Hiring your first employee is a major milestone — and it comes with legal obligations that start before their first day. Here's what you need to have in place.
First, register as an employer with the ATO for PAYG withholding. You'll need to withhold tax from employee wages and remit it to the ATO via your BAS. Register at business.gov.au or through your tax agent.
Determine whether the person is an employee or contractor (see our guide on employee vs contractor). This distinction affects tax, super, leave entitlements, workers' compensation, and Fair Work protections. Getting it wrong is called sham contracting and carries penalties up to $93,900 per contravention for individuals.
Set up a compliant employment contract covering: position title and duties, pay rate (must meet or exceed the relevant Modern Award minimum), hours of work, leave entitlements, notice period, and any probation period. The Fair Work Ombudsman's online tools can help you identify the correct Award.
You must pay superannuation guarantee (currently 11.5% of ordinary time earnings) and from 1 July 2026, super must be paid on payday — not quarterly. You also need workers' compensation insurance (mandatory in every state/territory) and must comply with WHS obligations.