Employer of Record (EOR) in Australia: Complete 2026 Guide
Guide to using an EOR in Australia — costs, Fair Work Act compliance, top providers, and comparison with setting up a local entity.
Australia offers a highly skilled, English-speaking workforce with strong legal protections and a stable economy. With GDP growth of 2.6% in late 2025 and diverse industries spanning mining, technology, finance, and professional services, it is a prime destination for companies expanding into the Asia-Pacific region.
However, Australia's Fair Work system is complex. Modern Awards set industry-specific minimum pay and conditions, superannuation contributions are mandatory and changing, and the Fair Work Commission enforces strong unfair dismissal protections. An Employer of Record (EOR) manages these obligations for you.
Why Use an EOR in Australia?
Modern Awards complexity. Australia has over 120 Modern Awards that set minimum pay rates, overtime, penalty rates, and allowances for specific industries and occupations. Identifying and complying with the correct Award is essential — underpayment is now a criminal offence.
Superannuation obligations. Employers must contribute 12% of ordinary time earnings to a superannuation (retirement) fund. From July 2026, "payday super" takes effect, requiring contributions at the same time as wages (instead of quarterly). Getting this wrong triggers penalties from the ATO.
Unfair dismissal protections. The Fair Work Act 2009 provides strong protections against unfair dismissal for employees at businesses with 15+ employees (after minimum employment period). Small businesses follow the Small Business Fair Dismissal Code.
Penalty rates. Work on weekends, public holidays, and evenings often attracts penalty rates (150-250% of base rate) under Modern Awards. The Protecting Penalty and Overtime Rates Act 2025 ensures these cannot be reduced.
Criminal wage theft. Since January 2025, intentional underpayment of wages is a criminal offence under the Fair Work Act, with severe penalties for employers.
Important
For a detailed breakdown of Australian labor laws including minimum wages, working hours, superannuation, and leave policies, see our Australia Labor Law Compliance Guide.
How EOR Works in Australia
- You select the candidate.
- The EOR drafts a Fair Work-compliant employment contract aligned with the applicable Modern Award or Enterprise Agreement.
- The EOR registers as an employer with the ATO and sets up PAYG withholding.
- The EOR runs payroll — calculating PAYG income tax, superannuation contributions, and any Award-specific penalty rates or allowances.
- The EOR manages superannuation — selecting a compliant fund and making timely contributions.
- You manage the employee's daily work.
Key Employment Regulations
| Regulation | Details |
|---|---|
| Minimum wage | AUD $24.95/hour / $948.10/week (from July 2025) |
| Standard hours | 38 hours/week |
| Overtime | 150% first 2-3 hours, 200% thereafter (Award-dependent) |
| Annual leave | 20 days (4 weeks) |
| Personal/carer's leave | 10 days per year |
| Parental leave (govt-funded) | 26 weeks from July 2026 |
| Public holidays | 8 national + state-specific |
| Superannuation | 12% of ordinary time earnings |
| Notice period | 1-5 weeks based on service |
| Redundancy pay | 4-16 weeks based on service |
EOR Costs in Australia
Provider Fees
Most EOR providers charge $500 to $700 per employee per month for Australian employees.
| Included | Typically Extra |
|---|---|
| Payroll processing and PAYG withholding | Private health insurance |
| Superannuation administration | Equipment procurement |
| Modern Award compliance | Background checks |
| Employment contract drafting | Visa/immigration support |
| Leave tracking (NES entitlements) | Salary packaging/novated leasing |
| Onboarding and offboarding | Workers' compensation top-up |
Statutory Employer Costs
| Statutory Cost | Rate |
|---|---|
| Superannuation | 12% of ordinary time earnings |
| Workers' compensation | 1-5% (varies by state and industry) |
| Payroll tax | 4-7% (state-based, threshold applies) |
Total statutory employer costs add approximately 14-20% on top of gross salary, depending on state, industry, and salary level. Payroll tax thresholds mean smaller employers may not pay payroll tax at all.
EOR vs Setting Up a Local Entity
| Factor | EOR | Local Entity (Pty Ltd) |
|---|---|---|
| Setup cost | $0 (provider fee only) | AUD $5,000-$15,000 (ASIC registration, legal, accounting) |
| Setup time | 5-10 business days | 1-3 weeks |
| Ongoing admin | Handled by EOR | BAS lodgement, super, PAYG, annual return |
| Compliance risk | EOR assumes liability | Your responsibility (criminal wage theft laws) |
| Flexibility | Easy to scale up or down | Fixed costs regardless of headcount |
| Best for | 1-5 employees | 5+ employees, APAC operations |
Break-even point: Australian entity setup is relatively straightforward. A Pty Ltd typically becomes cost-effective at 4-6 employees. However, Modern Award complexity and the new payday super requirements mean many companies value EOR compliance support even with small teams.
Top EOR Providers for Australia
| Provider | Owned Entity | Starting Price | Strengths |
|---|---|---|---|
| Deel | Yes | $599/mo | Fast onboarding, strong platform |
| Remote | Yes | $599/mo | All owned entities |
| Multiplier | Yes | ~$400/mo | APAC specialist, competitive pricing |
| Oyster HR | Yes | $599/mo | Good employee experience |
| Velocity Global | Yes | Custom | Broad APAC coverage |
Australia is well-served by most major EOR providers. Key considerations:
- Modern Award expertise — Provider must identify and apply the correct Award for each role
- Payday super readiness — New rules from July 2026 change contribution timing
- State-specific knowledge — Workers' comp, payroll tax, and public holidays vary by state
- Criminal underpayment awareness — Compliance is now more critical than ever
For a full comparison, see our Best Employer of Record Companies guide.
When to Choose EOR vs Direct Hiring in Australia
Use an EOR when:
- You have no Australian entity and want to hire 1-5 employees
- You are unsure which Modern Award applies to your hires
- You want to avoid super, PAYG, and payroll tax admin
- You are testing the Australian/APAC market before committing
Hire directly when:
- You already have an Australian Pty Ltd
- You plan to hire 5+ employees in Australia
- You need Australia as your APAC headquarters
- You want full control over super fund selection and salary packaging
Pro Tip
Starting July 2026, "payday super" requires employers to pay superannuation at the same time as wages — not quarterly. This is a significant operational change. If you are using an EOR, confirm they are ready for payday super compliance before it takes effect.
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