Do I Need a Local Entity to Hire in Australia?

In Australia, a "local entity" typically means having a recognized presence that can act as the employer, such as a subsidiary or branch office. This setup allows you to be recognized locally as an employer and fulfill payroll and employment obligations.

Without a local entity, you can't effectively manage employer responsibilities like registering for taxes, running compliant payroll, and providing legally required employment terms. An EOR can serve as a compliant solution, allowing you to hire without the need for a local entity.

What is Required to Employ Someone in Australia?

• Local employing entity required to directly employ? Yes (you need to register with the Australian Business Register)
• Payroll registration required? Yes (you must register for PAYG withholding with the ATO)
• Withholding/tax remittance required? Yes (you need to withhold income tax from employee wages)
• Social contributions required? Yes (superannuation contributions are mandatory)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (statutory leave, superannuation, and other entitlements)
• Works council/collective agreements considerations? Usually (some industries have specific agreements)

Best Options If You're Hiring in Australia

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but it can be risky if the contractor is effectively treated like an employee.

While hiring contractors doesn't require a local entity, Australia has strict laws regarding worker classification. Misclassifying a contractor as an independent worker can lead to significant legal and financial repercussions. Here are some key points to consider:

• Ensure the contractor operates independently and isn't integrated into your business.
• Be cautious if the contractor works exclusively for you or if you control their work hours and methods.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Australia, depending on registrations and compliance requirements.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated AUD 1,000–3,000 per month ($650–$1,950)
• Payroll provider: Estimated AUD 100–300 per employee per month ($65–$195)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated AUD 1,500–5,000 per year ($975–$3,250)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., superannuation contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Australia

Hiring in Australia can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Australia quickly without establishing a local entity, eliminating incorporation costs and ongoing administration.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.