How does an EOR in Australia work?

An Employer of Record (EOR) is a third-party organisation that handles the legal responsibilities of employing individuals on behalf of another company. An EOR provider takes care of administrative and compliance tasks like employee onboarding, payroll processing, tax withholding, benefits administration, and compliance with local labour laws. 

In addition to legal employment for businesses, EOR providers like Native Teams also help freelancers, remote workers, and digital nomads secure a regularly “employed” status and receive employment benefits in their residential countries. 

The cost for Employer of Record services in Australia depends on the specific EOR provider, the number of employees you want to onboard, and the scope of services you require.  
Check out our pricing page to see which plan works best for your business.

An EOR provider will take over the role of legal employer for your company, meaning they will take full responsibility for employing team members, processing payroll, administering benefits, withholding taxes, and other essential functions. As such, EOR providers are mostly beneficial for companies that want to hire individuals in specific countries but don’t have their own legal entities there. 

PEO providers cover only part of these responsibilities, such as HR admin, payroll processing, and benefits administration, while the client company remains the legal employer of the team members. Therefore, PEO providers can be a good option for businesses that have legal entities in every country of hiring but need assistance handling their essential HR responsibilities.

EOR providers’ main responsibility is assuming the role of legal employer for your team members in a specific country. This means that your employees are formally employed through the providers’ legal entities in the country, while you’re responsible for the daily management of their operations.

By being the legal employer, the EOR provider is also responsible for processing payroll, drafting employment contracts, administering benefits, handling compliance-related matters, and providing additional HR support if needed. This allows the client company to focus on their core business operations while the EOR provider takes care of employment management and all the related administrative and compliance duties. 

Yes, using EOR services in Australia is fully legal. In fact, one of the responsibilities of EOR providers is to help you work in compliance with Australian labour laws and regulations so you can hire team members or regulate your employment status in the country without opening a legal entity there. 

Opening a company in Australia is a complex and time-consuming process that requires a lot of legal expertise and resources. The process includes registering with the authorities, obtaining a tax number, opening a business bank account, and even finding a physical office space before you can hire anyone from the country. 

EOR providers help you skip the complex process and hire more quickly and cost-effectively. The provider will legally employ your new team members and manage payroll, taxes, and benefits for them in full compliance with local labour laws. 

In other words, you can instantly hire employees in Australia and expand your business in the Australian market without opening legal entities or navigating the complex labour regulations of the country.