How to hire in Australia through an EOR

Fixed-term contracts in Australia can't just roll over forever. After two years or a few renewals, they often convert to permanent roles, so you'll want indefinite contracts for most hires to avoid surprises.

Companies use indefinite contracts 80-90% of the time. They fit Australia's strong employee protections and reduce the legal risk that comes with term limits.

What has to be in the contract

Contracts don't have to be written to be legally binding. Verbal agreements count too. But always get it in writing. Disputes are much harder to resolve without a clear record of the terms.

Australia's National Employment Standards (NES) set the minimums. Your contract can't go below them. At a minimum, cover: job title and duties, pay rate (hourly or salary), hours (38 per week max average), place of work, leave entitlements, superannuation (currently 11.5%, rising to 12% by July 2025), and notice periods for termination.

There's no language requirement. English is fine unless the role calls for something else. You're also required to give every new hire the Fair Work Information Statement on their first day.

Probation periods aren't set by the NES. You define them, typically 3-6 months. They don't give you a free pass to terminate without reason. After probation, unfair dismissal protections apply to employees with more than 6 months' service, or 12 months if you're a small business. Use the probation period to assess fit properly, and document any concerns as they come up.

Contractor vs employee

This is where most international companies get caught out. Misclassifying an employee as a contractor can mean owing backpay, super, and leave, plus fines of up to $93,000 per breach for companies and $18,500 per individual director. The Fair Work Ombudsman audits regularly, and courts look at the reality of the arrangement, not just the label on the contract.

There are four factors courts consider. Control: do you dictate how, when, and where they work? Integration: are they embedded in your business, using your tools? Ability to delegate: can they subcontract the work? Results vs process: are you paying for outcomes or time? If the answers point to employment, reclassify quickly.

If you've misclassified someone, fix it by paying what's owed. Ignoring it can lead to unfair dismissal claims or sham contracting penalties that double the fines you're already facing.

Non-competes are hard to enforce in Australia. Courts will void them unless they protect a legitimate business interest, like client relationships, and even then they need to be narrow in time (typically 3-12 months), geography, and scope. IP assignment clauses work, but employees own what they create unless the contract says otherwise. Spell it out clearly from the start.

For most hires, stick to indefinite written contracts that meet NES requirements. If you don't have a local entity, an EOR can draft compliant contracts and handle classification questions so you're not left guessing.

Australia gives full-time employees 4 weeks of paid annual leave from day one. That's 152 hours based on a standard 38-hour week, and it rolls over year after year with no use-it-or-lose-it rule.

Time off

Full-time employees get 4 weeks (152 hours) of paid annual leave per year. It accrues from day one at 2.923 hours per week for a 38-hour schedule. Part-timers get a pro-rata share based on their ordinary hours, so someone working 20 hours weekly accrues around 80 hours a year.

Leave continues to accrue during paid absences like sick leave or other annual leave, and during community service like jury duty. It stops accruing during unpaid parental leave or similar gaps. When someone leaves, you'll need to pay out all unused annual leave at their base rate.

These are the 10 national public holidays. States add a few more, like Labour Day. Employees are entitled to paid time off on these days, or penalty rates if they work.

All leave types

Mandatory benefits

You're required to pay 11% superannuation guarantee on top of ordinary time earnings into an employee-chosen fund. That's your full cost to cover. Employees choose the fund and own it outright, so there's no employer-employee split like you'd see in Europe.

There's no mandatory health insurance or social security beyond super. Workers' compensation is required through state schemes, and you pay the full premium based on industry risk. At the national level, there are no required extras like meal vouchers or transport allowances, though some awards do include them.

What people actually expect

The legal minimums are a starting point, but Australian employees generally expect you to meet award or enterprise agreement levels. Those often include annual leave loading of 17.5% extra pay. Offering only National Employment Standards minimums will make it harder to compete for talent in fields like tech or finance.

Around 55% of employers subsidise private health insurance to help employees avoid the Medicare Levy Surcharge. Remote work has become the norm since 2020, so home office stipends of $500-1,000 per year or flexible leave arrangements are increasingly common.

Most employees factor in a total package of 13-15% above base, accounting for super, bonuses, and salary sacrificing into super. If you're hiring senior people, expect requests for long service leave portability and wellness days. Employers offering 5 weeks of annual leave plus wellness perks will have a real edge in attracting that level of candidate.

Terminating someone in Australia can trigger an unfair dismissal claim if you don't have a clear, defensible reason tied to their conduct, capacity, or a genuine redundancy. You'll need to notify them, give them a chance to respond, and in most cases issue warnings first. Australia sits firmly on the employee-friendly end of the spectrum, so document everything carefully if you want to avoid a Fair Work Commission hearing.

Firing someone

You can terminate for valid reasons like poor performance, misconduct, or capacity issues, but the reason needs to be sound and defensible. For serious misconduct such as theft, fraud, violence, or safety breaches, you can dismiss without notice if you have clear evidence. If criminal acts are involved, reporting to police is worth considering, though it's not a legal requirement.

Unfair dismissal applies when a termination is harsh, unjust, or unreasonable. That includes having no valid reason, failing to notify the employee, not giving them a chance to respond, or refusing them a support person in any discussions. For performance or non-serious misconduct, you'll typically need to show a pattern of incidents and prior warnings.

Dismissing someone for a protected reason is a different category of risk. Fines can reach $10,800 for individuals or $54,000 for companies. You can't fire someone for race, colour, sex, sexual orientation, age, disability, marital status, family responsibilities, pregnancy, religion, political opinion, union activity, absence due to illness or injury, parental leave, or emergency volunteer work. Constructive dismissal also applies if your actions effectively force someone to resign, and the Commission tends to view that poorly for employers.

Who can make a claim: employees earning under $123,300 (excluding super, indexed yearly), or those covered by awards or enterprise agreements regardless of pay. Minimum service is 6 months in businesses with 15 or more employees, or 12 months in smaller ones. Certain casuals, employees within their first 6 or 12 months, fixed-term contract completions, and traineeships are excluded.

Notice periods

Notice periods are set by the Fair Work Act and go up with tenure. Employees are expected to give similar notice when resigning, unless serious misconduct is involved. You can pay in lieu of notice if you'd prefer the employee to leave immediately.

Severance

Severance in Australia is called redundancy pay, and it's only required for genuine redundancies. It doesn't apply to terminations for performance or misconduct. To qualify, the role must no longer be needed, and you need to have followed the correct consultation process. Businesses with fewer than 15 employees are exempt.

The calculation uses base pay at the time of dismissal, pro-rated for partial years. Awards or enterprise agreements may set different amounts, so it's worth checking what applies to the role.

Work permits and visas

You can hire foreign nationals through an EOR, but the EOR needs to be the sponsoring employer since they're the legal entity on record. Australia doesn't have a digital nomad visa, so any work done there requires formal sponsorship.

The main options are the Temporary Skill Shortage (TSS) visa (subclass 482) for skilled roles on the sponsor's approved list, valid for up to 4 years; the Employer Nomination Scheme (ENS, subclass 186) for permanent residency after a period of temporary work; and the Global Talent visa for senior professionals in priority sectors, which tends to move faster.

EORs can handle sponsorship if they're already approved by the Department of Home Affairs. Key requirements include Labour Market Testing (showing no suitable local candidate was available), a genuine position, and a salary at market rate, often $70,000 or above as a minimum. TSS processing typically takes 1 to 3 months if your application is complete. Processing slowed in 2024-2025 due to backlogs, so check current timelines at immi.homeaffairs.gov.au.

A few other things worth knowing

Data protection falls under the Privacy Act 1988. You're required to safeguard employee data, get consent for collection, store it securely, and notify affected individuals within 30 days if a serious breach occurs.

Trade unions are active in Australia, with around 12% of workers unionised as of 2024. Employees have the right to join, and you can't take action against them for doing so. Collective bargaining through enterprise agreements is common in roles covered by awards, and EORs typically manage that process on your behalf.

A few recent legal changes are worth flagging. Fair Work Act updates in 2024 strengthened anti-bullying protections and introduced wage theft penalties of up to 10 years in jail. A 2025 High Court ruling made it easier for regular casual workers to convert to permanent roles. The unfair dismissal earnings threshold sits at $123,300 in 2025 and will likely increase again in 2026 through indexation.