Hiring and onboarding

Hiring your first employee: checklist and costs

Before your first employee starts, register for PAYG withholding, set up payroll that reports through Single Touch Payroll, take out workers compensation insurance in your state, and work out which award and classification applies. On or before day one, give them the Fair Work Information Statement, collect a TFN declaration and super choice, and start keeping records. The base cost is the wage plus 12% super on qualifying earnings, plus workers compensation premiums and, for larger payrolls, payroll tax.

Updated 5 November 2026. General information, not legal advice.

What do I need to decide before I make an offer?

Decide whether the person is an employee or a contractor, which award (if any) covers the job and at what classification, and whether the role is full-time, part-time, casual or fixed term. Those choices set the minimum pay, the paperwork and the leave they get.

Employee or contractor: the label in a contract doesn’t decide it. See contractor or employee before engaging anyone on an ABN.
Award and classification: most jobs are covered by a modern award. Use the Fair Work Ombudsman’s Find my award tool, then match the duties to a classification level. Our modern award compliance guide covers rates, penalties and allowances.
Award-free roles: the national minimum wage from 1 July 2026 is $26.44 an hour or $1,004.90 a week (Fair Work Ombudsman). Award rates are often higher.
Employment type: casuals get a loading instead of paid leave, but a casual working a regular pattern can later give notice to become permanent. The casual vs part-time calculator compares the cost.

Which registrations do I need before the first pay day?

You must register for PAYG withholding before you make the first payment you need to withhold from, even if the amount withheld is nil. You also need payroll software that reports through Single Touch Payroll each time you pay, a way to pay super through SuperStream, and workers compensation insurance.

Set-up before the first pay run
Item	What to do	Source
PAYG withholding	Register through the Australian Business Register or your tax or BAS agent, before the first payment	ATO
Single Touch Payroll	Use STP-enabled software and report wages, withholding and super each time you pay	ATO
Super	Choose a default fund and pay contributions through SuperStream	ATO
Workers compensation	Take out a policy with the scheme in each state or territory where staff work	Safe Work Australia
Payroll tax	Register only if your total wages exceed your state or territory threshold	Payroll tax guide

Workers compensation is compulsory for employers everywhere in Australia, but each state and territory runs its own scheme with its own insurer arrangements and premium rates. Safe Work Australia lists the authority for each jurisdiction (for example SIRA in NSW, WorkSafe Victoria, WorkCover WA and ReturnToWork SA).

What must I give a new employee when they start?

Give every new employee the Fair Work Information Statement before, or as soon as possible after, they start. Casuals must also get the Casual Employment Information Statement, and fixed term employees the Fixed Term Contract Information Statement.

Written contract or letter of offer setting out the role, award and classification, employment type, hours, pay and any probation. Templates: full-time contract and casual contract.
[Fair Work Information Statement](https://www.fairwork.gov.au/employment-conditions/information-statements/fair-work-information-statement) (Fair Work Act ss 124–125).
[Casual Employment Information Statement](https://www.fairwork.gov.au/employment-conditions/information-statements/casual-employment-information-statement) for casuals, again after 12 months with a small business employer, or after 6 and 12 months and then every 12 months with a larger employer.
TFN declaration so you can work out how much tax to withhold.
Superannuation standard choice form, so they can nominate a fund.
Safety induction covering the hazards of the job, emergency procedures, first aid and how to report incidents. Providing the information, training, instruction and supervision workers need is part of every employer’s primary duty of care (in Victoria, s 21 of the OHS Act 2004).

If a new employee says they have applied for a TFN, withhold at the standard rates for 28 days. If they still haven’t given you a TFN after 28 days, withhold at the top rate until they do (ATO payer obligations).

Which fund do I pay a new employee’s super into?

Pay into the fund the employee chooses on the standard choice form. If they don’t choose, request their stapled super fund from the ATO; if they don’t have one, pay into your default fund.

You can request stapled fund details through ATO online services once the employee has accepted your offer. Under Payday Super, from 1 July 2026 super guarantee is worked out on each employee’s qualifying earnings and paid for each payday. The first contribution for a new employee, or to a new fund, must reach the fund within 20 business days of the payday; after that the deadline is generally 7 business days (ATO payment deadlines).

When an employee gives you their TFN, you must pass it to their super fund within 14 days (ATO). The Payday Super deadline calculator works out due dates for each pay run.

What records and pay slips do I need from the first pay?

Give a pay slip within 1 working day of each pay day and keep time and wages records for 7 years. Records must be in English, legible and readily accessible.

Set up the employee file before the first shift: start date, employment type, award and classification, pay rate, hours, leave, super fund and a copy of the documents above. Details of what each record must contain, and the penalties for getting it wrong, are in employer record-keeping obligations. The pay slip template shows the required fields. If you plan to pay in cash, read paying employees in cash first.

How much does a first employee cost?

Start with the wage, then add super guarantee at 12% of qualifying earnings for 2026–27, a workers compensation premium that depends on your state, industry and payroll, and payroll tax only if your total wages exceed your state threshold.

Example: award-free full-time employee on the national minimum wage, 2026–27
Component	Annual amount	Notes
Wages ($1,004.90 x 52 weeks)	$52,254.80	Includes paid annual and personal leave taken during the year
Super guarantee (12%)	$6,270.58	Assumes all wages are qualifying earnings
Wages plus super	$58,525.38	Before workers compensation and other on-costs
Workers compensation	Varies	Set by your state scheme or insurer, by industry and wages
Payroll tax	Usually nil for one employee	Only payable above your state or territory threshold

Paid leave doesn’t add to the annual wage figure, but it does mean paying for 4 weeks of annual leave and up to 10 days of personal leave a year for a full-time employee while they are not working, plus any cover you need. Award penalty rates, allowances, overtime and leave loading add to the cost for award-covered roles. The hiring cost calculator and workers compensation premium calculator give a fuller estimate.

Are there different rules once I have staff?

Businesses with fewer than 15 employees are small business employers under the Fair Work Act. Their employees have a 12-month minimum employment period before they can claim unfair dismissal, and most small businesses don’t pay NES redundancy pay.

Most other obligations, including award rates, the National Employment Standards, pay slips and records, apply from the first employee. See small business Fair Work obligations for what changes at fewer than 15 employees, the Small Business Fair Dismissal Code if a hire doesn’t work out, and the 30-minute HR compliance audit to check your set-up after the first few pay runs.

Questions

Do I need to register for PAYG withholding before hiring?

Yes. You must register before your first payment that is subject to withholding, even if you don’t withhold any tax from it.

What is the minimum wage for a new employee from 1 July 2026?

The national minimum wage is $26.44 an hour or $1,004.90 a week for award-free employees. Award-covered employees must get at least their award classification rate, which is often higher.

What super rate applies to a new employee in 2026–27?

Super guarantee is 12% of qualifying earnings. Under Payday Super it is paid for each payday, with 20 business days allowed for the first contribution for a new employee and generally 7 business days after that.

Do I have to give a casual employee the Fair Work Information Statement?

Yes. Casuals get both the Fair Work Information Statement and the Casual Employment Information Statement before, or as soon as possible after, they start.

Sources

Checked against these sources on 5 November 2026. Spotted something out of date? Tell us.