Australia Expansion Guide
Global Upside helps companies set up, hire, and operate in Australia. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in Australia without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.
Australia is the sixth-largest country globally and is known as the “island continent” as it is relatively isolated from the rest of the world. Australia’s economy emerged from the 2009 recession with minimal damage and has consistently ranked among the affluent nations in terms of per capita income.
A proprietary company requires a maximum of 50 investors. It is an independent legal entity where the liability of the investors is limited to their shared contributions. The board of directors is in control of the general management of the company.
A public company is an establishment that requires at least one investor, and their liability is limited to their shared contributions. Shares are fit for trading and offered to the public, and the entity must comply with the requirements of the Corporations Act.
A branch is an establishment that requires registration with the Australian Securities and Investments Commission (ASIC). The parent company is liable for all actions of the branch office. The branch must also have one local agent who will bear all responsibility if there are any violations of the Corporations Act.
In Australia, an employment contract can be either in writing or verbal.
An employment contract must meet the legal minimum set out in the National Employment Standards (NES) or in any awards, enterprise agreements, or other registered agreements that may apply. Thus, irrespective of whether they have signed a contract, all employees are covered by the NES.
Some of the details typically mentioned in the written contract include:
- The type of employment
- Working hours
- and more
The different types of employment relationships are:
- Permanent Employment – Permanent employees in Australia are employed on an ongoing basis until the employment agreement is abolished by either the employer or the employee. Permanent employees can work full-time or part-time, depending on their schedule. Permanent employees are entitled to a variety of benefits.
- Fixed-Term Contracts – A fixed-term contract is for a specific duration of employment, and the employees can usually work full-time or part-time. Whether full-time or part-time, fixed-term employees are generally entitled to the same wages, penalties, and leave as permanent employees.
- Temporary Employment – Casual employees are temporary employees in Australia. A casual employee is someone who accepts a job offer from an employer knowing that there is no firm advance commitment to continuing work with an agreed-upon structure of work. They can terminate employment without notice unless a registered agreement, award, or employment contract requires it.
At the onset of employment, employers determine the length of the probationary period, which can vary from a few weeks to a few months.
In Australia, the average workweek is 38 hours. Awards, certified agreements, and Australian Workplace Agreements typically include regular working hours, rest breaks, overtime, and penalty rates.
Employees in Australia are entitled to the following leaves:
- Annual leave – Full-time and part-time employees in Australia are entitled to at least four weeks of paid annual leave. Shift workers are entitled to 5 weeks of paid vacation every year. Casual employees are not permitted to take annual leave.
- Maternity leave – Female employees may begin their break up to 6 weeks before the expected delivery date.
- Sick leave – Sick and carer’s leave are part of one entitlement in Australia. Full-time employees are entitled to ten days of vacation per year.
- Paternity leave – Also known as Dad and Partner Pay, is provided to eligible employees in Australia for two weeks. Employees may be eligible for up to 18 weeks of paid parental leave if they meet specific qualifications.
The following are the statutory national holidays observed in Australia:
- January 1 – New Year’s Day
- January 26 – Australia Day
- April 2 – Good Friday
- April 5 – Easter Monday
- April 25 – ANZAC Day
- December 25 – Christmas Day
- December 26 – Boxing Day
The retirement income system in Australia consists of three parts:
- A means-tested Age Pension supported by public tax money.
- Compulsory employer contributions to private superannuation funds provide a superannuation guarantee.
- Voluntary pension contributions and other personal savings; retirement savings are encouraged by tax reductions.
State benefits granted to residents of Australia are called social security (welfare) in Australia. Social security is a non-contributory scheme funded through general taxes (although there is a specific fee for Medicare).
The core beneficiaries of social security are the elderly and disabled, single parents, families with children, unemployed people, and people who are sick or have a specific need.
Some examples of social insurance programs are:
- Dependents’/Survivors Benefit – Widow Allowance is a means-tested benefit that is paid every two weeks in Australia. On July 1, 2018, Widow Allowance was closed to new applicants, and it will be phased off entirely on January 1, 2022. Family tax benefit legislation may also provide further aid to families.
- Life and Disability Insurance/Benefit – The Australian Social Security System provides disability payments in the form of the Disability Support Pension to persons under retirement whose income has fallen below the cut-off limit, which varies depending on age and family status to a chronic disability. Basic pension, mobility allowance, medical aid, and other benefits are available.
The following are examples of other statutory benefits:
- Birth Allowance
- Child Allowance
Employers in Australia are required to provide employees with the following notice periods based on their continuous service:
- Employment of 1 year or less – 1 week
- Employment of 1 to 3 years – 2 weeks
- Employment of 3 and 5 years – 3 weeks
- Employment of more than 5 years – 4 weeks
Employees over 45 who have worked with the same employer for at least two years are entitled to an extra week of notice.
Visa/ Work Permits
In Australia, typically, the following visa categories are available:
- Visitor visas
- Studying and training visas
- Family and partner visas
- Working and skilled visas
- Refugee and humanitarian visas
- Other visas
Generally, there are two types of work visas available in Australia:
- Temporary work visas – Temporary work visas usually require skilled workers where employers cannot find an adequately skilled Australian worker and allow for up to four years of stay.
- Permanent work visas – Employers typically nominate permanent work visas, which can be regional or allow for work anywhere in Australia.
Most employees are paid monthly, biweekly, or weekly via electronic funds transfer, paper check, or cash.
Accounting standards must adhere to the Australian equivalent of International Financial Reporting Standards (A-IFRS). It is necessary to prepare annual financial reports.
The standard corporate tax rate is 30%.
Value Added Tax (VAT)
Goods and Services Tax (GST), an equivalent to value-added tax (VAT), applies at each level in the supply chain.
The standard GST rate in Australia is 10%. It applies to most goods and services.
Typically, firms with June 30 year-ends are due to file tax returns on January 15 for big and medium-sized businesses (annual turnover surpassing AUD 10 million) and February 28 for other companies following the end of the financial year.
Significant global entities (SGEs) face penalties for late filing up to 100 times higher than large entities.
The 1988 Privacy Act regulates the protection of individuals’ privacy and handles personal data and information. Additionally, there are many other Federal and State Acts that govern privacy law.
Effective May 25, 2018, Australian businesses of all sizes had to comply with GDPR if they have a business in the European Union (EU), offer goods and services in the EU, or supervise the conduct of individuals in the EU.
Anti-Bribery & Anti-Corruption Law
The Criminal Code Act 1995 prohibits bribery in Australia. The penalties include imprisonment and a monetary fine.