Hiring a new employee is an exciting milestone for any business—but it also comes with legal responsibilities that can’t be ignored. In Australia, employment law requires businesses to meet specific standards from the moment a worker is hired. These obligations include issuing compliant contracts, managing payroll, verifying work rights, and providing mandatory information statements.
This legal guide, prepared by our employment law team, is tailored for employers and sets out everything you need to know when hiring an employee in Australia, including a checklist covering employment contracts, tax and superannuation, payslip rules, and compliance with the Fair Work Act 2009 (Cth).
Key Takeaways
All new hires must receive a written employment contract that meets Fair Work Act minimums
You must issue a Fair Work Information Statement and (if casual) a Casual Employment Information Statement
Payroll systems, superannuation payments, and tax withholdings must be compliant from day one
Verify qualifications, work rights, and apply the correct award entitlements
A legally sound hiring process reduces the risk of disputes, underpayments, and penalties
1. Issue a Legally Compliant Employment Contract
A written employment contract helps clarify expectations and protect both parties. While verbal agreements are legally valid, written contracts offer clearer enforcement.
Your contract should include:
Employee and employer details
Job title and duties
Salary or hourly rate
Working hours and location
Notice period and termination terms
Confidentiality and IP clauses
Flexibility and remote work arrangements (if applicable)
Tip: Have a lawyer review contracts regularly to ensure compliance with updates to awards, National Employment Standards (NES), or your industry practices.
2. Provide the Fair Work Information Statement (FWIS)
The FWIS is a mandatory document explaining employee rights under the National Employment Standards (NES). It must be given to all employees before or as soon as they start.
For casual employees, you must also provide the Casual Employment Information Statement (CEIS).
Remember: Failure to provide these documents is a breach of the Fair Work Act and may result in fines.
3. Set Up a Compliant Payroll System
Before paying wages, you must:
Register for PAYG Withholding with the ATO
Calculate and report tax through Single Touch Payroll (STP)
Issue payslips within 1 working day of payment
Keep wage and leave records for 7 years
Payslips must include:
Gross/net pay
Tax withheld
Super contributions
Hours worked and applicable rates
4. Meet Superannuation Obligations
As of 1 July 2024, employers must contribute 11.5% of an employee’s ordinary time earnings to their nominated super fund. This will increase to 12% from 1 July 2025.
You must:
Provide a Superannuation Standard Choice Form within 28 days
Make quarterly payments by the ATO deadline
Use a SuperStream-compliant method (e.g. ATO clearing house or payroll software)
Failing to pay on time results in the Superannuation Guarantee Charge (SGC) and additional penalties.
5. Confirm Work Rights and Qualifications
Before hiring:
Use the VEVO system to check visa status and work rights
Verify required licences or professional qualifications
Contact 2–3 referees to assess cultural fit and past performance
Hiring someone without valid work rights can lead to severe penalties under the Migration Act 1958 (Cth).
6. Clarify Expectations and Policies
Avoid misunderstandings by clearly communicating your expectations from the outset. Use:
Employment contracts
Position descriptions
Company handbooks and workplace policies
This helps reinforce behavioural expectations, safety standards, and dispute resolution pathways.
For guidance on legal frameworks when a candidate withdraws post-sign-on, see our article on when new hires change their mind after signing.
Frequently Asked Questions
Do I have to provide a written employment contract?
It’s not legally required, but it’s strongly recommended. A written contract protects both parties and reduces ambiguity.
What happens if there is no written employment contract?
If there is no written contract, the employment relationship is still governed by oral agreements, statutory minimums, and implied terms under Australia law.
What makes an employment contract legally binding in Australia?
A contract is legally binding if it contains offer, acceptance, consideration, intention to create legal relations, and complies with statutory requirements.
Can an employment contract override the Fair Work Act or Modern Awards?
No, employment contracts cannot exclude or provide less than the minimum entitlements under the Fair Work Act or applicable Modern Awards.
How often should employment contracts be reviewed?
Employment contracts should be reviewed at least annually or whenever there are significant changes to the law or business operations.
