A Simple Lesson if You’re New to Employing Staff
A simple lesson if you’re new to employing staff
Hiring your first employee is a major step for any business. Along with day‑to‑day management, employing staff introduces new legal, tax, and reporting obligations that need to be handled correctly from the start.
This guide provides a practical overview of the key areas new employers in Australia should understand.
Understanding employment obligations
Before employing staff, it’s important to be aware of Australia’s workplace laws. These set out minimum requirements around pay, leave, workplace conditions, and termination.
Most employees are covered by awards or enterprise agreements, which determine minimum pay rates and conditions. Employers should always confirm the correct award applies to their employees.
You can find official guidance at:
Fair Work Ombudsman – Workplace laws
Checking the right to work
Employers must ensure that employees have the legal right to work in Australia. Where applicable, visa conditions should be checked before employment begins.
Work rights can be verified using the government’s VEVO service:
Visa Entitlement Verification Online (VEVO)
Getting payroll set up correctly
Employing staff means setting up payroll systems to manage wages, tax withholding and superannuation.
Employers need to:
- register for PAYG withholding
- collect employee tax file number details
- set up payroll reporting
Most businesses use payroll software to support accurate calculations and reporting.
PAYG withholding and reporting
Employers are required to withhold tax from employee wages and report this information to the Australian Taxation Office (ATO).
This reporting forms part of an employee’s tax record and is used when they lodge their personal tax return.
More information can be found here:
Superannuation obligations
Eligible employees must receive superannuation contributions from their employer. Superannuation obligations are separate from wages and must be paid in line with current legislation.
Superannuation rates and requirements change over time, so employers should always check the latest information:
Single Touch Payroll (STP)
Most employers are required to report payroll information to the ATO each time employees are paid. This system is called Single Touch Payroll (STP).
STP links wages, tax withheld and superannuation information directly to the ATO.
Further details are available at:
Record‑keeping and insurance
Employers are required to keep accurate records relating to payroll, tax withheld, superannuation and employee details.
Workers’ compensation insurance is also required when employing staff. Requirements vary by state and territory.
Employers should check the relevant state authority for current requirements.
Getting the right support early
Employing staff introduces ongoing tax and compliance responsibilities. Getting advice early can help ensure systems are set up correctly and avoid issues as the business grows.
We assist businesses with payroll setup, employer registrations, Single Touch Payroll reporting and ongoing compliance.
You can learn more here:
Business accounting and advisory services
If you’re building your business from the ground up, you may also find our practical guide useful:
Starting a Business in Australia – practical guidance for new business owners
Once your business grows, you may also wish to refer to our more detailed guide on employing staff in Australia.