Hiring employees checklist

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

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

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

Read about different types of employment and employee entitlements on the Fair Work Ombudsman website before you decide what type of employee you need.

When you hire a worker, make sure you are clear if you are hiring them as an employee or contractor. Their classification will affect your tax, super and other obligations.

Whether a worker is classified as an employee or contractor can also vary depending on their working arrangement. For example, some contractors are considered employees for super obligations and eligible for the super guarantee (SG) from their employers.

You’re responsible for classifying your worker for tax and super purposes and you need to get it right. If you make an incorrect decision, you may face penalties and charges.

• Read the information on How to work it out: employee-or-contractor on the Australian Taxation Office (ATO) website – this will help you to work out your business’s tax and superannuation obligations.
• Read the Fair Work Ombudsman’s independent contracting page to understand the different entitlements of employees and contractors and why you need to get this right.

This checklist covers the requirements of hiring an employee. If you are looking for information on engaging a contractor, check out our Contractors section.

For most national system employees, you can find the minimum pay rates, terms and conditions in the relevant award. An award sets out the minimum pay and conditions for a particular industry or occupation. Use the Fair Work Ombudsman's Find my award tool to find the relevant award. You can then check for minimum pay rates and terms and conditions for topics like:

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

You can also use the Fair Work Ombudsman’s Pay Calculator to work out what you’ll need to pay your new employee under the relevant award (including any penalty rates).

Where employees aren’t covered by an award or agreement, they are entitled to:

• a minimum wage
• certain minimum entitlements that include maximum working hours, leave entitlements and requirements around termination (the National Employment Standards (NES)).

Casual employees only get some NES entitlements, like unpaid carer’s leave and the right to convert to permanent (full-time or part-time) employment in some circumstances.

You must meet your obligations to employees under the relevant award and the NES. If you don’t, you may face penalties. Our free Employment Contract Tool can help you to meet these obligations.

If you’re considering a job trial or probation period, you’ll still need to comply with entitlements under the award and NES for pay and conditions.

If you’re in WA, depending on your business structure, you may need to provide pay rates and conditions under the WA industrial relations system.

When you hire an employee, you’ll be responsible for managing them and their performance. Find out about managing employees on the Fair Work Ombudsman website.

You must also take all reasonable steps to provide your employee with a healthy and safe working environment. To do this, you may have to make changes to your workplace. You must provide:

• information, instruction, training and supervision
• safe premises, machinery and materials
• safe systems of work
• a suitable working environment and facilities.

You also need to monitor the health of workers and conditions at the workplace. You must have workers' compensation insurance for your employees and should consider public liability insurance.

Learn more about work health and safety.

When you employ someone, you’ll have tax and super obligations, including Single Touch Payroll reporting. These obligations are covered in later steps. You can also visit the ATO website for more information on your tax and super obligations for employees.

Discrimination in the workplace is unlawful. This includes discrimination against applicants during the recruitment process, as well as after you've hired an employee.

You must not discriminate against job applicants or employees because of reasons including:

• race
• colour
• national extraction (place of birth or ancestry)
• social origin (class, caste or socio-occupational category)
• sex
• sexual orientation
• gender identity
• intersex status
• 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 or employ someone with a disability, you may need to adjust your workplace (or work practices) to make sure it's safe and accessible for them.

Find out more on the Equal opportunity and diversity page. Make sure to check the state or territory resources for discrimination laws that apply to you.

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

If you’re considering hiring a worker from overseas, you must make sure they have the correct type of visa. To check if their visa allows them to work in Australia, you can use the free online service Visa Entitlement Verification Online (VEVO).

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

Visit the Department of Home Affairs website for more on employing migrants and checking work rights.

Depending on your business type, your employee may need specific licences or qualifications to do their job. Check they have the correct licences and, if they don’t, consider providing training. This may involve hiring them as an apprentice or a trainee while they study for the relevant qualifications.

Check your industry licence and permit requirements.

Search the Australian Business Licence and Information Service to find licences you may need.

You must provide your new employee with the Fair Work Information Statement (FWIS) before, or as soon as possible after, they start working for you. This provides them with information about their minimum conditions of employment, including the NES. If they're a casual employee, you must also give them the Casual Employment Information Statement (CEIS).

If your employee is covered by an award, you must make the relevant award easily available to them. You may provide a digital version or a hard copy (e.g. in a prominent place in the tea room or on a noticeboard at work). You should also tell your employee they are covered by that award, and what classification their role is.

Under most awards, you and your employee must agree on the hours of work and rostering in advance, especially if they're full-time or part-time. There might also be other rules, for example around how much notice you have 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.

Download templates from the Fair Work Ombudsman website to help you prepare your roster and manage work hours.

Register for pay as you go (PAYG) withholding

You need to withhold tax from payments to your employee in most cases. You’ll collect these PAYG withholding amounts and send them to the ATO at regular intervals. Before you can do this, you must register for PAYG withholding.

Find out if you need to withhold tax from payments to your employee on the ATO website.

Tax file number (TFN) declaration

Ask your new employee to complete a tax file number (TFN) declaration form. The information they provide in the form will help you to work out how much tax you need to take out of their pay. If your employee chooses to not provide a TFN declaration, their pay will be subject to the top tax rate.

Superannuation guarantee

You must pay super contributions for all eligible workers to a complying super fund or retirement savings account. This is called the super guarantee (SG) and it applies to full-time, part-time and casual employees and some contractors. If you don't pay SG, you will be required to pay a super guarantee charge (SGC). The SGC is more than the super you would have otherwise paid to the employee's fund and is not tax deductible.

Whether you’re paying super weekly, monthly, or quarterly, make sure that the SG contributions you pay to superfunds on behalf of your eligible workers are calculated using the current SG percentage rate. 

If your employee is eligible for SG, check if they're also eligible to choose a super fund. If so, give them a Standard choice form within 28 days of them starting.

For new employees that start from 1 November 2021 onwards, if they don't choose a super fund, you may need to request their stapled super fund details from the ATO to comply with choice of fund rules. A stapled super fund is an existing super account linked, or 'stapled', to an individual employee so it follows them as they change jobs.

Check the relevant award to see if there are any other super obligations that you may need to comply with. If you don't meet your SG obligations, additional penalties may apply.

Provide your employee's TFN to their super fund the next time you make a payment for them (or within 14 days of them providing their TFN to you).

You’ll need to provide your employee with information on work health and safety (WHS) and their WHS obligations.

Find out more about work health and safety obligations. 

Your employee's minimum wages, including penalty rates (for example, if they work on a weekend), overtime rates and allowances, will be set out in the relevant award. Some employees have special minimum wages in an award, for example:

• junior pay rates
• apprentice and trainee pay rates.

Use the Fair Work Ombudsman's Pay Calculator to calculate pay rates under an award. If your employee isn’t covered by an award, you must pay them at least the National Minimum Wage.

You must collect pay as you go (PAYG) tax from employee payments. Work out the amount to withhold from payments to your employee using the ATO's tax withheld calculator or tax tables.

Amounts withheld need to be included, and paid, on your activity statement lodgement. Find out more on how to complete your activity statement labels on the ATO website.

You must pay your employee at least monthly. Check the award – sometimes it will require you to pay more often or by a particular method.

Provide pay slips

You must give your employee a pay slip within 1 working day of paying them. There is certain information that you must provide on a pay slip, including the amount paid and any amounts withheld for tax purposes.

Learn more about paying wages and what you must include on a pay slip on the Fair Work Ombudsman website.

Make sure you stay on top of any changes to awards and pay rates. Examples of when these can change include when:

• minimum pay rates in awards and the National Minimum Wage 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 award is changing.

Each quarter, you’ll need to:

• work out how much super to pay on behalf of your employee
• report and pay super contributions electronically using the SuperStream standard by the due date (to avoid the super guarantee charge).

If you are late, or don't pay the correct amount of super for all your eligible workers, you must lodge a super guarantee charge statement and pay the super guarantee charge to the ATO.

Fringe benefits tax (FBT) is a tax you pay if you provide certain fringe benefits to your employee, or to the employee's family or other associates. A fringe benefit is like a ‘payment’, but in a different form to salary or wages. This includes things like:

• allowing your employee to use a work car for private purposes, such as driving between home and work
• providing your employee with car parking where certain conditions apply
• paying or reimbursing your employee's private expenses, such as school fees and gym memberships
• providing entertainment.

If you provide fringe benefits to your employees, you need to:

• identify the types of fringe benefits provided
• determine the taxable value using one of the approved methods to calculate if you have an FBT liability
• lodge a FBT return if you have an FBT liability or paid FBT instalments through your activity statements
• pay the FBT you owe
• include the grossed-up amount of an employee’s reportable fringe benefits through STP or on their payment summary, if the total taxable value is more than $2,000.

You may have to include some contributions that your employees have made to you towards the cost of a fringe benefit as assessable income.

Find out more about FBT on the ATO website.

You need to make and keep employee records for 7 years, including records about their:

• employment
• pay
• hours of work
• leave
• super amounts.

To help you manage employee records, read about record-keeping and find handy templates on the Fair Work Ombudsman website.

You must keep all records for your employee for 5 years relating to:

• tax
• superannuation amount calculations
• how you met your choice of super fund obligations.

The ATO website has information to help you understand which tax and super records you need to keep for your employee.

You need to report payments made to your employees to the ATO, including:

• salaries and wages
• PAYG withholding
• reportable fringe benefits
• super.

Learn more about reporting tax and super and when to report on the ATO website.

Each time you pay your employees, you'll need to report their tax and super information to the ATO through Single Touch Payroll (STP) enabled payroll software.

The reporting includes:

• salary and wages
• amounts withheld.

By 14 July each year, you'll also need to check your information is correct and make an end-of-year finalisation declaration through STP. This is important so your employees can access their information to complete their income tax return.

How you report your payroll information to the ATO depends on your situation and the payroll software you use. The ATO’s STP Get ready checklist will guide you through the steps to start reporting and help you send your first STP report successfully.

This checklist focuses on hiring an employee, but you may want to know up front about some of the rules when ending employment.

Whether your employee resigns or you end their employment, you’ll need to follow rules about dismissal, notice and final pay. 

If you dismiss an employee, they can challenge the dismissal with the Fair Work Commission if they think it was unfair. However, if you’re a small business with less than 15 employees, an employee needs to have been working for you for at least 12 months before they can make a claim for unfair dismissal. If you have 15 or more employees, they can make a claim if they've worked for you for 6 months.

Learn more about ending employment, unfair dismissal, dismissal in breach of the general protections, notice and final pay on the Fair Work Ombudsman’s Ending employment section.