EOR Australia: Employer of Record Services to Hire Without a Local Entity
EOR Australia (Employer of Record Australia) is a locally registered Australian company — a Proprietary Limited (Pty Ltd) — that legally employs your staff on your behalf, so you can hire employees in Australia without setting up your own entity. AYP becomes the legal employer of record for your hires: we issue the Australian employment contract, run payroll, pay the 12% Superannuation Guarantee, handle PAYG withholding for the Australian Taxation Office, register and pay state-based payroll tax and workers’ compensation, sponsor work visas through the Department of Home Affairs, and keep you compliant with the Fair Work Act, the National Employment Standards and the Modern Awards system. You direct the work; we carry the employment. You hire in days instead of the weeks it takes to incorporate a Pty Ltd.
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Introduction
An Employer of Record in Australia is a locally registered Australian company that legally employs workers on your behalf. You choose who to hire, set the salary, and manage the team day to day. The EOR takes on everything that legally has to sit with an Australian employer: the employment contract, payroll, the 12% Superannuation Guarantee, PAYG withholding, state-based payroll tax and workers’ compensation insurance, Single Touch Payroll reporting, work visa sponsorship through the Department of Home Affairs, and compliance with the Fair Work Act, the National Employment Standards (NES) and any applicable Modern Award.
The result: you build an Australia team in days, not the weeks it takes to incorporate a Pty Ltd with ASIC and register for payroll tax in every state you employ in. EOR Australia suits companies hiring their first 1–10 employees, businesses testing the market before committing to an entity, and companies with remote workers spread across several states who want to avoid registering for payroll tax in each one.
What’s New for EOR Australia in 2026
The Superannuation Guarantee reached its final legislated rate of 12% of ordinary time earnings in July 2025 — so 2026 is the first full period at the top rate. The bigger 2026 change is Payday Super, which takes effect on 1 July 2026: employers must pay superannuation at the same time as wages, rather than quarterly, with super reaching the employee’s fund within seven days of payday. The National Minimum Wage rose 3.5% to A$24.95/hour. Skilled-visa income thresholds also rise from 1 July 2026 — the Core Skills Income Threshold moves to A$79,499 and the Specialist Skills threshold to A$146,717. An Employer of Record applies each of these automatically.
Quick Facts: Hiring in Australia (2026)
Employer of Record (EOR) Australia 2026
Who Uses an EOR in Australia?
Companies that hire through an Employer of Record in Australia usually fall into three groups. The first is overseas firms — US, UK, EU and Asian companies — placing their first sales lead, country manager or engineering team in Sydney, Melbourne or Brisbane. The second is companies with remote staff spread across several Australian states, who want to avoid registering for payroll tax and workers’ compensation in each one separately. The third is businesses testing the Australian market before committing to a Pty Ltd. A note on terminology: the co-employment “PEO” model common in the United States does not exist as a formal structure in Australia — the Employer of Record is the standard way foreign companies hire locally without an entity.
EOR Australia vs. Setting Up a Local Entity
For small teams, teams whose remote workers are spread across states, or companies testing the Australian market, EOR Australia is the faster and lower-risk route. If you are building a long-term Australian operation with a physical office and local clients, a Pty Ltd eventually makes commercial sense. Many AYP clients start with EOR and incorporate later — and when they do, employees can transfer to the new entity with continuous service preserved. For companies that already have an Australian entity and only need HR and payroll run for them, see our Professional Employer Organisation (PEO) services.
Industries Hiring Through EOR Australia in 2026
Mining and resources. Foreign mining, energy and engineering-services firms place project geologists, commercial leads and technical specialists on fixed-term, site-tied contracts — without the cost of a full Pty Ltd for a short-dated project.
Technology and SaaS. Global SaaS, cybersecurity and AI companies use Sydney, Melbourne and Brisbane as their APAC launchpad, placing lean country teams without incorporating.
Financial services and fintech. Banks, asset managers and payment platforms hire compliance, risk and product staff ahead of AFSL licensing decisions, keeping key hires on payroll before an entity is operating.
Healthcare and life sciences. Pharma, medical-device and clinical-research firms hire specialist clinical, regulatory and medical-affairs staff tied to TGA submissions or trial timelines.
Professional services and consulting. Global consulting and agency firms place senior partners and practice leads to serve Australian clients while keeping optionality on whether to incorporate.
Employment Landscape
Market Overview (2026)
Australia is Asia-Pacific’s most mature and institutionally stable employment market — a high-skill, English-language talent base in a transparent regulatory environment. The 2026 themes are steady growth, continued demand in mining, technology and financial services, and the operational shift to Payday Super. GDP growth is projected at around 2.1–2.3%. The combination of a strong rule-of-law framework and a deep professional talent pool makes Australia a natural APAC base for foreign companies — and an EOR is the fastest compliant way to hire there.
Where You’ll Be Hiring
Sydney (NSW). Australia’s largest commercial centre — finance, technology, professional services and corporate headquarters.
Melbourne (VIC). A close second — technology, professional services, healthcare and a strong startup base.
Brisbane (QLD). Growing fast in technology, resources services and infrastructure.
Perth (WA). The hub for mining, resources and energy.
Adelaide and Canberra. Adelaide is strong in defence and advanced manufacturing; Canberra in government and public-sector-adjacent roles.
Why Companies Use EOR Australia as an Entry Point
Australia’s employment framework is detailed — the Fair Work Act, the National Employment Standards, more than 100 Modern Awards, and payroll tax and workers’ compensation set separately by each state. Foreign companies use EOR Australia to start hiring immediately, place staff across multiple states without registering in each one, and prove the market before deciding whether to incorporate. The EOR holds the employment relationship, runs payroll and superannuation, and sponsors visas. Many companies pair EOR Australia with EOR Singapore, EOR Japan and the rest of AYP’s Employer of Record coverage under one contract.
Laws & Compliance
Australian employment is governed primarily by the Fair Work Act 2009, which sets the National Employment Standards (NES) — the statutory minimum entitlements — and underpins the Modern Awards system, where more than 100 industry and occupation awards set minimum pay rates and conditions above the National Minimum Wage. The system is administered by the Fair Work Ombudsman and the Fair Work Commission. Superannuation and PAYG withholding run through the Australian Taxation Office. Payroll tax and workers’ compensation are set by each state and territory. Company registration sits with ASIC, and work visas with the Department of Home Affairs.
Critical Compliance Framework (2026)
Common Mistakes Foreign Employers Make in Australia
Missing the Modern Award. Most Australian employees are covered by one of 100-plus Modern Awards, which set pay, penalty rates and allowances above the National Minimum Wage. Paying only the NMW to an award-covered employee is a breach.
Treating payroll tax as national. Payroll tax is set and collected by each state and territory, each with its own rate and threshold. A company employing across several states must register in each one — unless it hires through an EOR.
Underestimating Payday Super. From 1 July 2026, superannuation must be paid alongside wages, not quarterly. Payroll processes built around quarterly super need to change.
Misclassifying employees as contractors. Australian law and the courts look at the substance of the relationship. A misclassified contractor can trigger back-payment of superannuation, leave and PAYG.
Overlooking continuous service on transfer. When employees move from an EOR to a new Pty Ltd, their service should carry over so leave accruals and entitlements are not reset.
What an EOR Australia Partner Is Legally Responsible For
When AYP is the Employer of Record in Australia, AYP carries direct responsibility for: the Australian employment contract; payroll; the 12% Superannuation Guarantee and, from 1 July 2026, Payday Super timing; PAYG withholding and Single Touch Payroll reporting; state-based payroll tax and workers’ compensation insurance; correct Modern Award classification and penalty rates; the National Employment Standards entitlements; work visa sponsorship under Standard Business Sponsorship; record retention; response to any Fair Work review; and conduct of any termination in line with the Fair Work Act. Your company directs the work and pays AYP a monthly fee.
Payroll & tax
Australian payroll runs through superannuation, PAYG withholding and state-based employer taxes. The 12% Superannuation Guarantee and PAYG income tax withholding are reported to the Australian Taxation Office through Single Touch Payroll. Payroll tax and workers’ compensation insurance are set separately by each state and territory. An Employer of Record registers your workforce with every relevant body, in every state you employ in. If you already have an Australian entity and only need payroll run for you, see our Asia Payroll service.
Employer Costs Summary (2026)
Superannuation, PAYG and State Taxes Explained
Superannuation Guarantee. Australia’s compulsory retirement contribution, paid by the employer into the employee’s chosen super fund at 12% of ordinary time earnings. From 1 July 2026, “Payday Super” requires it to be paid at the same time as wages rather than quarterly.
PAYG withholding. Pay As You Go is the system through which the employer withholds income tax from each pay run and remits it to the ATO, reported in real time through Single Touch Payroll.
Payroll tax. A state-based tax on total wages, charged once an employer’s wage bill passes that state’s threshold. Each state sets its own rate and threshold, which is why employers with staff across multiple states must register in each — or hire through an EOR that already has.
Workers’ compensation. Mandatory insurance covering work-related injury and illness, arranged state by state at a rate set by the industry’s risk profile.
Personal Income Tax (PIT) Rates
Australia’s personal income tax is progressive, with a tax-free threshold for residents. National income tax is withheld each pay run through PAYG. A Medicare Levy of 2% applies to most residents on top of income tax. Foreign residents do not receive the tax-free threshold and are taxed from the first dollar of Australian income. Personal income tax is the employee’s liability — the Employer of Record withholds and remits it through PAYG, so it is not an additional employer cost on top of salary, superannuation and state taxes.
2025–2026 Personal Income Tax Bands (Residents)
A Medicare Levy of 2% applies on top for most residents. Foreign residents are taxed from the first dollar with no tax-free threshold and are not subject to the Medicare Levy.
Working Hours & Leave Entitlements
Working hours, leave and public holidays are set by the Fair Work Act through the National Employment Standards, with Modern Awards adding industry-specific detail such as penalty rates.
Working Hours and Overtime
The standard work week is 38 ordinary hours, plus any reasonable additional hours. Overtime, weekend and public-holiday penalty rates are set by the applicable Modern Award and vary by industry. Casual employees are paid a 25% casual loading in place of paid leave.
Leave Entitlements (National Employment Standards)
Public Holidays 2026
Australia has national public holidays — New Year’s Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day and Boxing Day — plus state and territory holidays such as Labour Day, the King’s Birthday and various local days. The total an employee receives is 8–13 days depending on their state. An Employer of Record applies the correct public-holiday calendar for each employee’s location.
Work Permits & Visas
To hire a foreign national in Australia, the employer sponsors the worker’s visa with the Department of Home Affairs. The main route is the Skills in Demand visa (subclass 482), which requires the sponsoring employer to hold Standard Business Sponsorship (SBS) status. When you use an Employer of Record in Australia, the EOR is the sponsor — your overseas company does not need its own ABN, SBS approval or Pty Ltd. For visa support in markets where AYP is not your EOR, see our Asia Mobility service.
How EOR Australia Handles Visa Sponsorship
AYP, as the Australian employer holding Standard Business Sponsorship, runs the three-stage process — sponsorship, nomination and visa application — prepares the supporting documents, and handles the statutory notifications to Home Affairs. Your company selects the candidate and agrees the package; AYP carries the formal sponsorship obligations.
Skills in Demand Visa Thresholds
Candidates must also meet skills-assessment and English-language requirements. Income thresholds are indexed annually — confirm the current figures with the Department of Home Affairs before any application. Other employer-sponsored routes, including the subclass 494 and the permanent subclass 186, may also apply depending on the role.
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Termination & Employee Exit
Termination in Australia is governed by the Fair Work Act through the National Employment Standards. Notice periods and redundancy pay are set by the NES, and employees are protected against unfair dismissal once they pass a qualifying period of service. An Employer of Record manages the process — notice, final pay, leave payouts and statutory steps — to reduce the risk of an unfair-dismissal claim.
Notice Period Requirements (National Employment Standards)
Redundancy Pay (National Employment Standards)
Small businesses with fewer than 15 employees are exempt from redundancy pay. Unfair-dismissal protection applies after 6 months of service, or 12 months at a small business.
Legitimate Grounds for Termination
Australian law recognises dismissal for performance, misconduct and genuine redundancy — but the process matters. A valid performance dismissal needs documented warnings and a chance to improve; a genuine redundancy needs the role, not the person, to have ended, with consultation obligations met. An Employer of Record manages the documentation, the notice and final-pay calculation, and the statutory steps end to end.
Why AYP
AYP Group is the Employer of Record partner of choice for companies hiring across Asia-Pacific. Three things define the EOR Australia experience.
- A direct, ASIC-registered Australian entity. Your employees are hired and managed by AYP’s own Australian Pty Ltd — not routed through a third-party aggregator. That means one contract chain, one point of accountability, and no partner mark-up.
- Transparent, predictable pricing. EOR Australia runs on a clear monthly fee per employee, with no hidden setup fees and no surprise compliance charges. You see the full cost — salary, superannuation, state taxes and fee — before you sign. Details are on our pricing page.
- One partner, one contract, all of APAC. Hire in Australia today and in Singapore, Japan, South Korea, China or across Southeast Asia next quarter on the same contract, account team and invoice. See EOR Singapore, EOR Japan, EOR South Korea, EOR China and our full Employer of Record coverage. See About AYP for our company background.
Glossary of Australia Employment Terms
EOR (Employer of Record) — a registered local company that legally employs staff on your behalf. Pty Ltd (Proprietary Limited) — Australia’s standard private company structure, registered with ASIC.
Superannuation Guarantee — the compulsory 12% employer retirement contribution.
Payday Super — from 1 July 2026, the rule that super is paid alongside wages, not quarterly.
PAYG — Pay As You Go, the income-tax withholding system.
Single Touch Payroll (STP) — real-time payroll reporting to the ATO.
NES — the National Employment Standards, the statutory minimum entitlements.
Modern Award — one of 100+ industry awards setting pay and conditions above the minimum wage.
Payroll tax — a state-based tax on wages above a state threshold.
Fair Work — the Fair Work Act, Ombudsman and Commission, Australia’s employment framework.
Legal disclaimer: this guide provides general information about Australia employment regulations and EOR services. Specific legal advice should be obtained from qualified professionals. Employment laws and regulations change — verify current rules before acting.
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EOR Australia stands for Employer of Record Australia — a locally registered Australian company (a Pty Ltd) that legally employs your staff on your behalf, so you can hire in Australia without setting up your own entity. The EOR holds the employment contract, runs payroll, pays the 12% Superannuation Guarantee, handles PAYG withholding and state-based payroll tax and workers’ compensation, sponsors work visas, and ensures compliance with the Fair Work Act and the National Employment Standards.
The split of responsibility is clean: you handle the work, AYP handles the employment. You interview and choose the hire, set the salary, and manage their day-to-day work and performance. AYP issues the Australian employment contract, onboards the employee, runs payroll, pays superannuation, handles PAYG, payroll tax and workers’ compensation, and files what Fair Work and the ATO require. You receive one monthly invoice covering salary, on-costs and the service fee. For companies that already have an Australian entity and only need HR and payroll run for them, see our Professional Employer Organisation (PEO) services.
The EOR is the legal employer on paper. It signs the employment contract, remits superannuation, PAYG, payroll tax and workers’ compensation premiums, and carries regulatory liability with the ATO, the Department of Home Affairs and Fair Work. Your company keeps full control of the role, the work, performance management and pay decisions. There is no separate “EOR licence” in Australia — the EOR is simply the registered employer. For the wider regional picture, see our Employer of Record APAC overview.
EOR Australia from AYP is a predictable monthly fee per employee, with no hidden setup fees and no per-filing surcharges. The fee covers the Australian employment contract, payroll, the 12% Superannuation Guarantee, PAYG withholding, state-based payroll tax and workers’ compensation, Single Touch Payroll reporting, work visa sponsorship for foreign hires, and ongoing Fair Work compliance. See our pricing page, or contact our team for a quote based on your roles and hiring volume.
A local Australian hire can usually be contracted and on payroll within 2–3 business days once documents are ready — far faster than the 2–4 weeks it takes to incorporate a Pty Ltd and register for payroll tax. A foreign hire who needs a Skills in Demand visa takes longer: roughly 3–4 weeks end to end via the Specialist Skills Stream, or 10–16 weeks via the Core Skills Stream.
The EOR handles the 12% Superannuation Guarantee (paid alongside wages under Payday Super from 1 July 2026), PAYG income-tax withholding, state-based payroll tax, workers’ compensation insurance, and Single Touch Payroll reporting to the ATO. For a standard role this adds roughly 15–20% on top of base salary, depending on the state and industry. See our Asia Payroll service for standalone payroll if you already have an Australian entity.
Yes. As an Australian employer holding Standard Business Sponsorship, AYP sponsors the Skills in Demand visa (subclass 482) — running the sponsorship, nomination and visa stages and handling the notifications to the Department of Home Affairs. Your company does not need its own ABN, sponsorship approval or Pty Ltd for the visa to be issued.
Termination follows the Fair Work Act and the National Employment Standards. Notice ranges from 1 week to 4 weeks by length of service, with an extra week for employees aged 45 or over with two or more years of service. Redundancy pay runs from 4 to 16 weeks (small businesses under 15 employees are exempt), and unfair-dismissal protection applies after 6 months of service, or 12 months at a small business. Your company decides on the termination; as the legal employer, AYP executes it compliantly to reduce the risk of an unfair-dismissal claim.
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