Australia

Currency

Australian Dollar (AUD)

Payroll Frequency

Semi-Monthly / Monthly

Employer Taxes

15.85%-18.85%

About Australia

Australia is the sixth largest country in the world, while also being relatively isolated from the rest of the world (sometimes called the “island continent”). Although there are more than 200 spoken languages amongst its population, English is the most spoken language, followed by Mandarin. Having been a former colony, British culture dominates the country despite multi-ethnic migration to its shores.

The Australian economy had a GDP of A$1.69 trillion in 2017, making it the second-wealthiest country in per capita terms, after Switzerland. Its economy has faced some challenges, but the country emerged from the 2009 recession with minimal damage. Having such a strong economy has come with its own challenges, the primary being a fiscal deficit caused by the government prior to 2009 which has affected the effectiveness of subsequent governments. Despite this, Australia is highly competitive in technology, service delivery, manufacturing, and innovation and science services. The political stability, robust legal system, and bureaucracy in the country has also greatly enhanced transparency in civic life.

Company Formation Services in Australia

Starting a business in Australia involves choosing a suitable legal structure, registering the business with the Australian Securities and Investments Commission (ASIC), and ensuring compliance with tax and employment laws. The most commonly registered entities include private companies (Pty Ltd), public companies, sole traders, and foreign branches.

Thanks to its business-friendly environment, Australia offers a relatively smooth setup process. However, understanding the legal, regulatory, and taxation framework is essential. With the right guidance, entrepreneurs can efficiently navigate the process and focus on growing their business in a competitive market.

Company Types

Private Company (Pty Ltd)

This is the most popular business structure in Australia, especially for small and medium-sized enterprises. A Pty Ltd company is a separate legal entity, meaning shareholders have limited liability. It must have at least one director who resides in Australia and can have up to 50 non-employee shareholders. Shares in a private company cannot be offered to the public. This structure provides flexibility, credibility, and access to business deductions and tax concessions.

Branch of a Foreign Company

Foreign companies looking to operate in Australia without forming a separate local entity may register as a foreign company with ASIC. This structure allows businesses to maintain legal continuity with their parent company while conducting local operations. However, branches are subject to Australian taxation and compliance, and the foreign entity remains liable for its branch’s activities. Annual financial reporting and local agent appointment are mandatory.

Partnerships

A partnership in Australia is formed when two or more individuals or entities run a business together. There are three types: general partnerships, limited partnerships, and incorporated limited partnerships. Each partner shares profits, losses, and liabilities as agreed upon. Partnerships are not separate legal entities, so partners are personally responsible for debts. They offer ease of formation and minimal compliance but come with higher risk due to shared liabilities.

Incorporation Requirements

Minimum Capital

There is no legal requirement for minimum paid-up capital to incorporate a company in Australia. This is especially helpful for startups or SMEs entering the market with limited resources. However, companies are encouraged to hold sufficient working capital to meet business needs and regulatory expectations. Proper financial documentation helps improve investor confidence and smoothens banking relationships.

Foreign Ownership

Australia allows 100% foreign ownership of private companies, making it highly appealing to global entrepreneurs. Foreign shareholders must meet the same registration requirements as local ones, including providing identification documents and tax details. Although foreign investors have broad freedoms, they must comply with the Foreign Investment Review Board (FIRB) regulations, especially in sensitive sectors like agriculture, defense, or telecommunications.

Local Director or Resident Requirements

At least one company director must be an Australian resident for a proprietary limited company. This requirement ensures that ASIC and other authorities have a point of contact within the jurisdiction. While additional directors can reside overseas, local representation is critical for maintaining operational oversight, tax filings, and legal correspondence.

Registered Office Address

A company must have a registered office address in Australia. This location serves as the official correspondence point for government, legal, and tax matters. The address must be physical (not a P.O. box), and someone must be present during standard business hours to receive mail or notices. Virtual offices are allowed as long as these conditions are met.

Incorporation Documentation

To register a company in Australia, the following documents and details are typically required:

Reserved company name (via ASIC)
Completed Form 201 (application for registration)
Constitution or Replaceable Rules
Director and shareholder details
Proof of registered office address
Identification documents (passports, driver’s license)
Consent to act as director or secretary
TFN and ABN application (post-registration)

Incorporation Process

1. Reserve a Company Name

The first step is checking availability and reserving a company name through ASIC’s online portal. The name must be unique and not misleading. You may choose to operate under your company name or register a separate business name later.

2. Prepare and Submit Documentation

Once the name is secured, you need to compile and submit the required incorporation documents, such as director consents, office address proof, and Form 201. It’s important that the details are accurate and consistent across all documentation to avoid delays.

3. Register with ASIC

After submitting the documents, ASIC will review the application. If everything is in order, you’ll receive a Certificate of Registration, which includes your Australian Company Number (ACN). This certificate is your proof of legal business establishment in Australia.

4. Register for Tax

Next, register your company with the Australian Taxation Office (ATO) to receive a Tax File Number (TFN) and Australian Business Number (ABN). If your annual turnover is expected to exceed AUD 75,000, GST registration is also mandatory. For employers, registering for PAYG withholding is essential.

5. Open a Corporate Bank Account

To operate your business, you’ll need a local business bank account. Most banks require the ACN, ABN, director IDs, and a copy of the company constitution or governing rules. In some cases, bank representatives may require an in-person visit by at least one director.

6. Complete Statutory Registrations

If you plan to hire staff, you must register for the Superannuation Guarantee, Pay-As-You-Go (PAYG) withholding, and ensure compliance with the Fair Work Act. Businesses must also contribute to WorkCover insurance and follow local labor regulations regarding employee entitlements, payroll, and workplace safety.

With its transparent legal system, robust infrastructure, and strong economic foundations, Australia remains a premier choice for businesses looking to expand globally. While the incorporation process is relatively straightforward, adhering to local regulations is essential for long-term success. That’s where Aadmi can help. As your trusted partner in corporate formation, HR consulting, and ongoing compliance, Aadmi ensures a smooth, reliable entry into the Australian market.

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Employment Relationship

• Permanent Employment

In Australia, permanent employees are employed on an ongoing basis until either an employer or an employee ends the employment relationship. Permanent employees can be full-time or part-time depending on their working hours. They are entitled to paid leave days, right to notice period, redundancy pay, and, in some cases, they are entitled to request flexible working arrangements. Casual employees have the right to request their employers to convert their employment to full-time or part-time (permanent) after 12 months of employment with a regular pattern of hours on an ongoing basis for at least the last 6 months. Employers may be able to change an employee’s full-time employment to part-time or casual employment without agreement from the employee if the employment contract allows it. Such change must not be due to discrimination, or if the employee has exercised their workplace right, or for other reasons protected by law.

• Fixed-Term or Specific-Purpose Contracts

In Australia, an employment contract is an agreement between an employer and an employee that sets out terms and conditions of employment. A contract can be in writing or verbal. A contract must include the type of employment, working hours, entitlements, etc. Employers must provide casual employees with an information statement regarding their work as soon as possible upon hiring. Employers must give a statement again after 6 months of employment, again after 12 months of employment, and 12 months thereafter. Small businesses are not required to give this statement at the 6-month period.

• Temporary Employment Contratcs

In Australia, the terms ‘temporary employment contracts’ and ‘temporary employees’ are not recognized. The equivalent recognizable terms are ‘casual employment contracts’ and ‘casual employees.’ A person is a casual employee if they accept an employer's job offer, knowing there is no firm advance commitment to ongoing work, and they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract. Either party can end employment without notice unless notice is required by a registered agreement, award, or employment contract. For this reason, casual employment is considered a ‘shift by shift’ employment arrangement. Casual employees are entitled to a higher hourly pay rate than equivalent full-time or part-time employees ("casual loading") since they are not entitled to benefits such as sick or annual leave. Casual employees may request conversion to permanent employment. Employers have 21 days to respond to these requests. The employer may deny the requests if the employee still qualifies as a casual employee, accepting the change would mean the violation of a mandatory recruitment process, or there are reasonable operational grounds not to accept the change. Casual employees who have worked for their employer for 12 months (having worked a regular pattern of hours on an ongoing basis for at least the last 6 months) need to be offered the option to convert to full-time or part-time (permanent) employment by their employer. Employers must give every new casual employee a Casual Employment Information Statement before, or as soon as possible after, they start their new job.

Probationary Period

In Australia, employers can put their employees on a probationary period (also referred to as ‘probation’) to assess if employees are suitable for the role and business. The employer decides on the length of the probationary period. It typically ranges from 3 months to 6 months at the start of employment. The probationary period is not a separate period of employment. While on probation, employees typically continue to receive the same entitlements as someone who is not on probation. The only commercial difference is that an employer may offer the base-level notice of termination during probation, and then additional notice of termination (above the base level under the National Employment Standard) once the employee passes probation.

Working Hours

The standard workweek in Australia is 38 hours. Awards, certified agreements, and Australian Workplace Agreements generally contain provisions setting out ordinary hours of work, rest breaks as well as overtime and penalty rates. New South Wales – awards prescribe working weeks not exceeding 40 hours Queensland – awards mandate that employees cannot be required to work more than: 6 days in any 7 consecutive days 40 hours in any 6 consecutive days 8 hours in any day South Australia and Tasmania – awards prescribe standard working hours similar to the other states. Eligible employees can request flexible working arrangements, such as changes to hours, patterns, or locations of work. Employees covered by an award also have some extra rights when asking for flexible working arrangements. Employees who have worked with the same employer for at least 12 months can request flexible working arrangement. From February 2024, employees have the right to disconnect from their work outside of their normal working hours. They can refuse to monitor, read or respond to contact from an employer or a third party, unless such a refusal is unreasonable.

Holidays / PTO

• Statutory Holidays

2026

January 1 - New Year's Day
January 26 - Australia Day
April 3 - Good Friday
April 6 - Easter Monday
April 25 - ANZAC Day
December 25 - Christmas Day
December 26 - Boxing Day

2027

January 1 - New Year's Day
January 26 - Australia Day
March 26 - Good Friday
March 29 - Easter Monday
April 25 - ANZAC Day
December 25 - Christmas Day
December 26 - Boxing Day

• Paid Annual Leave

In Australia, full-time and part-time employees are entitled to a minimum of four weeks of paid annual leave for every 12 months of continuous service. Shift workers are entitled to five weeks of paid annual leave. Casual workers are not eligible for annual leave. It is up to each employer and employee to agree on when and for how long annual leave can be taken. Annual leave accumulates from the first day of employment, even if an employee is in a probationary period. The leave accumulates gradually during the year, and any unused annual leave will roll over from year to year. If the employee resigns or is dismissed, their accrued, unused annual leave must be paid out on termination. Employees also receive entitlements for long (and usually continuous) service. In most jurisdictions, workers are entitled to 3 months’ leave after working for the same employer for 15 years.

• Sick Leave

In Australia, sick and carer’s leave comes under the same leave entitlement. It is also known as personal/carer’s leave. Full-time employees receive 10 days each year. Part-time employees receive a proportion of 10 days each year, depending on their hours of work. This leave is paid at an employee’s base pay rate for each hour or part of an hour of leave they take. An employee has to let their employer know that they are going to take sick or carer’s leave. Employers can ask for medical certificate as proof for even 1 day of leave.

• Maternity Leave

In Australia, eligible parents are entitled to 20 weeks of Parental Leave Pay following the birth or adoption of a child. Pregnant employees may begin their leave up to 6 weeks in advance of the expected date of delivery, but no later than the date of the child’s birth. Individuals must notify their employer at least 10 weeks before the child’s due date or date of adoption. Claims for Parental Leave Pay may be submitted up to 3 months before the child’s expected date of birth or adoption, and up to 52 weeks after. Employers who offer employer-funded paid parental leave are prohibited from refusing an employee such leave in the event of a stillbirth or the death of the child within the entitled leave period. The scheme provides eligible parents up to 24 weeks of Parental Leave Pay at the national minimum wage.

• Paternity Leave

In Australia, male employees may be entitled to Parental Leave Pay of up to 24 weeks, provided they fulfill eligibility criteria. Parental leave benefits are also covered under government-funded parental leave. To be eligible for this payment, an employee must be: The biological father of the child The partner of the birth mother The adoptive parent The partner of an adoptive parent The person caring for a child born of a surrogacy arrangement Employers who offer employer-funded paid parental leave are prohibited from refusing an employee such leave in the event of a stillbirth or the death of the child within the entitled leave period.

Termination of Employment

• Notice Period

In Australia, employers must give minimum periods of notice to employees based on the employee's continuous service, as follows: 1 week's notice for 1 year or less of service 2 weeks' notice for service between 1 and 3 years 3 weeks' notice for service between 3 and 5 years 4 weeks' notice for more than 5 years of service Employees over 45 years old, who have worked for an employer for at least 2 years get an extra week of notice. A contract may generally be summarily terminated if the employee is fired because of serious misconduct (e.g., engaging in theft, fraud, or assault).

• Severance Benefits

In Australia, there is no provision for severance pay except for redundancy. The amount of redundancy pay varies between 4 and 16 weeks’ salary, depending on the length of an employee’s continuous service. The obligation to issue severance pay does not apply to small business employers (employers with fewer than 15 employees). Casual employees, apprentices and those dismissed for gross misconduct are not entitled to redundancy pay. When a business is bankrupt, employees can get help through the Fair Entitlements Guarantee (FEG). The FEG is available to eligible employees to help them get their unpaid entitlements.