Expanding your business into Australia from countries like the US or UK can be a great way to penetrate the Asia-Pacific market. However, hiring skilled workers on the ground can be challenging without a local entity in Australia and strong knowledge of Australian employment law and compliance.
As an international business, there are two options for hiring workers in Australia:
Set up a physical entity in Australia to legally hire workers
The first and most obvious option for hiring workers is the conventional way; setting up a legal entity in Australia, giving you rights to employ workers in the country.
According to the Australian Securities and Investment Commission (ASIC), the legal requirements to set up a physical entity in Australia are as follows:
- Establish and register a physical office space, place of business and directors
- Create and manage a business name
- Keep ASIC informed of key changes
- Maintain up-to-date financial records
- Pay relevant fees to ASIC
- Create and monitor annual statements
- Engage a trusted legal team to assist in understanding compliance and Australian employment law.
For example, suppose a gaming company, let’s call them Radical Gaming, wanted to hire a Software Engineer in Australia the conventional way. In that case, they’d need first to establish a physical office in Australia to then create the legal entity that enables them to employ workers in the country. They would then need to hire a board of directors, create and manage their selected business name and pay relevant ongoing fees to ASIC. This process alone can take months or even years.
Engage an Employer of Record to hire workers on your behalf.
What is an employer of record?
An employer of record (EOR) is a company that acts as the legal employer of workers on behalf of another company for tax purposes. In an EOR employment arrangement, while the employee is technically hired by the EOR, the worker performs work for the other company.
EOR services like Australia PEO take on the responsibility of various administrative tasks, from visa and sponsorship to onboarding and payroll. The end company will manage the employee directly.
What are the benefits of engaging an employer of record company?
When you work with an EOR, you don’t have to familiarise yourself with complex Australian labour law, or other administrative functions like onboarding and payroll.
Once you’ve recruited your employee, an EOR like Australia PEO can have your new worker onboarded and ready to start within 24 hours, giving you more flexibility to concentrate on your broader growth strategy and team management.
By far, the most significant advantage of engaging an EOR company like Australia PEO is the ability to expand into Australia very quickly and without establishing a local entity.
So if the same company, Radical Gaming, had sourced a Software Engineer in Australia, Australia PEO (or the EOR) would onboard and hire them on Radical Gaming’s behalf, becoming the legal employer of record for the engineer. Australia PEO would manage payroll and benefits and offer ongoing HR support for this engineer while they report to and perform tasks for Radical Gaming.
Companies that hire skilled workers in Australia through an Australia EOR reap the benefits
- Hire remote skilled workers in Australia without the hassle: you source your ideal candidate, and we become the employer of record for your Australia-based worker, eliminating the need to set up a legal entity in the country.
- Fast onboarding: We’ll have your skilled worker signed on and working in as little as 24 hours.
- Remote HR functions: Australia PEO takes on several administrative tasks from payroll to legal matters, leave entitlements and employee support.
Contingent workers benefit from an EOR arrangement too.
Contingent – or co-employed – workers are also exposed to several advantages of being employed under an EOR agreement.
Accurate payment on time: as experts in Australian labour laws and entitlements, Australia PEO will ensure your workers have their wages paid on time and accurately.
Support on the ground: As the only Australia-based EOR for skilled workers in Australia, your company and skilled workers will have access to round-the-clock support from our dedicated Account Management team.
Workplace rights protected: When expanding into a different country, you’re legally required to abide by the local employment laws. Employing workers through an Australian EOR such as Australia PEO means your workers can rest assured knowing their workplace rights are being protected.
How much does it cost to hire skilled workers in Australia?
List most developed countries, there are a number of additional costs of hiring workers in Australia, on top of salary.
Firstly employers must pay contributions into an employee’s mandatory superannuation fund (the equivalent to 401K in the US). These amount to 10.5% of the employee’s annual salary.
They’re also required to pay around 2% of their salary for workers’ compensation (depending on the policy), 5.45% in payroll tax and – in some cases – 17.5% annual leave loading.
For a skilled worker earning a base salary of $120,000, an employer can expect to pay an additional $12,600 in superannuation contributions, $2,400 in workers’ compensation, $6,540 in payroll taxes, and, where applicable, $21,000 in annual leave loading—bringing the total additional costs to $42,540.
Would you like to hire workers remotely through an Employer of Record, such as Australia PEO? Our dedicated employment team is based in Australia and ready to assist in employing your ideal candidate. Reach out today.