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
Last reviewed:
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
Sources
Statutory rates and rules verified against the following authorities. We update this page when rates change.