TL;DR, Hiring in Australia
- Fully-loaded employer cost: ~11.5–13% on top of gross salary
- Superannuation Guarantee: 12% from 1 July 2025 (was 11.5%)
- Payroll tax is state-based and only kicks in above each state's threshold
- Fair Work Act: National Employment Standards (NES) set minimum 4 weeks annual leave, 10 sick days, redundancy pay
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Statutory employer costs in Australia
In Australia, employer cost is dominated by Superannuation Guarantee, which rose to 12% from 1 July 2025 (paid on Ordinary Time Earnings, capped at the maximum contribution base of ~$65,000/quarter). State payroll tax of 4.75–6.85% applies only above each state's threshold (typically $1.2–2M annual payroll). Workers' compensation insurance varies by state and industry. Foreign companies under the EOR threshold typically pay just superannuation + workers' comp = 13–14% above gross.
| Contribution | Employer rate | Notes |
|---|---|---|
| Superannuation Guarantee (Super) | 12.0% | From 1 July 2025; paid on OTE up to Maximum Contribution Base (~$65,070/qtr 2024-25) |
| Payroll tax (state) | 4.75–6.85% | Only above state thresholds: NSW $1.2M, VIC $900K, QLD $1.3M. Most EORs below threshold. |
| Workers' compensation insurance | 0.5–3% | State-mandated, premium varies by industry and claims history |
Mandatory employee benefits
Beyond statutory contributions, Australia law requires the following benefits the employer must fund.
- Annual leave
- 4 weeks (20 days) paid leave per year; shift workers get 5 weeks.
- Personal/carer's leave
- 10 days per year, accruing progressively.
- Long service leave
- 8.67 weeks paid leave after 10 years of continuous service (state-specific; VIC is 6 weeks after 7 years).
- Parental leave
- 12 months unpaid (extendable to 24); government pays 22 weeks at minimum wage from 1 July 2024.
- Public holidays
- 10–13 days per year depending on state; paid for full-time employees.
Termination, notice and severance
Probation
Minimum employment period: 6 months (12 months for small employers <15 staff) before unfair dismissal protections kick in.
Notice period
1 week (<1 yr), 2 weeks (1–3 yrs), 3 weeks (3–5 yrs), 4 weeks (5+ yrs). Add 1 week if employee is over 45 with 2+ years' service.
Severance
Redundancy pay (NES): 4 weeks (1–2 yrs) up to 16 weeks (9–10 yrs), capped at 12 weeks for 10+ years for non-small businesses. Small businesses (<15 employees) are exempt from redundancy pay obligations.
Common compliance pitfalls
- Superannuation must be paid quarterly into the employee's chosen fund; failure triggers Superannuation Guarantee Charge (SGC), the 12% plus interest plus a $20 admin fee per employee. Penalties scale rapidly.
- Unfair dismissal: after 6 months (or 12 for small employers), employees can challenge termination at the Fair Work Commission. Compensation cap is 26 weeks' salary, but reputational risk and legal costs are significant.
- Modern Awards, most industries have a binding Modern Award setting minimum wages, allowances, penalty rates (weekend/overtime), and classifications. Your EOR must apply the correct award; tech roles typically fall under Professional Employees Award 2020.
- Casual vs permanent classification: post-2024 reforms make it easier for casuals to convert to permanent after 6 months of regular hours. Genuine casuals get a 25% loading instead of leave entitlements.
Frequently asked questions
Superannuation Guarantee reached 12% on 1 July 2025, completing the staged rise from 9.5% started in 2014. It was 11.5% in FY 2024-25. The rate is now stable at 12% with no further increases legislated.
EOR platform fees for Australia range from $199–$699 per employee per month. On top, employer-side contributions add ~13–14% to gross salary (12% super + 1–2% workers' comp). Payroll tax typically does not apply because EORs are below state thresholds when invoicing per-employee.
Modern Awards are industry-specific instruments under the Fair Work Act setting minimum wages, classifications, overtime, and conditions. Professional Employees Award 2020 covers most tech roles. Even on EOR, the award sets the floor, paying above-award salary is fine, but conditions (e.g. overtime rates) must comply.
Yes, within the 'minimum employment period' (6 months for employers with 15+ staff, 12 months for smaller), employees cannot claim unfair dismissal. You still owe notice pay per the NES (1 week minimum) and accrued annual leave.
Yes, it's a uniquely Australian benefit. Employees become entitled to 8.67 weeks of paid leave after 10 years of continuous service with the same employer (varies by state; VIC is 6 weeks at 7 years). EOR accrues this as a long-term liability, meaningful for tenured hires but not for typical 2-3 year EOR engagements.
Sources
Statutory rates and rules verified against the following authorities. We update this page when rates change.