Australia provides international businesses with access to a skilled workforce and flexible employment conditions. However, foreign-owned businesses employing staff in Australia must comply with key employer obligations, including workplace rights, leave entitlements, Pay As You Go (PAYG) withholding, superannuation, Single Touch Payroll (STP), workers’ compensation insurance and Fringe Benefits Tax (FBT).
Whether operating through an Australian subsidiary or branch, you must meet the same employment requirements as local employers to remain compliant and avoid penalties.
What workplace rights and obligations apply to employers?
Employers in Australia must comply with the Fair Work Act 2009, which establishes minimum employment standards and protects employee rights. The legislation covers areas such as minimum wages, working hours, workplace protections, flexible working arrangements and discrimination laws.
Foreign-owned businesses must ensure their employment practices comply with Australian workplace standards. Although written employment contracts are not always compulsory, they are recommended because they clearly define employment conditions, responsibilities and expectations.
You must also comply with workplace health and safety (WHS) laws, which vary between states and territories. Businesses must provide a safe working environment, identify risks and implement appropriate safety measures. Failure to meet WHS obligations can result in significant penalties and legal action.
What leave entitlements must employers provide?
Australian employers must provide minimum employee leave entitlements under the National Employment Standards (NES). These include:
Annual leave
Personal or sick leave
Carer’s leave
Parental leave
Employment contracts, awards or enterprise agreements may provide additional benefits but cannot reduce an employee’s minimum NES entitlements. Employers must also recognise Australian public holidays. Employees generally receive their normal pay when they do not work on a public holiday, while employees who work on these days may receive additional pay rates.
What are PAYG withholding obligations?
Employers must withhold tax from certain payments made to employees and send these amounts to the Australian Taxation Office (ATO) through the PAYG withholding system.
Foreign-owned businesses employing staff in Australia must:
Register for PAYG withholding
Withhold and pay employee tax amounts to the ATO by the due dates
Report withheld amounts through BAS or IAS
Provide required employee payment information
Complete annual PAYG reporting or STP payroll finalisation where applicable
The frequency of PAYG withholding payments depends on the amount your business withholds. Small withholders that withhold less than $25,000 per year generally pay quarterly, while medium withholders that withhold more than $25,000 and up to $1 million generally pay monthly. Businesses that withhold more than $1 million are classified as large withholders and must meet more frequent payment obligations.
Employers must maintain accurate payroll records and meet all ATO reporting and payment deadlines to comply with Australian tax obligations. When your business stops employing workers, it must also cancel its PAYG withholding registration.
What superannuation obligations apply to employers?
You must make compulsory superannuation contributions for eligible employees to support their retirement savings. Foreign-owned businesses must contribute at least 12% of an employee’s qualifying earnings (QE) into their nominated superannuation fund. Employers must also provide employees with a default super fund and ensure contributions are paid correctly and on time.
Under the Payday Super reforms, employers must pay superannuation contributions at the same time as wages. Contributions must reach employees’ super funds within seven business days of payday.
What is Single Touch Payroll?
STP is a mandatory reporting system that requires employers to report payroll information to the ATO each time they pay employees. Through STP-enabled payroll software, employers report:
Salaries and wages
PAYG withholding amounts
Reportable fringe benefits
Superannuation contributions
The ATO uses STP data to monitor employer compliance with payroll and superannuation obligations. You must ensure your payroll systems support STP reporting requirements.
Do employers need workers’ insurance?
Workers’ compensation insurance is compulsory for employers in every Australian state and territory. It protects employees who suffer work-related injuries or illnesses by providing financial support for medical treatment, rehabilitation and lost wages.
Foreign-owned businesses must register for workers’ compensation insurance in each state or territory where their employees work. As requirements differ between jurisdictions, you must understand the obligations that apply to your workforce location. Failure to maintain the required workers’ compensation insurance can result in significant penalties and legal consequences.
What is Fringe Benefits Tax?
Non-resident employers that provide benefits outside regular salary and wages may need to pay FBT. Fringe benefits can include private use of company vehicles, car parking benefits and certain entertainment expenses. Businesses providing taxable fringe benefits must calculate their FBT liability, lodge an annual FBT return and pay any required tax to the ATO.
How can foreign-owned businesses manage employer obligations in Australia?
Employing staff in Australia requires international businesses to manage ongoing workplace, payroll, tax and reporting responsibilities. Your foreign-owned company should establish compliant systems before hiring employees to ensure you meet Australian requirements.
ABN Australia supports international businesses entering and operating in Australia through company registration, accounting, tax compliance, payroll support and corporate services. With extensive experience assisting overseas businesses, we can help you manage your obligations and operate efficiently in the Australian market. Contact our team for support.
Last updated: 22nd July 2026
About the Author
Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.
Ro Elvinia
Customer Success and Marketing Manager