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.

You can also get someone to provide services to your business as a contractor.

You need to consider a range of factors when determining whether someone is an employee or contractor of your business. It's important that you know the difference and get this right.

• Check the differences between employees and contractors 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.

People engaged to provide services to your business as a contractor are not considered to be employees of your business, so are not covered by this checklist.

For most 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 and check:

• types and classifications of employees
• minimum pay rates
• hours of work and rosters
• breaks
• allowances
• penalty and overtime rates
• leave
• super

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).

While some employees aren’t covered by an award or agreement, all employees in Australia are entitled to:

• a minimum wage
• 10 minimum entitlements that include maximum working hours, leave entitlements and requirements around termination (the 10 National Employment Standards (NES))

Casual employees only get some NES entitlements, like unpaid carer’s leave.

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

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. For all other states and territories, check the relevant award and NES.

When you take on 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 and may need to get 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
• age
• physical or mental disability
• marital status
• family or carer’s responsibilities
• pregnancy
• 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 work place (or work practices) to make sure it's safe and accessible for them.

Find out more on this Equal opportunity and diversity page. Make sure to check the state resources for discrimination laws in your state or territory.

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 worker 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.

Download a copy of the FWIS from the Fair Work Ombudsman website to provide to your employee.

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. You don't have to give them a firm commitment of the days (or hours) they'll work when you hire them. They can also refuse 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 should pay contributions to a super fund for eligible employees. This is called the super guarantee and it applies to full-time, part-time and casual employees.

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

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

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 worked on a weekend) and overtime rates, will be set out in the relevant award. Some employees have special minimum wages in an award, for example:

• juniors
• apprentices and trainees

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

Provide payslips

You must give your employee a payslip within 1 working day of paying them. There is certain information that you must provide on a payslip, 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)

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

• letting them use a work car to drive between work and home
• car parking
• providing them with entertainment

If you provide any fringe benefits to your employees, you must:

• be registered for FBT
• lodge an FBT return if you’re liable to pay FBT during an FBT year (1 April to 31 March)

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

Read about keeping employee records and find handy templates to help manage them 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.

STP is a new way of reporting tax and superannuation information to the ATO. With STP you report your payroll information each time you pay your employee through STP-enabled software.

STP started from 1 July 2019 for small businesses with less than 20 employees. But if you employ:

• 4 people or less – if you haven't got STP and need more time, you can ask your tax or BAS agent to report on your behalf up until 30 June 2021
• family (or other ‘closely held payees’) – you have until 1 July 2021 to start STP reporting for those employees

Find out more about Single Touch Payroll on the ATO website.

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 more than 15 employees, they can make a claim if they've worked for you for 6 months.

Learn more about ending employment, unfair dismissal, notice and final pay on the Fair Work Ombudsman’s Ending employment page.