How to Hire Staff for Your Small Business in Australia

Recruiting employees is perhaps the most important move in business growth. In Australia, hiring staff isn’t just about finding the right people; you’re also stepping into a whole new world of money and legal stuff. If you get it right from the beginning, you’ll stay on the right side of the law, avoid headaches down the road, and set yourself up for real growth.

Here’s what small business owners need to know before bringing someone on board. We’ll cover everything from workplace laws and payroll basics to choosing the right tools for paying staff and handling superannuation.

Table of contents
Things to know before hiring the first employee Step-by-step guide Paying remote staff with Wise Business FAQs

Things to know before hiring the first employee

Hiring your first employee fundamentally changes the way your business works. With the chance to expand comes a fresh batch of legal and financial responsibilities you'll need to encounter. From enrolling with the ATO for payroll tax to Modern Awards and superannuation obligations, there's preparation to be done before you post the job.

Below are a few things to know and implement before employing the first employee.

1. Identifying employee requirements

Employee Type:

• Full-time employees work a standard 38-hour week with full benefits.
• Part-time staff also work regular hours, but on a reduced schedule with pro-rata entitlements.
• Fixed-term staff are hired for a specific period or project.
• Casual employees work variable hours and receive a higher hourly rate instead of standard leave entitlements.
• Finally, trainees and apprentices combine paid work with formal training under a registered agreement.

Number of employees: Take into account how many employees your business can afford in terms of workload and budget. Too many can drive up the costs, but too few can affect the quality of service.

Working pattern and flexibility: Specify when and on what terms work is to be done. There may be traditional hours for some jobs, while others may be part-time, home-based, or flexible.

Skills and responsibilities: Define the key tasks, required skills, and desired outcomes. Clearly defined job descriptions simplify performance measurement and link work tasks to business goals.

Employee or contractor status: Check whether the individual is an employee or contractor. This determines tax, super, and legal obligations. Holding an ABN or receiving invoices doesn't necessarily mean someone is a contractor.

Relevant award or agreement: Determine what industry award¹ or registered agreement is relevant to the position of the candidate. Awards specify minimum pay rates, hours, and conditions. More extensive workplaces will have registered agreements endorsed by the Fair Work Commission. Check out the complete list of awards on the Fair Work Commission website².

Pay rates and information documents: Ensure the pay rate advertised is at or above the Fair Work Act and applicable award. Payment below this may lead to compliance problems or fines.

2. Legal obligations as an Australian employer

Before hiring your first employee, your business needs to be set up to meet key legal and tax requirements. Doing this early keeps payroll accurate, taxes on track, and your records compliant with ATO rules³.

Establish access to ATO Online Services: Enrol in the ATO's Online Services for Business via a Digital ID like myGovID and connect it through the Relationship Authorisation Manager (RAM) to manage payroll, PAYG, and super. Software like Wise Business can automate payroll by supporting regular salary payments and batched transfers from one account, even internationally.

Register for PAYG withholding: Required before the first pay run to withhold and report income tax, even if no amount is withheld.

Enable Single Touch Payroll (STP): Use STP-enabled software to automatically report wages, PAYG, and super each pay cycle.

Set up superannuation payments: Set up super payments by making Super Guarantee contributions through SuperStream. Pick a default super fund for any new team members while you’re at it.

Enrol for Fringe Benefits Tax (FBT): If you give out perks like cars or extra allowances, sign up for Fringe Benefits Tax so you’re covered with reporting and taxes. Don’t forget to check your payroll tax.

Review payroll tax liabilities: Some states make you register once your wages reach a certain amount, so look up the rules and thresholds for your area on business.gov.au.

3. Evaluate cost to business

Employment has direct and indirect costs. In addition to salary, companies need to factor in superannuation, insurance, training, and equipment costs. These on-costs provide a better picture of what having someone on staff will cost each month.

Pay must be at or above the award minimum rate for the applicable award or agreement. This ensures compliance with Fair Work regulations and payroll accuracy.

Other issues, such as bonuses, allowances, or employee benefits, may also influence the overall cost of employment and must be factored in when making budget arrangements.

4. Having a job description

A job description outlines the purpose of a role and how it will contribute to the company. It outlines the essential duties, necessary competencies, and degree of accountability, providing direction for hiring and overseeing.

Include the job title, primary duties, reporting structure, qualifications, and performance metrics when creating a job. A precise definition ensures uniformity and facilitates future evaluation of work output.

Step-by-step guide on hiring staff for small businesses

Want to hire staff for your small business? Below, we outline what you need to do.

1. Where to find the right employees

Small businesses may seek prospective employees through various means, depending on the experience level and the position required.

Australian job sites: Seek, Indeed, and Jora continue to be the first point of call for many small businesses across Australia. They enable you to post a vacancy in a broad number of industries, filter applicants by experience or location, and control applications in one place.

LinkedIn: A good choice for finding professional or specialized candidates. You can advertise job postings, screen profiles, and directly contact individuals who fit your company's needs. It can help enhance your company’s reputation as an employer in the long run.

Interns and graduates: Collaborating with local colleges, TAFEs, or structured internship programs can bring in enthusiastic students and recent graduates seeking hands-on experience. It's usually an inexpensive means of training future full-time staff.

Other sources: Local job boards, recruitment firms, and professional associations can attract individuals with specialized knowledge. Referrals by employees also tend to generate steady hires, as they are recommended by someone on the inside.

2. Shortlisting the ideal candidate

When applications come in, shortlist those that best suit the role's basic requirements. Keep it simple but orderly, sift through resumes, carry out focused interviews, and verify facts before arriving at a conclusion.

Look at their experience and skills. Does their background actually line up with what you need? Can they adapt if things change? Before you make an offer, check if they have the right to work in Australia. You can leverage the Department of Home Affairs VEVO tool for this.

If they need a licence or qualification, make sure it’s valid. If they’re still studying, see if you can organise the right training.

Don’t forget about references. Talk to their old bosses to see if they’re reliable and if they can work well with others. Pay attention to cultural fit, too. Check if their values and communication style click with your team.

3. Onboarding an employee

Onboarding is where a new hire officially becomes part of your business. It involves setting out clear employment terms, meeting legal obligations, and helping the employee adjust to their role.

Employment contract: Draw up a written contract in terms of pay, hours, responsibilities, and entitlement to leave. It has to satisfy the Fair Work Act and the applicable award or registered agreement. Give the Fair Work Information Statement (FWIS) and, in the case of casual employment, the Casual Employment Information Statement (CEIS) prior to commencement.

Benefits & responsibilities: Ensure that wages, leave, and benefits are at least at minimum levels and are in accordance with the employee's award classification. Explicitly lay out expected working time, chain of command, and primary responsibilities early to create performance expectations.

Tax and compliance: Get the employee's Tax File Number (TFN), set up Pay As You Go (PAYG) withholding, and enable Single Touch Payroll (STP) reporting before making their first payment.

Induction and training: Induct new starters in company policies, safety procedures, and carry out induction training to help them settle into work with ease.

Working hours and responsibilities: Explicitly lay out expected working time, chain of command, and primary responsibilities early to create performance expectations.

Handling payments and records: Punctual payment of superannuation and wages, and proper retention of payroll and employment records for a period of at least seven years.

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This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

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FAQs

1. What's the difference between a casual, part-time, and full-time employee in Australia?
Full-time staff usually work about 38 hours a week and are entitled to full leave. Part-time staff work shorter hours but are offered the same benefits on a pro-rata scale. Casual staff do not have any paid hours or leave, but are paid an increased hourly rate to compensate.

2. How much superannuation must I pay for my employees?
Employers must contribute at least 12% of an employee's regular time earnings to their superannuation fund from 1 July 2025⁴.

3. What is a probationary period, and how does it work?
A trial period is a fixed time, often three to six months, where employer and employee decide if the work is suitable. In the trial period, standard workplace rights hold, but termination and notice conditions can be less complicated.

4. Can I hire someone on an unpaid trial in Australia?
Unpaid trials⁵ are only lawful if the person isn’t doing productive work, such as when they’re demonstrating skills briefly. If they’re contributing to your business, even for a short period, they must be paid under the correct award.

5. Is it mandatory to get insurance for employees in Australia?
Yes. Employers in all states and territories are required to purchase workers' compensation insurance⁶ to cover their workers. This insurance pays a financial benefit, medical treatment, and rehabilitation if an employee is injured or becomes sick from their work. Every state and territory has its own workers' compensation scheme, so requirements for coverage might slightly differ.

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Sources:

1. Award
2. List of Awards
3. Legal Requirements (ATO)
4. Superannuation
5. Unpaid Trials
6. Insurance