Looking for a PEO in Australia? Here’s what you need to know

A guide to working with PEOs in Australia.

An image of the Sydney opera house and the words "PEO in Australia"

These days, it's no longer necessary to limit your hiring to a strictly defined geographic market. Thanks to modern communication and collaboration tools, teams can work together across distances—meaning hiring managers and HR leaders can look further afield when sourcing talent.

If your company is considering hiring across borders, Australia is one country you might want to look at. The Land Down Under has a well-educated, skilled workforce of predominantly native English speakers, which is a big plus if your shared company language is English.

Before you start hiring, do your due diligence regarding Australia's labor laws. Regulations surrounding details like parental leave and minimum holiday requirements vary between countries, so it's important to always familiarize yourself with the local legislation before hiring in another jurisdiction.

A professional employer organization (PEO) can help you address both legal and practical concerns. A PEO is an HR outsourcing company that partners with businesses to co-employ and manage staff, subsequently sharing the liability for those employees. This shared liability distinguishes a PEO from an employer of record (EOR), which acts as the sole legal employer on a company's behalf and thus assumes full liability for employees.

Working with an Australian PEO can minimize liability risks and streamline hiring. Learn more about hiring in Australia and discover how a PEO can simplify the process below.

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A few things to know about hiring in Australia

Every country has its own rules and regulations governing employer-employee relationships. If you want to hire in Australia, you'd typically first need to establish a legal business entity in the country or, if you plan to operate in the country long-term, create a subsidiary and incorporate it with the Australian Securities and Investments Commission (ASIC).

All employment contracts in Australia must be written in English, and certain terms need to be addressed in the contract. In general, the standard Australian workweek is 38 hours. Any additional hours must be pre-negotiated between the employer and the employee.

As an employer in Australia, note that you'll be legally required to contribute to an employee pension fund at a rate of at least 11.5%. Although additional contributions are permitted, they aren't mandatory.

Australia also has strict rules governing notice periods. The length of the notice period depends on how long someone has been working for you. If the employee has been with the business for less than one year, for example, the notice period is one week. In contrast, if the employee has been with the business for one to three years, it's two weeks. The notice period is longer depending on the length of service.

IP protection and non-compete agreements are other considerations when drafting employee contracts. For example, if a non-compete clause is included after an employee's original offer of employment is made, it may be compensated with a salary increase or bonus.

Other considerations to take into account include points like retirement benefits, health insurance, and parental leave. For example, in Australia, parents are entitled to 22 weeks of paid parental leave, as well as 52 weeks of unpaid leave in which their jobs remain protected.

To learn more, check out our comprehensive guide to hiring employees in Australia.

Working with a PEO in Australia

A PEO can simplify hiring in Australia and reduce the administrative burden by co-employing individuals with your company. Although PEO services vary depending on the provider, you can generally expect them to address the following:

  • Compliance issues: A PEO will usually have its own in-house team of experts on everything from labor laws to tax regulations. This provides a wealth of knowledge you can tap into, ensuring you don't run afoul of any local legislation.
  • Hiring and onboarding: Some PEOs will manage the hiring process for you, sourcing local talent in line with relevant legal requirements. A PEO can even take care of onboarding practicalities, like getting employee payments and technology set up.
  • Payroll and benefits: Processing payroll is a tedious task that can take up valuable HR time. A PEO can take care of payroll for you and also manage benefits like dental and retirement coverage.

When selecting an Australian PEO, the first step is to make sure it offers the services you need. Consider your primary concerns, whether it's labor law compliance or a desire to improve benefits and compensation management.

PEO accreditation is another point to consider, but it isn't enough to tell you what the customer experience is like when working with a PEO. That's why we also recommend requesting references from other customers who have worked with the PEO. You can ask the PEO directly for references. Any reputable provider should be happy to provide these.

Cost is also a consideration when selecting a PEO. While working with a PEO will probably reduce your operating costs in Australia, it can still be costly. Ask how the PEO's fees are structured, keeping in mind that this will add to your overall costs of hiring employees in Australia.

PEO alternatives: Simplify hiring in Australia with Oyster

Although a PEO can help reduce costs, save time, and bring peace of mind, using a PEO also has drawbacks. For one thing, you’ll still need a local entity in Australia to co-employ staff with a PEO there. Additionally, the PEO doesn't fully relieve you of all legal liability—and, while it can take on a lot of administrative tasks, it can't completely replace your HR department. 

You might also consider working with an employer of record in Australia, which would take on full legal responsibility for hiring employees on your behalf. However, if you’re planning to hire in multiple countries, this would mean looking for local EOR partners in each location, which can be tedious and time-consuming.

A better alternative for hiring in Australia (and around the world) is to work with a global employment platform like Oyster. Our end-to-end, automated global employment solution can help you hire in over 180 countries worldwide, providing pre-populated statutory terms and legal-reviewed agreements to ensure compliance. You’ll also benefit from deep local intelligence and insights, and can make decisions with confidence using our suite of global employment tools. Oyster takes care of compliance, payroll, benefits, and more—so you can focus on your team.

Learn more about how Oyster can transform your global talent strategy.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. We let growing companies give valued international team members the experience they deserve, without the usual headaches and expense of hiring abroad.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll and great local benefits and perks.

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