A top-line guide to employing staff in Australia

A top-line guide to employing staff in Australia

Taking on staff can be a big step but also a great way grow your business. There are several options available and it is imperative that the correct guidelines are followed regarding employee terms, taxation, super payments and reporting.

Staff terms

Firstly consider what terms the staff member will be employed under (or would it be more economical initially to hire contractors). Terms include full-time permanent, part-time permanent, fixed term contracts and casual contracts. Be sure to understand the difference between an employee and a contractor1.

To understand employee terms more fully and the employee / contractor rules there are government bodies such as the Fair Work Ombudsman2. Professional service providers can also be a great way to tailor solutions to suit your business.

Developing employee contracts and a company handbook will help to protect your business and advise the staff member what is expected of them in terms of conduct. It is important that if staff fall under an award that you are clear of your obligations in terms of working conditions and remuneration. The Fair Work Ombudsman can be consulted to assess award guidelines or a professional services provider. It is important that staff members are provided with the Fair Work Statement before or as soon as possible after they start their job2.

If engaging contractors there are specific guidelines and procedures that must be followed under the PSI, employee / contractor regulations. If your company is within the building and construction industry you will need to report payments made to each contractor on the taxable payments annual report3.

Pre-employment check-list

Before employing staff it is vital that you check that they are legally permitted to work in Australia. I.e. Australian citizens, permanent residents, and New Zealand citizens. Check visa’s for foreign nationals.

If you have not hired workers before within your company, register for PAYG (pay as you go). Additionally, set up a default super fund in case they do not have a super fund already established.

Ensure you set up sufficient record keeping systems to pay your staff. Accounting packages such as Xero can be extremely useful as they include payroll facilities.

There are a number of specific areas that you will need to understand in full. Although not required by law, it is strongly recommended that you seek advice from a qualified and registered Australian accountant in relation to these areas, which are as follows:

  • registering for fringe benefits tax (if you are providing these to staff).
  • staff tax file number declaration, in relation to PAYG and or withholding tax deductions.
  • Superannuation, your obligations and options.

Ensure that you are aware of the health and safety guidelines within your state and that the working environment is compliant4.

During employment

Ensure staff are briefed on the health and safety guidelines (via an induction and through the staff handbook). Organising an induction for new staff members is a great way to not only make them feel involved but also to help to ensure their safety and yours.

Sharing your company goals and vision can also be a great way to involve and engage your staff. This can be included in the induction phase and within the company handbook.

Record keeping is legally required for staff members for at least seven years. As previously mentioned accounting packages or engaging bookkeepers or accountants can be advantageous.

Tax filing, super payments, PAYG, annual group member certificates, auditing, and many other legal requirements must be complied with, and your accountant can guide you in these areas.

Please note that the information provided in this article is intended as a guide to assist you in seeking the professional advice that you need in relation to your business.