What Is an Employer of Record in Australia?
An Employer of Record (EOR) in Australia is a locally registered company that becomes the legal employer of your Australian workforce. It lets companies based anywhere hire people in Sydney, Melbourne, Brisbane, or anywhere else in the country without registering a proprietary limited company, appointing a director who ordinarily resides in Australia, or completing separate payroll tax and workers compensation registrations in every state where you have someone working.
The EOR takes on the statutory employer duties, including the employment contract and Modern Award classification, payroll with PAYG withholding and Single Touch Payroll reporting, superannuation on the payday cycle, state payroll tax and workers compensation, National Employment Standards entitlements, and lawful termination. You keep full control of the employee’s role, priorities, and performance.
This Model Works Especially Well When:
- You want one to five people in Australia, and the entity overhead would exceed what that team justifies.
- You have nobody ordinarily resident in Australia who can take on the personal exposure of being a director.
- You are hiring across more than one state and do not want parallel payroll tax and workers compensation registrations.
- You are unsure which Modern Award applies to a role, which is a question worth getting right before the first payslip.
- You have contractors in Australia who may be employees under the current statutory test.
Komp delivers this as part of a single workforce platform, so your Australian employees sit alongside contractors, EOR workers, and direct employees in other countries, governed by the same data, workflows, and controls.
How Komp’s Employer of Record Works in Australia
Komp becomes the legal employer for your Australian team members and takes on their statutory liabilities, while you run the work. Here is what that looks like in practice.
Skip the company registration, the resident director requirement and the personal liability that comes with it, the director identification number process that is a genuine source of delay for offshore directors, the corporate bank account, and the payroll tax and workers compensation registrations that apply separately in each state.
Komp Activate runs onboarding, contracts, award classification, and the statutory information statements; Komp PayOps runs payroll with PAYG withholding, Single Touch Payroll, and superannuation on the payday cycle; Komp TimeOps tracks hours against award span and penalty provisions; and compliant offboarding, including notice and redundancy entitlements, closes the loop in one flow.
Komp Workforce gives HR, Finance, and Legal a single source of truth for Australian and global headcount, covering payroll status, fully loaded employer costs by state, award classification, leave balances including state-based long service leave, and compliance alerts, with audit trails built in.
See How It Works →
What Komp Handles Under EOR in Australia
Komp manages every part of the Australian employment relationship so your team can focus on the work, not the paperwork.
Modern Award identification and classification
We determine whether an award applies, which one, and which classification level fits the work being performed, then build the pay structure around it. Coverage follows the employer’s industry and the employee’s real duties rather than the contract or the job title, several awards can apply within one workplace, and genuinely award-free roles are rarer than most employers assume.
Compliant pay structures above the award
Where salaries sit above award minimums, we use the mechanisms that do discharge award obligations, which may be an award-based annualized wage arrangement with its outer limits, time records and annual reconciliation, a properly drafted set-off that identifies the specific entitlements being satisfied and is tested each pay period, or a guarantee of annual earnings for high income employees. A generous undifferentiated salary is not one of those mechanisms.
Payroll, PAYG withholding, and Single Touch Payroll
Komp PayOps runs payroll on your chosen cycle, withholds income tax under the current resident scales including the Medicare levy, and reports each pay event to the tax office through Single Touch Payroll, which has been expanded to carry disaggregated income components.
Superannuation on the payday cycle
Superannuation is now paid at the full guarantee rate and must reach the employee’s fund within a short window of each payday rather than quarterly, with a broadened earnings base that brings in commissions that previously fell outside it. The timing test is receipt by the fund, so clearing house lag is the employer’s risk. Komp builds that into the payment calendar rather than discovering it.
State payroll tax and workers compensation
Payroll tax is levied by each state and territory with its own threshold and rate, and grouping rules can aggregate related entities. Worker compensation is a separate state-based scheme with its own insurer arrangements and premium basis. Komp holds the registrations and files in each state where your people work.
National Employment Standards entitlements
Komp TimeOps tracks the standard working week and reasonable additional hours, four weeks of paid annual leave, personal and carer’s leave, paid family and domestic violence leave, parental leave, public holidays, the right to disconnect, and long service leave, which accrues under state legislation and differs between states.
Casual employment handled correctly
The statutory definition of casual employment and the pathway by which a casual employee can choose to convert to permanent employment were both changed in 2024. Casual loading, minimum engagement periods, and the information statement obligations all follow from getting the characterization right at the outset.
Termination within the Fair Work framework
We manage exits with the correct notice under the National Employment Standards, the applicable redundancy entitlement where a role is genuinely redundant, and the consultation that awards require. We also flag where a dismissal would carry unfair dismissal or general protections exposure before it happens rather than afterwards.
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Employer of Record vs Entity Setup in Australia
| Criteria |
Employer of Record (Komp) |
Your Own Australian Entity |
| Best suited for |
One to five people, market entry, multi-state hiring, contractor conversion |
Scaling headcount, contracting with Australian customers, or sponsoring work visas |
| Resident director |
Not required from you |
Mandatory, and the director carries personal exposure including for unpaid withholding and superannuation |
| Time to first hire |
As soon as the candidate accepts |
Realistically weeks, driven by the director identification process and banking rather than the registration itself |
| State registrations |
Held by Komp |
Payroll tax and workers compensation registered separately in each state where you employ |
| Award compliance |
Classified and maintained by Komp |
Your responsibility, retrospectively if you get it wrong |
| Visa sponsorship |
Not available for a role performed in your business |
Available once you hold a standard business sponsorship |
| Compliance ownership |
Managed by Komp with AI-assisted monitoring and human review |
Your responsibility across Fair Work, superannuation, state taxes, and insurance |
| Workforce visibility |
Australian data unified with your global workforce in one platform |
Often a separate local payroll provider and a separate HR system |
8.5 Work Visas: What an EOR Can and Cannot Do
This deserves its own section because the answer in Australia is different from most markets, and because getting it wrong wastes months.
Australian employer sponsorship works through a standard business sponsorship followed by a nomination, and the nomination rules require the position to be in the sponsor’s own business or that of an associated entity. In a conventional Employer of Record arrangement, the worker performs the role in the client’s business, which is an unrelated third party. That does not satisfy the nomination requirement, so an EOR cannot sponsor a skilled work visa for a role performed in your business. There is a separate on-hire labor agreement regime designed for labor hire businesses placing sponsored workers with host companies, but it carries a default nomination ceiling of zero that must be negotiated upward, a salary floor well above the ordinary threshold, additional experience requirements, and no permanent residence pathway.
What follows is straightforward and worth saying plainly. Komp can employ Australian citizens, permanent residents, and anyone who already holds work rights, which covers almost every hire most companies make here. If your objective is to sponsor a specific person from overseas, the practical answer is your own Australian entity with its own sponsorship approval, and we would rather tell you that before you build a plan around the alternative. Separately, labor hire licensing regimes operate in several states independently of immigration, which is another reason to ask any provider how it is licensed to operate where your people will be.
8.6 Employer of Record Cost in Australia
EOR pricing in Australia varies by provider, service scope, and team size. The comparison worth running is not the fee alone. It is the fee against company registration, a resident director willing to accept personal exposure, an accountant, workers compensation policies and payroll tax registrations in each state, and the cost of getting award classification wrong, which is the largest single financial risk in this market.
Australian employer cost is also higher and less flexible than many foreign buyers expect. Superannuation sits at the full guarantee rate on a broadened earnings base, payroll tax applies above state thresholds, workers compensation is priced by industry risk, and award-covered roles carry penalty rates, loadings, and allowances that do not appear in a base salary comparison but do appear in a compliant payslip.
EMPLOYER COST LINES
| Cost line |
Who pays |
How it behaves |
| Superannuation guarantee |
Employer only |
A percentage of qualifying earnings at the full legislated rate, now payable within days of each payday rather than quarterly, with an annual maximum contribution base |
| Payroll tax |
Employer only |
State-based, with its own threshold and rate in each state and territory, and grouping rules that can aggregate related entities |
| Workers compensation |
Employer only |
A state-based premium priced by industry classification and payroll size, with separate schemes in each jurisdiction |
| Award entitlements |
Employer only |
Penalty rates, overtime, casual loading, annual leave loading, and allowances where an award applies, none of which are visible in a base salary figure |
| Leave and redundancy |
Employer only |
Four weeks of annual leave plus personal leave accrue from the start; redundancy pay follows a service scale; long service leave accrues under state law |
WHAT SHAPES YOUR PRICE
-
Whether an award applies, and which one:
this is the single largest variable in Australian employer cost and the most common source of error.
-
State of each hire:
payroll tax thresholds and rates, workers compensation premiums, and long service leave rules all differ by state.
-
Compensation design:
the superannuation earnings base was broadened, so commission-heavy packages now carry more superannuation than before.
-
Working pattern:
weekend, evening, and shift work attract penalty rates under most awards, which changes the cost of the same salary.
-
Integrations and reporting:
HRIS, ERP, and finance system connections.
WHY EOR DELIVERS STRONG ROI
-
Faster revenue:
your Australian hire starts without waiting on a resident director, a director identification number, and state registrations.
-
Lower overhead:
no company registration, accountant, insurance policies, or in-country HR staff.
-
Lower risk:
award classification done at onboarding rather than reconstructed years later, and superannuation paid on the current cycle.
-
Less admin:
one platform, one invoice, one partner for Australian employment.
Request Your Custom Australia Pricing →
Who Should Use an EOR in Australia?
Technology and software companies
Place sales, solutions, customer success, and engineering staff in a market where enterprise buyers expect local presence and local support hours, without committing to an entity before the revenue case is proven.
Companies covering Asia-Pacific from Australia
The time zone works for the wider region, and English is the working language, which is why many global businesses run regional coverage from Sydney or Melbourne rather than opening a second office elsewhere.
Companies hiring across several states
Payroll tax, workers compensation, and long service leave are administered state by state. A team spread across three states can mean three sets of registrations and rules, or one EOR that already manages the relevant obligations.
Companies with contractors already in Australia
The statutory test for determining whether someone is an employee or contractor changed in 2024 and considers the real substance and practical reality of the relationship. Sham contracting can attract penalties, while reclassification may trigger back pay, superannuation, leave, and award entitlements.
Companies that need the award answer first
If you are unsure which modern award covers a role, settle that question before the first payslip rather than after an audit. Komp assesses award coverage and classification as part of onboarding.
HR and Finance leaders
Get predictable costs by state, consolidated invoicing, award compliance, and audit-ready records for every Australian hire.
Why Komp Is Different from Generic EOR Providers
Many providers can put an Australian employee on payroll. Komp is built as workforce infrastructure, combining AI intelligence, owned payment rails, and human governance so you can grow in Australia with confidence.
AI Agent Swarms with human control
Autonomous agents continuously check payroll, classification, award rates, superannuation timing, statutory deadlines, and regulatory changes. Recommendations are surfaced for review before anything is executed: autonomous intelligence, human control.
Award classification treated as the real risk
Many providers describe awards briefly and move on. In Australia, award coverage and classification can determine minimum pay, penalty rates, allowances, and whether an employee has unfair dismissal protection regardless of salary. Komp assesses classification at onboarding and revisits it when duties change.
Current with the September 2025 set-off decision
The Federal Court's September 2025 decision in the Woolworths underpayment litigation addressed the limits of contractual set-off and the treatment of award entitlements across pay periods. Employers need arrangements that identify the obligations being satisfied and account for entitlements in each relevant pay period, rather than assuming a high salary automatically covers every award obligation.
The planned transition from quarterly superannuation contributions to payday super changes payment timing and compliance processes. Payroll configurations must reflect the applicable commencement date, qualifying earnings, fund receipt requirements, and shortfall rules rather than relying on the previous quarterly cycle.
AES-256 encryption, SOC 2 Type II, ISO 27001, GDPR compliance, role-based access control, and AWS hosting with multi-region redundancy protect your Australian employee data, alongside applicable Privacy Act obligations.
Komp Activate, Komp Workforce, Komp TimeOps, and Komp PayOps connect hiring, workforce records, time, and pay across Australia and 150+ countries.
Start Hiring in Australia →
Australian Employment Compliance: What Global Employers Must Manage
Australian employers answer to the Fair Work Ombudsman and the Fair Work Commission for employment standards and disputes, to the Australian Taxation Office for withholding and superannuation, and to state and territory authorities for payroll tax, workers compensation, and long service leave. These are the areas that matter most, and how Komp helps employers manage them.
The Fair Work Act and the National Employment Standards
The National Employment Standards establish minimum statutory entitlements that cannot generally be displaced by contract. They cover maximum weekly hours, flexible work requests, casual employment, parental leave, paid annual leave, personal and carer's leave, compassionate leave, paid family and domestic violence leave, community service leave, long service leave, public holidays, notice, redundancy pay, information statements, and the right to disconnect. Applicable eligibility requirements and exceptions vary by entitlement.
Modern Awards and how coverage is decided
Modern awards sit above the National Employment Standards for covered employees, establishing classification-based minimum rates and conditions such as penalty rates, overtime, shift loadings, allowances, casual loading, annual leave loading, ordinary hours, and minimum engagement periods. Coverage depends on the employer's industry and the work the employee performs, assessed against the award's coverage provisions and classification definitions. A contract or job title alone does not determine coverage, and a workplace may have employees covered by different awards.
Why getting the award wrong is expensive
Misapplying an award can result in underpayments dating back to the relevant engagement period, together with interest, superannuation on eligible shortfalls, and civil penalties. Employers may need to reconstruct historical rosters, hours, allowances, overtime, and penalty rates. Since 1 January 2025, intentional underpayment of employee wages and entitlements can constitute a criminal offence under the applicable federal provisions, subject to the relevant legal requirements and exceptions.
Set-off, and why paying above the award is not enough
Paying above an award minimum does not automatically discharge every separate award obligation. Contractual arrangements must identify the entitlements a payment is intended to satisfy and operate consistently with the applicable award and legal requirements. The September 2025 Federal Court decision in the Woolworths underpayment litigation highlighted the risks of relying on broad set-off provisions or pooling over-award payments across pay periods. A salary can exceed the base award rate and still leave an underpayment if weekend penalties, overtime, shift loadings, or allowances are not properly accounted for.
The mechanisms that do work
Depending on the applicable award and circumstances, employers may use a compliant annualised wage arrangement with the required written terms, specified outer limits, appropriate time and recordkeeping processes, and reconciliation requirements. Other possible mechanisms include carefully drafted set-off clauses, individual flexibility arrangements, guarantees of annual earnings for eligible high-income employees, and enterprise agreements. Each mechanism has its own eligibility conditions and formal requirements, so it must be assessed before payroll begins rather than reconstructed after an underpayment is identified.
Superannuation and the payday cycle
Employers must calculate superannuation guarantee contributions on the applicable earnings base and meet the statutory payment deadlines. The transition to payday super is scheduled for 1 July 2026, replacing the previous quarterly contribution cycle. Employers should verify the commencement requirements, qualifying earnings, fund receipt deadlines, and applicable shortfall consequences against the legislation and current Australian Taxation Office guidance before configuring payroll.
PAYG withholding and Single Touch Payroll
Employers generally withhold income tax from employee payments under the applicable Australian Taxation Office rules and report payroll information through Single Touch Payroll. Reporting requirements distinguish relevant income and payment components, withholding, and superannuation information. Correct employee declarations, tax scale selection, payroll coding, and reporting processes help prevent discrepancies between payroll records and tax reporting.
Payroll tax, workers compensation, and long service leave
Payroll tax, workers compensation, and long service leave involve state and territory requirements. Payroll tax thresholds and rates differ by jurisdiction, and grouping provisions may aggregate related businesses. Workers compensation operates through jurisdiction-specific schemes with their own coverage and premium rules. Long service leave entitlements also depend on the applicable legislation, making state-specific administration important for distributed teams.
Casual employment and conversion
Changes to the statutory definition of casual employment and the pathway to permanent employment took effect in 2024. Casual employees generally receive a casual loading instead of paid leave entitlements associated with permanent employment, subject to the applicable rules. Employers must provide the required Casual Employment Information Statement and assess eligibility for a change to permanent employment under the current statutory framework.
Employee or contractor
The applicable statutory test considers the real substance and practical reality of the relationship, rather than relying on the contract alone. Sham contracting can attract penalties, and reclassification may result in backdated wages, superannuation, leave accruals, and award entitlements. Businesses should assess the actual working arrangement before engagement and revisit the classification if the relationship changes.
Notice, redundancy, and unfair dismissal
Notice under the National Employment Standards generally increases with length of service, with an additional week for eligible employees aged over 45 who have completed at least two years of service. Redundancy pay follows a statutory scale, subject to eligibility rules and exclusions, including certain small business employers and employees with less than one year of service. Unfair dismissal claims are subject to minimum employment periods and other eligibility requirements. The high-income threshold does not automatically remove protection where an employee is covered by a modern award or enterprise agreement.
General protections
Separate from unfair dismissal, the Fair Work Act prohibits adverse action for reasons including the exercise of workplace rights, industrial activities, and protected attributes. General protections can apply regardless of the minimum employment period required for an unfair dismissal claim. In relevant proceedings, the employer may bear the burden of proving that the action was not taken for a prohibited reason, and available remedies can include compensation and other court-ordered relief. Employers should assess general protections risks independently when making employment decisions.
The Australian Mistake That Can Cost Employers the Most
Paying well above the award does not, by itself, satisfy every award entitlement.
A generous salary does not automatically cover separate obligations for weekend penalties, overtime, shift loadings, and allowances. For a payment to discharge an award obligation, the applicable legal and contractual requirements must be satisfied, and the arrangement must account for the relevant entitlement.
The September 2025 Federal Court decision in the Woolworths underpayment litigation highlighted the limitations of contractual set-off arrangements and the risks of treating over-award payments as a general pool that can absorb shortfalls across pay periods. Employers should not assume that an annual salary above the award minimum eliminates underpayment exposure, particularly where employees work irregular rosters, weekends, or overtime.
The practical answer is to choose a mechanism suited to the award and workforce. Depending on eligibility, this may involve an award-based annualised wage arrangement with required limits, records, and reconciliation; a carefully drafted set-off clause that identifies the entitlements being satisfied; an individual flexibility arrangement; a guarantee of annual earnings for an eligible high-income employee; or an enterprise agreement.
These are formal compliance mechanisms, not assumptions. The arrangement should be assessed before the first payslip, monitored throughout employment, and updated when duties, rosters, award coverage, or applicable legal requirements change.
Employer of Record Coverage Across Australia
Australia is a federation, and employment compliance reflects that structure. The Fair Work system establishes national employment standards, while payroll tax, workers compensation, and long service leave involve state and territory requirements. Komp helps coordinate these obligations so a team spread across several jurisdictions can operate through one workforce relationship.
Employer of Record in Sydney and New South Wales
Australia's largest commercial centre and one of its deepest professional talent markets, covering financial services, technology, professional services, and the Australian or regional headquarters of multinational businesses.
Employer of Record in Melbourne and Victoria
A major commercial centre with strengths in technology, health and biotechnology, education, manufacturing, and an active startup ecosystem.
Employer of Record in Brisbane and Queensland
A growing market supported by infrastructure investment, resources, agriculture, and tourism, alongside an expanding technology sector and opportunities across a range of professional services.
Employer of Record in Perth and Western Australia
A major resources and energy centre with deep mining, engineering, and project services capabilities, as well as a time zone that aligns with parts of Asia.
Employer of Record in Adelaide, Canberra, and the smaller markets
Adelaide supports defence, space, and advanced manufacturing; Canberra has a strong government and public-sector ecosystem; and Hobart and Darwin serve specialised industries and regional markets. Each location may involve different state or territory requirements for payroll tax, workers compensation, and long service leave.
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