What is an Employer of Record (EOR) in Australia?

An Employer of Record (EOR) is a third-party organisation that becomes the legal employer of workers on behalf of another company. The EOR handles all employment-related responsibilities including payroll, tax withholding, superannuation, workers' compensation, and compliance with Australian employment laws. This allows foreign companies to hire Australian employees without establishing a local entity. The EOR is the employer on paper, while your company maintains day-to-day management of the workers' tasks and activities.

Why would a foreign company use an EOR in Australia?

Foreign companies use EOR services to: quickly hire Australian talent without waiting for entity setup (which can take weeks), test the Australian market before committing to a full subsidiary, employ small teams where the cost of entity maintenance exceeds EOR fees, avoid the complexity of Australian employment law compliance, reduce administrative burden of payroll and HR, access local expertise on awards and employment conditions, and scale up or down flexibly without entity restructuring. Aus Business Register's EOR service enables foreign companies to have employees working in Australia within days.

How much does an EOR service cost in Australia?

EOR costs in Australia typically range from $600 to $1,500 per employee per month, depending on service levels and volume. This usually includes: payroll processing, tax and super compliance, employment contracts, basic HR support, and statutory leave management. Additional services like visa sponsorship, expense management, or benefits administration may incur extra fees. While EOR appears more expensive than direct employment, total costs are often comparable when considering the avoided costs of entity setup, accounting, compliance, and administration.

What is the difference between EOR and a staffing agency?

Key differences include: an EOR employs workers you've selected for long-term roles with your company, while staffing agencies provide temporary workers from their own talent pool. With EOR, you recruit and manage performance; the EOR handles employment administration. EOR workers integrate into your team and culture; agency temps typically work on short-term assignments. EOR relationships are ongoing; staffing is project-based. Aus Business Register's EOR service lets you build your Australian team with your chosen candidates under your management.

Can an EOR sponsor work visas in Australia?

Yes, some EOR providers can sponsor work visas for foreign workers. However, this requires the EOR to be an approved sponsor with the Department of Home Affairs and meet Standard Business Sponsor obligations. Not all EOR providers offer this service. Visa sponsorship through an EOR typically involves additional fees and requires the EOR to demonstrate genuine need for the position. Aus Business Register can facilitate visa sponsorship for EOR employees through our approved sponsor arrangements, enabling you to bring key international talent to Australia.

What employment laws does an EOR handle in Australia?

An EOR manages compliance with all Australian employment laws including: Fair Work Act 2009 requirements, National Employment Standards (NES), applicable Modern Awards or Enterprise Agreements, superannuation guarantee obligations (currently 11.5%), PAYG tax withholding, workers' compensation insurance, workplace health and safety laws, anti-discrimination legislation, unfair dismissal protections, and state-specific requirements like payroll tax and long service leave. This comprehensive compliance management protects your company from employment law breaches and associated penalties.

How long can employees be engaged through an EOR?

There is no legal time limit on how long employees can be engaged through an EOR in Australia. However, practical considerations include: EOR may become less cost-effective than establishing your own entity as headcount grows (typically 10+ employees), tax authorities may scrutinise long-term arrangements for permanent establishment implications, and employees may prefer direct employment for career progression. Many companies use EOR as a stepping stone, transitioning employees to direct employment once they establish an Australian entity.

What happens to employees if we want to establish our own Australian entity later?

When transitioning from EOR to your own entity, employees are typically transferred through a process that: preserves their continuity of service for statutory entitlements, maintains accrued leave balances, updates their employment contracts to the new employer, transfers superannuation arrangements, and ensures no break in employment occurs. Aus Business Register can assist with this transition, coordinating the timing of employee transfers with your new entity setup to ensure a smooth handover with minimal disruption to your team and operations.

Quick Answer

An Employer of Record (EoR) lets foreign companies hire Australian employees without establishing a local entity. The EoR becomes the legal employer for tax, superannuation (12%), and Fair Work purposes while you control day-to-day work. Setup takes 1–5 business days from $500/employee/month. Includes employment contracts, PAYG withholding, workers’ compensation, and Modern Award compliance. Sham contracting penalties reach $19,800 per breach — proper EoR structure eliminates this risk.

Employer of Record (EOR) Services

Expanding your business into Australia no longer requires the complexity and expense of establishing a local entity. AU Business Register’s Employer of Record (EOR) services enable international companies to hire Australian talent quickly, legally, and compliantly. As your trusted EOR partner, we become the legal employer of your Australian workforce while you maintain complete operational control. From employment contracts and payroll processing to superannuation and tax compliance, we handle every aspect of Australian employment law so you can focus on growing your business in one of the Asia-Pacific region’s most dynamic markets.

What is an Employer of Record (EOR)?

Definition

An Employer of Record is a third-party organisation that serves as the official legal employer for your workforce in a foreign country. The EOR assumes all statutory employer responsibilities, including payroll, tax compliance, benefits administration, and adherence to local employment legislation. This arrangement allows foreign companies to hire employees in Australia without the need to register a subsidiary, branch office, or any other form of local business entity.

How It Works

The EOR model creates a co-employment relationship that benefits all parties involved. AU Business Register employs your chosen candidates on your behalf, handling all legal and administrative employer obligations. Meanwhile, you retain full control over the employee’s day-to-day work activities, project assignments, performance management, and professional development. The employee works exclusively for your organisation under your direction, while we ensure complete compliance with Australian employment law.

Legal Employment Structure

Under Australian law, AU Business Register becomes the employer of record for tax, superannuation, and workers’ compensation purposes. We execute compliant employment contracts, register employees with the Australian Taxation Office (ATO), manage superannuation contributions through authorised funds, and maintain appropriate workers’ compensation insurance coverage. This structure provides your employees with the same protections and entitlements as any other Australian worker while shielding your organisation from compliance risks.

Why Use an EOR in Australia?

No Local Entity Needed

Establishing a company in Australia involves complex registration requirements, ongoing compliance obligations, and significant administrative overhead. With our EOR services, you can hire Australian employees immediately without registering with ASIC, obtaining an Australian Business Number (ABN), or navigating the intricacies of corporate governance requirements. If you later decide to establish a permanent presence, our company formation services make the transition seamless.

Fast Market Entry

Time-to-hire is critical when expanding into new markets. Traditional entity establishment can take several months, whereas our EOR solution enables you to onboard employees within days. This rapid deployment capability allows you to capture market opportunities, respond to client demands, and test the Australian market before committing to a permanent corporate structure.

Compliance Handled

Australian employment law is comprehensive and strictly enforced. The Fair Work Act 2009, National Employment Standards, Modern Awards, and state-based regulations create a complex compliance landscape. Non-compliance can result in substantial penalties, reputational damage, and legal liability. Our team of employment law specialists ensures your workforce operations meet every regulatory requirement, protecting both your organisation and your employees.

Cost-Effective

The costs associated with establishing and maintaining an Australian entity extend far beyond initial registration fees. Ongoing accounting, tax filing, director obligations, and administrative requirements create substantial overhead. Our EOR services consolidate these costs into a predictable monthly fee, eliminating surprise expenses and enabling accurate budget forecasting for your Australian operations.

Our EOR Services Include

Employment Contracts

We draft and execute fully compliant employment contracts tailored to each employee’s role, industry, and applicable Modern Award. Our contracts address all mandatory terms including position details, remuneration, working hours, leave entitlements, termination provisions, and confidentiality obligations. Each contract is reviewed to ensure alignment with current legislation and best practice standards.

Payroll Processing

Our comprehensive payroll services ensure your employees are paid accurately and on time, every pay cycle. We calculate gross and net pay, process allowances and deductions, generate compliant payslips, and maintain detailed payroll records. Our systems integrate with Single Touch Payroll (STP) for seamless ATO reporting, ensuring real-time compliance with Australian tax obligations.

Superannuation (12%)

Australian employers must contribute a minimum of 12% of ordinary time earnings to employees’ superannuation funds (as of 2025-26, remaining at the final rate of 12%). We manage the entire superannuation process, including fund selection compliance, contribution calculations, quarterly payments to employee-nominated or default funds, and SuperStream reporting requirements.

PAYG Withholding

Pay As You Go (PAYG) withholding requires employers to deduct income tax from employee payments and remit these amounts to the ATO. We calculate withholding amounts based on current tax tables, employee declarations, and any applicable offsets. All PAYG obligations are reported through Single Touch Payroll and reconciled annually via payment summaries.

Workers Compensation

Workers’ compensation insurance is mandatory in all Australian states and territories. We maintain appropriate coverage for all employees under our EOR arrangement, managing policy procurement, premium payments, and claims administration. Our coverage ensures employees receive statutory benefits in the event of workplace injury or illness while protecting your organisation from liability exposure.

Leave Management

Australian employees are entitled to various forms of leave under the National Employment Standards and applicable Modern Awards. We track and manage annual leave, personal/carer’s leave, compassionate leave, parental leave, long service leave, and public holidays. Our systems maintain accurate leave balances and ensure proper payment calculations for all leave types.

Australian Employment Compliance

Navigating Australian employment law requires specialist knowledge and constant vigilance. Our HR compliance services ensure your workforce operations meet all regulatory requirements.

Fair Work Act 2009

The Fair Work Act is the primary legislation governing employment relationships in Australia. It establishes minimum employment conditions, unfair dismissal protections, workplace rights, and industrial action frameworks. Our compliance protocols ensure all employment practices align with Fair Work requirements, reducing the risk of disputes, claims, and regulatory penalties.

National Employment Standards (NES)

The NES comprises 11 minimum entitlements that apply to all employees covered by the national workplace relations system. These include maximum weekly hours, flexible working arrangements, parental leave, annual leave, personal leave, community service leave, long service leave, public holidays, notice of termination, redundancy pay, and the Fair Work Information Statement. We build these entitlements into every employment arrangement we manage.

Modern Awards

Modern Awards set minimum pay rates and conditions for employees in specific industries or occupations. Australia has over 120 Modern Awards, each containing detailed provisions regarding classification structures, wage rates, allowances, overtime, and penalty rates. Our team identifies the applicable Award for each employee and ensures all remuneration and conditions meet or exceed Award minimums.

EOR vs Establishing Your Own Entity

Choosing between an EOR arrangement and establishing your own Australian entity depends on various factors including timeline, budget, headcount, and long-term strategic plans.

Factor	Employer of Record	Own Entity
Setup Time	1-5 days	4-12 weeks
Initial Costs	Low (service fees only)	High (registration, legal, accounting)
Ongoing Administration	Minimal (handled by EOR)	Significant (directors, compliance, reporting)
Compliance Risk	Transferred to EOR	Retained by your organisation
Scalability	Highly flexible	Fixed overhead regardless of headcount
Best For	1-50 employees, market testing, project-based work	50+ employees, permanent presence, strategic investment

When to Transition

Many clients begin with our EOR services and later transition to their own entity as their Australian operations mature. We recommend considering entity establishment when your headcount exceeds 50 employees, when you require direct customer contracts with Australian government agencies, or when your strategic plan includes significant capital investment in Australian assets. Our company formation team can manage this transition while ensuring continuity for your existing employees.

Industries We Serve

Technology

Australia’s technology sector offers exceptional talent and a favourable business environment. We support global technology companies in hiring software developers, engineers, product managers, and technical specialists across all Australian states. Our understanding of tech industry Award classifications and common remuneration structures ensures competitive and compliant employment packages.

Professional Services

International consulting firms, accounting practices, legal services, and financial institutions leverage our EOR services to establish Australian client service capabilities without local entity overhead. We accommodate the unique requirements of professional services employment, including variable bonus structures, professional development allowances, and flexible working arrangements.

Mining and Resources

Australia’s mining and resources sector attracts significant international investment. Our EOR services support exploration companies, mining contractors, and resource services providers in engaging Australian personnel for project-based and permanent roles. We have particular expertise in remote work arrangements, fly-in-fly-out (FIFO) employment structures, and the specific Modern Awards applicable to the mining industry.

Onboarding Process

Timeline

Our streamlined onboarding process enables rapid employee deployment:

Day 1: Service agreement execution and employee details submission
Day 2-3: Employment contract drafting and compliance review
Day 3-4: Employee contract execution and tax file number declaration
Day 4-5: Superannuation fund setup and workers’ compensation registration
Day 5: Employee commences work

Requirements

To commence an EOR engagement, we require the following information:

Employee personal details and contact information
Position title and job description
Proposed salary package and any additional benefits
Working hours and location arrangements
Reporting structure and manager contact details
Preferred start date
Any specific contractual terms or conditions

Frequently Asked Questions

What is the minimum contract duration for EOR services?

We offer flexible engagement terms starting from a minimum of three months. This accommodates both project-based requirements and ongoing permanent employment arrangements. Shorter durations may be available for specific circumstances upon discussion with our team.

Can you employ contractors as well as employees?

Our EOR services are designed specifically for employment relationships. Australian law distinguishes clearly between employees and independent contractors, with misclassification carrying significant penalties. We can advise on appropriate engagement structures based on the nature of the work relationship and connect you with contractor management solutions if appropriate.

How do you determine the applicable Modern Award?

Modern Award coverage depends on the industry in which the employer operates and the type of work performed by the employee. Our compliance team analyses both factors to determine Award applicability. Some employees may be Award-free, particularly those earning above the high-income threshold or performing work not covered by any Award. We provide detailed Award coverage advice as part of our onboarding process.

What happens if an employee resigns or needs to be terminated?

We manage all aspects of employment cessation in compliance with Australian law. This includes providing or processing notice periods, calculating final entitlements including accrued leave, preparing employment separation certificates, and ensuring superannuation contributions are finalised. For terminations, we advise on procedural fairness requirements to minimise unfair dismissal risk.

Can employees work remotely from different states?

Yes, we support employees working from any Australian state or territory. We ensure appropriate workers’ compensation coverage for their work location, applicable public holiday entitlements, and compliance with any state-specific requirements. Employees can also work across multiple states, with our systems tracking location for compliance purposes.

How are employee benefits and allowances handled?

Beyond mandatory entitlements, we can incorporate additional benefits into employment packages as directed by you. Common additions include private health insurance allowances, professional development budgets, technology allowances, and enhanced leave provisions. We ensure all benefits are structured tax-efficiently and documented appropriately in employment contracts.

What reporting do you provide?

Clients receive comprehensive monthly reports including payroll summaries, leave balance statements, superannuation contribution records, and cost breakdowns. We also provide real-time access to our client portal where you can view employee information, approve leave requests, and access historical documentation. Custom reporting is available upon request.

Is there a limit to how many employees you can manage?

No, our EOR services scale to accommodate organisations of any size. We currently support clients with single employees through to those with substantial Australian workforces exceeding 100 personnel. Our infrastructure and processes are designed for scalability, ensuring consistent service quality regardless of headcount.

Start Hiring in Australia Today

Ready to expand your team into Australia without the complexity of entity establishment? Contact AU Business Register today to discuss your requirements and receive a customised EOR proposal. Our team is ready to help you navigate Australian employment law and onboard your first Australian employee within days.

Get Your Free EOR Consultation

Related Services

Foreign companies often combine this service with:

HR Compliance Services – Employment law compliance and Fair Work Act guidance
Payroll Services – Compliant Australian payroll processing and STP reporting
Company Formation Services – Complete Australian company registration and incorporation
Virtual Office Address – Professional business address in major Australian cities

Pricing

From $599/mo (management fee only)

Hire employees in Australia without establishing a legal entity. We handle payroll, tax, super, and compliance.

What's included:

✓Legal employer of record
✓Payroll processing & tax compliance
✓Superannuation management
✓Fair Work Act compliance
✓Employee onboarding

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All prices in AUD. Foreign company services are GST-free. Government fees additional where applicable.

James Carey, CA CTA JP

Chartered Accountant and Chartered Tax Adviser with over 15 years experience in Australian employment law, visa requirements, and workplace compliance. James is the Director of Australian Business Register and a Justice of the Peace in NSW.

Last reviewed: March 2026 • ABN: 76 646 626 806 • ASIC Registered Agent

Official Sources & References

Disclaimer: This content is general information only and does not constitute legal, financial, or tax advice. While we strive to keep information accurate and up to date, laws and regulations change frequently. For advice specific to your circumstances, please consult a qualified professional adviser.