Hiring Employees - Employer Obligations

You have never employed anyone before, and need to know what you need to do about your Employer Obligations.

Step1:Contact the ATO and register your ABN Number for PAYGW (Pay as you go Withholding.) How to Register for PAYGW
If you are manually calculating wages, the Income Tax Witholding rates have changed from July 1st 2009. Please see the ATO website for the latest TaxScales, www.ato.gov.au/taxtables

Step 2: Get some free Tax File Number Declarations from your local Post Office or sometimes a newsagent. All new staff members must fill these in and hand back to you. You need to fill in the second half with your details and return the original copy to the ATO address listed on the form within 14 days.

Employees with more than one job must nominate which Employer is they wish to claim the Tax Free Threshold from. Please see Tax on a Second Job Information Sheet for more information.

Step 3: It is recommended that you put an offer of employment or Employment contract in writing to a prospective employee outlining position, commencement date, status, Remuneration, duties and responsibilities, and any other terms and conditions(ie Confidentiality)

Step 4: Rate of Pay - always best to check the award rate for the position that you are hiring for. In Australia, there are Federal and State awards. To look up an award in your industry go to the Workplace Authority Website.

If in doubt ring the Workplace Info line on 1300 363 264. Always best to be 100% sure. If you pay any staff the incorrect rate, you will have to backpay any previous wages.

Step 5: Determine whether you want to hire the employee on a Full Time, Part Time or Casual Basis. Definitions vary according to the award.

Step 6: You will have Superannuation Obligations. All employers must currently pay 9% of their gross wages to the person's choice of Superannuation Fund. Please go to our specialised Superannuation Information for Employers Page for more information on this topic.

Step 7: Wages Queries - please go to our Employers Obligations Employees Wages Information Page or a summary on How to Pay Wages, Information you are required to keep (record Keeping) and Information you need to provide to your employees.

Step 8: By Law, you must cover any staff with Workers Compensation Insurance. There are heavy penalties if you do not do this. Rates vary depending on the Industry you are in. In Australia, registering for Workers Compensation varies, and the Insurance Companies who cover Workers Comp may vary. Western QBE is in most states. You contact them to register, estimate your wages for the next financial year, and they will estimate a premium. At the end of the financial year you declare your actual wages, and any differences are adjusted accordingly. Please note in South Australia, you must contact the Workers Compensation Board of South Australia, and declare your actual wages and pay on a monthly basis. I believe they may be changing this system.