UK employers hiring in Australia: where British payroll habits stop working

British businesses usually recruit in Australia to serve customers in Asia-Pacific and to hand work across time zones. When a London team closes its laptops, an east-coast Australian colleague is starting the next morning, so support queues and release cycles keep moving without overtime at home.

Familiarity also plays a part. Both countries use English contract language and similar professional titles, which shortens onboarding for finance and legal teams. That familiarity is also the trap: terms such as notice, redundancy and holiday pay exist in both places but carry different statutory rules.

Typical first hires are a regional sales lead, a customer success manager or an engineer who needs overlap with clients in Singapore, Sydney or Auckland. A small team like this rarely justifies a local company at the start, which is why the employment structure deserves a deliberate decision rather than a default.

Currency is the other early question. Australian staff are paid in AUD, so a UK budget set in sterling moves with the exchange rate every month. Many British finance teams fix an annual planning rate for the Australian cost centre and review it at the half year, which keeps variance reports readable for the board.

The UK employer pays secondary Class 1 National Insurance and a minimum pension contribution; the Australian employer pays superannuation, state payroll tax and workers’ compensation. According to gov.uk’s rates and thresholds for employers 2026 to 2027, employer NICs are 15% of earnings over GBP 5,000 a year, the secondary threshold, with an Employment Allowance of GBP 10,500. The gov.uk workplace pension guidance sets the employer minimum at 3% of qualifying earnings, currently the band from GBP 6,240 to GBP 50,270.

Australia’s superannuation guarantee for 2026-27 is 12% of qualifying earnings starting at the first dollar, without any lower band, and stops at AUD 270,830 of earnings for the year. It is compulsory, employer-funded and paid into the employee’s chosen fund. Payroll tax is a state levy: New South Wales charges 5.45% on taxable wages, which include super, above AUD 1,200,000 a year.

Two rough examples show the shape. A UK employee on GBP 50,000 attracts GBP 6,750 of employer NICs and a minimum pension contribution of GBP 1,312.80, a total of GBP 8,062.80 before any Employment Allowance, assuming standard category rates and the qualifying-earnings basis. A Sydney employee on AUD 110,000 attracts AUD 13,200 of super, AUD 6,714.40 of NSW payroll tax (assuming the employer’s group is already above the threshold) and an illustrative AUD 369.60 of workers’ compensation, a total of AUD 20,284.

The two figures sit in different currencies and should not be converted and compared line by line. The useful lesson is proportion: Australian on-costs run at roughly 18% of base in that example, and most of it is super. The mechanics are explained in the 12% super guarantee explained.

Australia’s tax year opens on 1 July and closes on 30 June; the UK’s opens on 6 April and closes on 5 April. A UK finance team therefore closes the Australian year three months after its own April year end, and Australian pay rises commonly land on 1 July, when the national minimum wage and award rates change.

Withholding works on a similar principle to PAYE. Australian employers deduct pay as you go (PAYG) withholding from each pay using ATO tax tables, and the employee’s income tax plus a 2% Medicare levy is settled on assessment after the year ends. Resident rates for 2026-27 start at nil up to AUD 18,200, then 15%, 30%, 37% and 45%.

Reporting happens through Single Touch Payroll (STP) Phase 2, which sends each pay event to the ATO on or before payday, with gross pay broken down into categories such as leave, allowances, overtime and bonuses. From 1 July 2026 STP also carries qualifying earnings and the super liability, and the year is finalised by 14 July.

Super now moves at payroll speed. Under Payday Super, each contribution has 7 business days from payday to arrive in the fund. A UK-style monthly pension remittance timetable will not meet that rule, so the payroll provider has to pay super alongside wages. Late or missed payments now attract a new super guarantee charge made up of the shortfall, notional earnings and an administrative uplift, so the timing rule has real consequences.

Remote staff and travel add one more calendar point. An employee who spends long periods in the UK while on Australian payroll can create tax questions in both countries, and those cases deserve advice before the trip rather than after the year end.

From the first day, an Australian employee is covered by the National Employment Standards (NES) in the Fair Work Act 2009, and often by a modern award as well. The NES sets the floor for hours, leave, notice and redundancy; the award, where one applies, adds minimum pay by classification, penalty rates and overtime.

Notice of termination under the NES runs from 1 week for up to a year’s service to 4 weeks after 5 years, with one extra week for an employee over 45 with at least 2 years’ service. Redundancy pay starts at 4 weeks after one year and peaks at 16 weeks between 9 and 10 years, falling to 12 weeks after 10 years. Businesses employing under 15 people are not required to pay NES redundancy pay.

Unfair dismissal protection turns on earnings and coverage. Anyone paid less than AUD 190,100, the high income threshold since 1 July 2026, or working under an award or enterprise agreement, is generally able to claim after completing a minimum employment period. Any compensation awarded tops out at AUD 95,050 or 26 weeks’ pay, whichever is lower. UK HR teams used to a qualifying period of service should check the Australian period with the Fair Work Commission rather than assume the British one.

Two newer rights often surprise British managers. The right to disconnect lets employees refuse unreasonable contact outside working hours, and since 26 August 2025 it covers small business employers too. Fixed-term contracts are capped at 2 years including renewals, subject to exceptions.

Australian full-time employees receive 4 weeks of paid annual leave a year under the NES, plus public holidays set by each state or territory. Part-timers accrue pro rata and casuals receive a 25% loading instead of paid leave.

Personal/carer’s leave gives 10 paid days a year, and family and domestic violence leave is 10 paid days for everyone, casuals included. Long service leave is a matter for each state; a New South Wales employee earns 8.67 weeks after 10 years, while Victoria and Queensland have their own formulas.

Parental leave works in two layers. The employer must allow unpaid parental leave of up to 12 months after 12 months of service, while government-funded Parental Leave Pay, extended to 26 weeks on 1 July 2026 and set at the national minimum wage rate, is usually passed through the employer’s payroll. Super is also paid on Parental Leave Pay by the ATO after the financial year ends, so the employer does not fund it.

Annual leave loading, a 17.5% top-up commonly seen in Australian awards, is not an NES entitlement. It applies only where the award, enterprise agreement or contract provides it, so check the role before assuming it.

Without an Australian company, a UK business can use an employer of record that employs the staff and runs Australian payroll. Through Employer of Record Australia, we sign the employment contract, withhold PAYG, pay super on each payday and handle the state registrations, while your managers lead the person’s work.

The alternative is a proprietary company (Pty Ltd), registered with ASIC, which then needs an ABN, PAYG registration, a workers’ compensation policy, payroll tax registration where wages pass the state threshold, and payroll software that reports through STP. That route makes sense once a regional team is planned. How the employer of record model works in detail is set out in employer of record for Australian hires.

State labour hire licensing is worth raising early. Queensland, Victoria, South Australia and the ACT have laws that can cover businesses supplying workers to others, and Same Job Same Pay orders under the Fair Work Act can affect on-hired pay. A good provider will explain how it deals with both; the questions to ask before signing list covers this.

For this we bill from USD 560 per employee each month, equal to about AUD 797 if you convert at the ECB’s published 24 September 2026 rate. Salary and the statutory costs are invoiced on top, so the fee never hides inside the pay figure.

Prepare the salary, the state and the award position before the offer, because those three facts decide most of the Australian cost and contract terms.

• State the base salary and the 12% super as separate lines, since Australian candidates sometimes quote packages inclusive of super.
• Name the state or territory of work for payroll tax, workers’ compensation, public holidays and long service leave.
• Check whether a modern award covers the role and, if so, which classification applies.
• Confirm work rights; the Skills in Demand visa (subclass 482) is the main employer-sponsored route.
• Decide how IP, confidentiality and any restraint clauses will be drafted under Australian law.

On 7 September 2026 the federal government published an exposure draft that would stop employers using non-competes for staff paid under the high income threshold. It is not law, and consultation closes on 2 October 2026, but UK firms drafting restraints now should follow its progress. As drafted, it would also reach co-worker non-solicitation clauses and no-poach agreements between businesses, so a restraint package copied from a British template deserves a fresh look.