transparency
What does it cost to employ someone in Australia?
Key statutory employer costs in Australia. Employer of Record pricing sits on top of them and is confirmed after a short discovery call, once the role, location and timeline are known.
- Income tax on salary
- Progressive, withheld by the employer
- Employer superannuation
- 12% of qualifying earnings
- Payroll tax
- State-based, standard rates 4% to 8.75%
- Workers' compensation
- Compulsory, state schemes, industry-rated
The provider
About Aspirock
Aspirock is an Employer of Record and payroll provider operating across 70+ countries from six global offices, founded on more than 22 years of operational EOR experience and supporting more than 5,000 workers. Every client works with a named account team that owns the deployment end to end, so contracts, payroll, visas, and compliance filings in each market are handled by people accountable for the outcome.
In Australia, Aspirock Australia provides Employer of Record and payroll services across every state and territory, covering employment contracts and modern award interpretation, superannuation under the Payday Super rules, PAYG withholding and Single Touch Payroll reporting, payroll tax registration where the work is performed and workers' compensation cover. Deployments into the wider Asia Pacific are coordinated by the same account team.
Common questions
Frequently asked questions
Last reviewed
Yes, through an Employer of Record. Australian payroll obligations attach to a locally registered employer from the first pay run and an EOR that already holds an Australian entity becomes the legal employer, issues the employment contract, runs payroll with PAYG withholding and Single Touch Payroll reporting, pays superannuation and holds workers' compensation cover, while the client directs the work day to day. Aspirock Australia provides Employer of Record services for companies with no local presence, with a named account team owning the deployment end to end.
Superannuation is 12% of an employee's qualifying earnings for 2026-27 and 2027-28. Since 1 July 2026 it must be paid on every payday rather than quarterly and the contribution has to reach the employee's fund within seven business days. Qualifying earnings replaced ordinary time earnings on the same date and include all commissions and salary sacrifice contributions. Employer superannuation stops for the year once the employee's qualifying earnings reach $270,830, an annual cap that replaced the previous quarterly one.
Payroll tax is a state and territory tax on wages, not a federal one. Each jurisdiction sets its own rate and tax-free threshold and it is payable where the work is performed, so a company with staff in three states deals with three revenue offices. Thresholds run from $1m in Victoria and Western Australia to $2.5m in the Northern Territory and standard rates from 4% to 8.75%. Every jurisdiction apportions its threshold against the group's total Australian wages rather than giving it in full in each state, which is why an established group can be liable on its first hire.
Workers' compensation is compulsory and is arranged separately in each state or territory where employees usually work. Premiums are set by industry classification and claims history rather than by a single national rate, so a construction employer and a software employer paying identical salaries pay materially different premiums. Victoria's scheme average is 1.8% of rateable remuneration for 2026-27, with a minimum premium of $400 plus GST. New South Wales held its industry classification rates unchanged for the 2026-27 policy period.
For a candidate already in Australia with work rights, employment can begin within days, because the gating items are registrations rather than approvals, among them Single Touch Payroll-enabled reporting, a superannuation route including the stapled fund request to the ATO, workers' compensation cover and payroll tax registration once the threshold is crossed. For a candidate who needs a Skills in Demand visa, the timeline is driven by sponsorship, nomination and visa processing and is measured in months rather than weeks.
It depends on the real substance of the relationship rather than on the label the parties put on it. Section 15AA of the Fair Work Act, in force since 26 August 2024, determines employee status on the practical reality and true nature of the working relationship, taking the contract into account alongside how it is performed. It settles the position under the Fair Work Act only: tax, superannuation, payroll tax and workers' compensation each run their own test and a contractor above the contractor high income threshold who opts out under section 15AB is still caught by those. Superannuation is separately payable for contractors engaged mainly for their labour. Since 1 January 2025 intentional underpayment of wages, leave or superannuation has been a criminal offence. For conduct from 1 July 2026 the maximum for a company is the greater of three times the underpayment or $9.1m.
Only under the right arrangements. Placing a worker with a third-party host is labour hire unless a scheme exemption applies and it requires a licence in Queensland, Victoria, South Australia and the ACT and a licence in one does not authorise activity in another. If the worker is on a sponsored visa, standard subclass 482 sponsorship does not permit placement with an unrelated host; that requires an On-Hire Industry Labour Agreement, with contractual arrangements between sponsor, worker and host. Aspirock deploys project workforces internationally and confirms the licensing and sponsorship position for the specific state and engagement before mobilisation begins.
General guidance on Australia employment rules, reviewed 3 August 2026. Rates and rules change. This is not legal or tax advice for a specific situation.
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