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1. Decide on the type of employee

Before you start, think carefully about your business needs and the type of employee that best meets them.

Work out what your business needs

Take some time to assess your needs so you can hire the right person for your business. Think about:

  • the tasks the employee will do or the problem you need them to solve
  • any skills and qualifications they need
  • how busy the job will be
  • how long you think you'll need someone for.

If you are unsure about the skills and qualifications you need, check the relevant award on the Fair Work Ombudsman website.

Each award includes classifications – descriptions of roles and the experience or qualifications someone needs for that role. You can usually find them towards the end of the award.

Checklist

  • Identify what you want the employee to do
  • Know what skills and qualifications they’ll need
  • Work out how often and how long you’ll need the employee to work

Decide on the employment type

Depending on the requirements of the job, you might want a:

  • full-time employee
  • part-time employee
  • fixed-term (non-ongoing) employee
  • casual employee
  • trainee or apprentice.

The type of worker you choose will affect your obligations to your employee and the government.

Read about different types of employees and their entitlements on the Fair Work Ombudsman website.

Learn more

Checklist

  • Work out what type of employee you need
  • Understand what this means for their entitlements

Know the difference between an employee and a contractor

You need to know whether your new worker is an employee or independent contractor. This will affect your tax, super and other obligations.

You’re responsible for classifying your worker correctly for tax and super purposes. There are many things to consider, and it's not as simple as whether they have an ABN or send invoices. If you get it wrong, you may face penalties and charges.

This guide covers hiring an employee. If you are looking for information on engaging an independent contractor, check out our hiring contractors page.

Learn more

Checklist

  • Make sure your new worker is an employee, not a contractor

2. Assess impacts and costs

Adding more staff can improve your business and profits. But it’s important to understand the potential costs and impacts as well.

Find pay rates and conditions

Most employees are covered by an award, which sets out the pay and conditions for a particular industry or occupation. It covers things like:

  • minimum pay rates
  • hours of work and rosters
  • breaks
  • allowances
  • penalty and overtime rates
  • leave.

The Fair Work Ombudsman website has a list of all awards. You can also use their pay and conditions tool to find the relevant award and work out what to pay your new employee under that award.

Some employees have special minimum wages in an award, like:

  • juniors
  • apprentices and trainees.

Employees who aren’t covered by an award or agreement are still entitled to:

  • a minimum wage
  • the National Employment Standards (NES), which include maximum working hours, leave entitlements and requirements around termination. Casual employees only get some NES entitlements.

Employees on probation get the same entitlements as other employees.

You must meet your obligations to employees under the relevant award and the NES. If you don’t, you may face penalties.

Businesses in Western Australia

If you’re in Western Australia, you may need to provide pay rates and conditions under the WA industrial relations system instead.

Learn more

Checklist

  • Know how much you’ll need to pay your employee
  • Understand the conditions and entitlements you must provide
  • Make sure your business can afford it

Know your super obligations

The super guarantee means you must pay an amount equal to 12% of your employee’s salary or wages into their superannuation fund.

You need to pay the super guarantee for:

  • all employees aged 18 years or older
  • employees under 18 if they work more than 30 hours in a week.

The super guarantee is paid in addition to your employee’s salary or wages – you can’t deduct it from their pay.

Learn more

Checklist

  • Work out how much super you’ll need to pay for your new employee
  • Make sure you can afford it

Know your tax obligations

You might need to pay some additional taxes after hiring an employee:

  • Payroll tax – you need to pay this tax if the total wages you pay is above a certain limit. The limit and tax rate are different in each state and territory.
  • Fringe benefits tax (FBT) – you might need to pay this tax if you give your employee benefits other than salary or wages. For example, a car they can use for private purposes.

These taxes are covered in more detail later in this guide.

Learn more

Checklist

  • Work out if you need to pay payroll tax or FBT for your new employee
  • Calculate how much this will cost you
  • Make sure you can afford it

Understand potential impacts on your workplace

You must provide a safe working environment for staff and protect their health and safety while at work. This might mean making changes to your workplace.

You must have workers compensation insurance and should consider public liability insurance.

You (or someone else in your business) will need to manage your new employee and their performance. Make sure you have the time and ability to do this properly. Find out about managing employee performance on the Fair Work Ombudsman website.

Learn more

Checklist

  • Understand your work health and safety obligations
  • Make any required changes to your workplace
  • Get workers compensation insurance
  • Decide who will manage the new employee

3. Recruit an employee

Get the best person for the job and sign a contract that complies with workplace laws.

Find the right candidate

To hire the right person for your business, take time to:

  • prepare a job description outlining the role, main responsibilities and the selection criteria you want candidates to address
  • advertise the position and promote it to your networks
  • evaluate applications against your selection criteria and make a shortlist
  • interview shortlisted candidates
  • choose the best candidate for the job.

Learn more

Checklist

  • Create a job description
  • Advertise the role
  • Shortlist applications
  • Interview candidates
  • Choose the best candidate

Don’t discriminate

Discrimination in the workplace is against the law. This includes discriminating against applicants during recruitment.

You must not discriminate against job applicants because of their:

  • race
  • colour
  • national extraction (place of birth or ancestry)
  • social origin (class, caste or socio-occupational category)
  • sex
  • gender identity
  • intersex status
  • sexual orientation
  • experience of family and domestic violence
  • age
  • physical or mental disability
  • marital status
  • family or carer’s responsibilities
  • pregnancy
  • breastfeeding
  • religion
  • political opinion
  • industrial activities (such as belonging to a trade union).

If you interview someone with disability, you may need to make adjustments so they can take part in the interview. Job Access has more information on interviewing people with disability. 

Learn more

Checklist

  • Understand the law around discrimination
  • Treat all candidates equally and assess them purely on their suitability for the job
  • Make any reasonable adjustments needed to interview someone with disability

Check the employee can work in Australia

Once you’ve found the right person, you’re responsible for making sure they can legally work in Australia.

Your new employee must either:

  • be an Australian citizen
  • have a visa that lets them work in Australia. This generally includes permanent residents and New Zealand citizens.

To check if (and how much) someone’s visa allows them to work, use the Department of Home Affairs' free online service.

Migrant workers, including working holiday makers and international students, have the same workplace rights and entitlements as other workers in Australia. This includes the same pay rates.

Learn more

Checklist

  • Make sure your new employee is allowed to work in Australia

Check licences and qualifications

Depending on your industry, your new employee may need specific licences or qualifications to do their job.

If they don’t have the correct licences or qualifications, consider providing training. This could mean hiring them as an apprentice or a trainee while they study for the qualifications.

Our industry information pages outline the main licence and permit requirements for common industries.

Learn more

Checklist

  • Identify any licences or qualifications your employee needs
  • Check if they have them
  • If they don't, plan to provide training

Make an offer and sign the contract

Once you’ve chosen a new employee, it’s time to give them the good news. You’ll also need to create an employment contract that you’ll both sign.

If you’re employing your new worker under an award, use our employment contract tool to create a contract and letter of offer that:

  • are tailored to your business
  • comply with workplace laws.

Once your new employee has accepted the offer, let your other applicants know they were unsuccessful this time.

Learn more

Checklist

  • Create an employment contract and letter of offer
  • Sign the contract and letter of offer
  • Give the contract and letter of offer to your new employee to sign

4. Prepare for your new employee

Introduce your employee to their role, rights and responsibilities. You should also make sure you’re set up to handle their tax and super.

Give your employee information on their entitlements

You must give your new employee the Fair Work Information Statement before (or as soon as possible after) they start working for you. This explains their minimum conditions of employment, including the National Employment Standards.

 You may also need to give your employee:

  • the Fixed Term Contract Information Statement, if they’re employed on a fixed term contract. You must give them this before (or as soon as possible after) they sign the contract.
  • the Casual Employment Information Statement, if they're a casual employee. You must give them this before (or as soon as possible after) they start working for you.

You can download these information statements from the Fair Work Ombudsman website.

If your employee is covered by an award, you must make the relevant award easily available to them. You can provide a digital version or a hard copy (for example, in a prominent place in the kitchen or on a noticeboard at work).

You should also tell your employee:

  • that they are covered by that award
  • what classification their role is under the award.

Learn more

Checklist

  • Give your employee the Fair Work Information Statement
  • If they’re on a fixed term contract, give them the Fixed Term Contract Information Statement
  • If they’re casual, give them the Casual Employment Information Statement
  • Make their award easily available

Agree to hours and rostering

Under most awards, you and a full-time or part-time employee need to agree on usual hours of work and rostering arrangements in advance. The award might also have other rules, like how much notice you need to give an employee if you change their roster or hours.

If you’re taking on a casual worker, check the award first. They may be entitled to be rostered on or paid for a minimum number of hours each day they work.

The Fair Work Ombudsman has templates to help you prepare your roster and manage work hours.

Employees have a legal ‘right to disconnect’ from the workplace. This means they don’t have to monitor, read or respond to work-related communications outside their working hours. However, there are some exceptions to this rule.

You should discuss the possibility of out-of-hours contact with your employee early on and set expectations that work for both of you. The Fair Work Ombudsman has information and resources to help you.

Checklist

  • Understand any rules about rostering and hours under the award
  • Agree on hours and rostering with your employee if they are full-time or part-time
  • Discuss expectations around contacting your employee outside working hours

Get ready to withhold tax

You generally need to withhold tax from your employee’s pay. You collect tax on their behalf and then send it to the Australian Taxation Office (ATO) at regular intervals. This is called pay as you go (PAYG) withholding

Tax file number declaration

To withhold tax for your new employee, you need their tax file number (TFN).

Ask them to complete a TFN declaration form online. The information they provide in this form will help you to work out how much tax to take out of their pay.

If your employee does not provide their TFN, you must withhold tax from their pay at the highest tax rate.

Register for pay as you go (PAYG) withholding

You need to register for PAYG withholding before you pay your employees for the first time. You can register online or ask your tax agent to register for you.

You only need to register your business for PAYG withholding once. You do not need to register for each new employee.

Make sure you are using Single Touch Payroll (STP)

STP is how you report employees’ payroll, tax and super information to the ATO.

You must either:

  • pay your employees through STP-enabled software
  • use a service provider (such as a tax agent) to report STP for you.

Use the get ready checklist on the ATO website if you need help preparing for STP.

Learn more

Checklist

  • Register for PAYG withholding if you haven’t already
  • Ask your new employee to complete a TFN declaration form
  • Know how to report using STP

Get ready to pay super

Most employees are eligible to choose their own super fund. You’ll need to give them a superannuation standard choice form within 28 days of them starting work.

If your employee doesn't choose a super fund, you might need to request their stapled super fund details from the ATO. A stapled super fund is an existing super account linked, or 'stapled', to an employee.

You’ll need to give your new employee's tax file number to their super fund.

Check the relevant award to see if there are any other super obligations you need to comply with.

Decide how to pay super

You must pay super electronically using a data and payment standard called SuperStream.

To meet SuperStream requirements, use one of:

  • a SuperStream-compliant payroll system
  • the super fund’s online payment system (if they have one)
  • a super clearing house. You send a single payment covering all your employees to the clearing house, which pays the right amount into each employee’s fund.

Small businesses can pay super using the ATO’s free Small Business Superannuation Clearing House. However, this clearing house will be closed from 1 July 2026 and won’t accept new registrations from 1 October 2025.

Learn more

Checklist

  • Give your employee a superannuation standard choice form
  • Give your employee’s tax file number to their chosen super fund
  • Check the award for any other super obligations
  • Decide how you’re going to pay super

Induct your new employee

A thorough induction will help your employee quickly settle in and become a productive member of your team.

Things to do during an induction:

  • Show the employee around your business premises, pointing out things like parking, toilets, kitchens, storage and their work area.
  • Introduce them to their colleagues, including their manager or supervisor.
  • Give them some background on your business and how their role fits in.
  • Share any important documents, such as your business plan.
  • Run them through your key policies and procedures.
  • Make sure they can access the tools and systems they need.
  • Arrange any training they will need to do their job.

Learn more

Checklist

  • Induct your new employee into the business

Provide health, safety and emergency information

Give your employee information about work health and safety in your business.

This should cover:

  • their responsibilities around health and safety
  • hazards and risks in your workplace and how to control them
  • safe work procedures and how to do their job safely
  • emergency evacuation procedures
  • locations of emergency exits and first aid kits
  • who your fire wardens, first aid officers and other health and safety staff are.

Learn more

Checklist

  • Give your employee WHS and emergency information
  • Make sure they understand how to do their job safely
  • Make sure they know what to do in an emergency

5. Pay your employee correctly

Once your employee starts work, you’ll need to pay them the right amount and on time. This includes taking tax out of their pay for them.

Calculate pay accurately

The amount you need to pay your employee each payday can depend on:

  • their base wage under the relevant award
  • the hours they worked. This includes time spent in meetings, doing training or opening and closing your business.
  • penalty rates (for example, if they worked on a weekend)
  • overtime rates
  • allowances (for example, if they use their own vehicle for work).

Use the Fair Work Ombudsman's pay and conditions tool to find pay rates, penalty rates and allowances for an award.

Remember, if your employee isn’t covered by an award, you must pay them at least the national minimum wage.

Learn more

Checklist

  • Calculate how much to pay your employee

Withhold tax from payments

You must withhold pay as you go (PAYG) tax from your employee’s pay.

Work out the correct amount to withhold from each payment by using the tax withheld calculator or tax tables on the Australian Taxation Office (ATO) website.

Learn more

Checklist

  • Work out how much tax to withhold each pay cycle
  • Put this tax aside until it's time to pay the ATO

Pay on time and provide a pay slip

You must pay your employee at least monthly. You can pay them:

  • in cash
  • by cheque
  • electronically into their bank account.

Some awards require you to pay more often or use a particular method.

You must give your employee a pay slip within one working day of paying them. There is certain information that you must include on a pay slip.

The Fair Work Ombudsman has more about paying wages and what to include on a pay slip.

Checklist

  • Pay your employee correctly and on time
  • Give your employee a pay slip within one working day of pay day

Know when pay rates change

You must stay up to date with any changes to awards and pay rates.

Your employee’s pay rate can change when:

  • the National Minimum Wage and minimum pay rates in awards are reviewed each year. Any changes usually take effect around 1 July
  • a junior employee has their birthday
  • an apprentice or trainee reaches a milestone
  • your employee’s role changes.
Subscribe to email updates from the Fair Work Ombudsman to find out when your employee's award is changing.

Checklist

  • Sign up to Fair Work Ombudsman email updates

6. Pay and report tax and super

Find out how to report your employee’s pay information to the Australian Taxation Office (ATO) and meet your tax and super obligations.

Report through Single Touch Payroll

Every time you pay an employee, you must report their pay, tax and super information to the ATO through Single Touch Payroll (STP). You can either do this:

  • by using STP-enabled payroll software
  • through a service provider (such as a tax agent).

The ATO has more information on how to report STP data.

By 14 July each year, you need to check your information in STP is correct and make an end-of-year finalisation declaration. This lets your employees access the information they need to do their tax return.

Checklist

  • Report your employees’ pay, tax and super through STP every time you pay them
  • Make an end-of-year finalisation declaration by 14 July each year

Pay PAYG withholding

Report the PAYG tax you’ve withheld from your employees’ pay on your business activity statement (BAS). You’ll need to pay this tax to the ATO at the same time.

The ATO website explains how report PAYG withholding on your BAS.

Depending on your business, you must lodge a BAS monthly, quarterly or yearly.

Learn more

Checklist

  • Include PAYG withholding amounts on your BAS
  • Pay the correct amount to the ATO

Pay super

Every quarter you need to:

  • work out how much super to pay on behalf of each employee
  • pay contributions into their fund within 28 days of the end of the quarter.

If you pay your employee’s super late or don't pay the correct amount, you must pay an additional super guarantee charge.

Learn more

Checklist

  • Work out how much super you need to pay for your employee
  • Pay super into their fund using a SuperStream-compliant payment method

Check if you need to pay fringe benefits tax

Fringe benefits are certain benefits you give to an employee (or their associate, such as a family member) in addition to their salary or wages.

Examples of fringe benefits:

  • letting your employee use a work car for private purposes
  • car parking
  • paying or reimbursing your employee's private expenses, such as school fees or gym memberships
  • providing entertainment, such as concert or sporting tickets
  • discounted loans
  • some benefits under a salary sacrifice arrangement.

If you give your employees fringe benefits, you must pay fringe benefits tax (FBT). This means you need to:

  • be registered for FBT
  • calculate FBT using the method set out by the ATO and keep a record of your calculations
  • lodge an FBT return and pay the FBT you owe once a year
  • include each employee’s reportable fringe benefits in STP or on their end-of-year payment summary.

Learn more

Checklist

  • Determine if you give your employees any fringe benefits
  • If you do, register for FBT (if you haven't already)
  • Calculate your FBT liability
  • Lodge and pay your FBT return once a year
  • Report each employee’s fringe benefits through STP or on their payment summary

Check if you need to pay payroll tax

Payroll tax is a state or territory tax. It's calculated on the total wages you pay each month. The state or territory where your employees are located collects the tax.

You must register for and pay this tax when the wages you pay are over the tax-free threshold for the relevant state or territory. Thresholds and tax rates vary between states and territories.

Learn more

Checklist

  • Calculate your total wages for each state and territory where you employ staff
  • Check if each total is above the threshold in that state or territory
  • If it’s above the threshold, register for and pay payroll tax in that state or territory

7. Keep the right records

You’re legally required to keep some records of employees and payments for several years.

Keep employment records

You must keep records about your new staff member’s employment for 7 years, including:

  • their details
  • how much they were paid
  • hours worked
  • leave taken and accrued
  • super contributions.

It’s a good idea to keep some other employment records as well, such as:

  • job applications
  • employment contracts
  • performance reviews
  • trade or registration certificates.

The Fair Work Ombudsman has some templates you can use for employment records.

Learn more

Checklist

  • Know what employment records you need to keep
  • Work out a system to store them safely for 7 years

Keep tax and super records

The Australian Taxation Office (ATO) needs you to keep records relating to your employee’s tax and super for 5 years.

This includes:

  • records of payments made to employees
  • how you calculated the super guarantee contribution for each employee
  • how you met your obligations to give eligible employees a choice of super fund.

The ATO website has more information about the tax and super records you need to keep for your employee.

Learn more

Checklist

  • Know what tax and super records you need to keep
  • Work out a system to store them safely for 5 years

8. End employment

Sometimes a new employee just doesn't work out. If that happens, you need to know how to end their employment.

Know the rules for ending employment

There are 3 main ways your worker’s employment can end:

  • Resignation – Your employee chooses to leave your business. Depending on their award or employment contract, they may have to give you a minimum notice period.
  • Redundancy – Your employee’s job no longer needs to be done by anyone. You may need to give your employee redundancy pay and entitlements as well as a minimum notice period.
  • Dismissal – You dismiss the employee for a valid reason, such as poor performance, conduct issues or changes to your operational requirements. Depending on the employment type and reason for dismissal, you may need to give them a minimum notice period.

A dismissed employee may be able to challenge their dismissal with the Fair Work Commission if they think it is unfair. They can only do this if they worked for you for at least:

  • 12 months if you have less than 15 employees
  • 6 months if you have 15 or more employees.

Learn more

Checklist

  • Make sure you have a valid reason if you're dismissing an employee
  • Understand entitlements and minimum notice periods for resignation, redundancy and dismissal

Give your employee their final pay

However the employment ends, you’ll need to pay your employee for:

  • any outstanding hours worked
  • annual leave they have accumulated
  • any other entitlements, such as redundancy pay.

You do not have to pay out any accumulated sick or carer’s leave.

Under most awards, you need to give your employee their final pay within 7 days of the employment ending.

The Fair Work Ombudsman has more information on final pay.

Checklist

  • Calculate final pay, including paying out any annual leave
  • Give your employee their final pay within 7 days of their employment ending

Get the checklist for this guide as a PDF or Word document (DOCX).

Get the checklist for this guide as a PDF or Word document (DOCX).