A foreign-owned Australian company that takes on its first employee must register for PAYG withholding before the first pay run, report every pay through Single Touch Payroll, pay super to the employee's fund under the Payday Super rules, give the right Fair Work statements and hold workers compensation insurance in the relevant state. None of this depends on where the parent is based: an Australian Pty Ltd that employs people in Australia is an Australian employer.
Most of the work sits with your payroll provider and accountant. The point of this guide is to give the overseas owners a map, so nothing falls between the group's HR team and the local advisers.
Before the employment contract is signed
Three decisions come first, and each one is hard to unwind later.
Who is the employer. If you already have an Australian subsidiary, it is normally the employing entity. Employing directly from the overseas parent is possible but brings separate registrations and tax questions; your tax adviser should sign that off. Some groups use an employer of record for the first few hires and move staff across once the subsidiary is ready.
Employee or contractor. Business.gov.au points employers to the award system and the National Employment Standards (NES), which apply to employees whether or not an award covers them. A label in the contract doesn't decide the question; the working relationship does. Note one trap: the ATO treats independent contractors paid mainly for their labour as employees for super guarantee purposes, so "contractor" does not mean "no super".
Pay and conditions. Most employees are covered by a modern award that sets minimum pay and conditions for the industry or occupation. If no award or agreement applies, the employee must still receive at least the national minimum wage. Check the award before you make the offer, not after the first payslip.
Tax registrations: get these in place first
The company needs an ABN before most of this can happen. If it doesn't have one yet, see ABN and TFN for foreign-owned companies.
| Registration | When | Who does it |
|---|---|---|
| PAYG withholding | Before the first payment you need to withhold from, even if nothing is actually withheld | Online services for business, or your tax or BAS agent |
| Single Touch Payroll | Set up STP-enabled software before the first pay run | Payroll provider |
| Fringe benefits tax | Only if you provide fringe benefits and have an FBT liability | Tax agent |
| State payroll tax | Only once total wages exceed the state or territory threshold, which varies | Accountant, with the state revenue office |
The ATO's PAYG withholding registration page is explicit that registration must come before the first payment subject to withholding. Late registration is one of the most common first-hire mistakes for overseas groups, usually because the offshore finance team assumes the local accountant has done it.
To use Online services for business, each person acting for the company needs a Digital ID such as myID, linked to the company through Relationship Authorisation Manager (RAM). If every director lives overseas, decide early who will hold that access, or leave the registrations to your tax agent.
Day one paperwork
On or before the start date, the employee should receive and complete:
- Fair Work Information Statement, given before or as soon as possible after they start. Casual employees also get the Casual Employment Information Statement; fixed-term employees get the Fixed Term Contract Information Statement before or soon after they sign the contract.
- TFN declaration, completed online. If the employee doesn't provide a TFN, you must withhold at the highest rate.
- Super standard choice form, within 28 days of them starting work. Since 27 March 2026 the ATO lets you request the employee's stapled fund details at the same time as you give them the choice form.
- Right to work check. Business.gov.au's hiring guide tells employers to confirm the person can legally work in Australia using the Department of Home Affairs' free online service. This matters when you're bringing someone over from the parent on a visa.
Every pay run
Once wages start, the rhythm is fixed:
- Withhold PAYG from wages using the ATO tax tables, and pay it to the ATO on your activity statement cycle.
- Report through Single Touch Payroll each time you pay employees. STP reports carry salary and wages, PAYG withheld and super, so the ATO sees the payroll in close to real time.
- Pay super for that payday. From 1 July 2026, super guarantee of 12% of qualifying earnings must reach the employee's fund within 7 business days of payday. The detail, including the 20-business-day allowance for a new employee's first contribution, is in our Payday Super guide.
- Issue a payslip within one working day of paying the employee.
Record-keeping is longer than many overseas groups expect. Business.gov.au says employment records must be kept for 7 years, and tax and super records for 5 years.
Insurance and safety
Workers compensation is compulsory and run by each state and territory, not federally. The rules for registering, the insurer you use and how premiums are calculated differ between, for example, New South Wales and Queensland, so the insurance must match where the employee actually works. A remote employee in Perth generally needs cover arranged under Western Australian rules, even if the company's registered office is in Sydney; your broker or the state scheme will confirm. Business.gov.au also suggests employers consider public liability insurance.
Work health and safety laws are also state and territory based. Your group's global policy is a starting point, but have it reviewed locally.
Why the directors care about payroll
Payroll is where Australian law reaches the directors personally. Under the ATO's director penalty regime, directors can become personally liable for the company's unpaid PAYG withholding and super guarantee charge, as well as GST. A newly appointed director can also inherit exposure to existing unpaid amounts if they aren't resolved within 30 days of appointment.
That is why a resident director will ask about payroll status at onboarding and at each annual cycle. It isn't distrust of the overseas finance team; the director's own liability depends on the answer. The mechanics are covered in director penalty notices.
A practical sequence for the first hire
Say a Singapore parent wants its first sales hire in Melbourne to start on 1 February. Working backwards:
- 8 weeks out: confirm the Australian company is the employer, check the award, and decide on payroll software or a provider.
- 6 weeks out: register for PAYG withholding, confirm STP is enabled, and select a default super fund and a payment method that will meet the Payday Super deadline.
- 4 weeks out: take out workers compensation in Victoria and have the WHS policy reviewed locally.
- Contract signed: issue the Fair Work Information Statement and collect the TFN declaration and super choice form.
- First payday: run payroll, lodge STP, pay super so it arrives within the deadline, and issue the payslip.
If you'd like to see how employer obligations sit alongside the company's ASIC dates, the compliance calendar maps the annual cycle. A tech business entering Australia should also read our notes for SaaS and tech subsidiaries.
We don't give employment, tax or payroll advice. Your accountant, payroll provider or employment lawyer should confirm the settings for your business. If you opt in on our Resident Director + Compliance package, our system tracks evidence that super payments were made, and we ask about lodgement status, so the directors can see where things stand.
General information current at 27 October 2026. Not legal, tax or employment advice; confirm your position with your own adviser.
Frequently asked questions
Can our overseas parent employ Australian staff directly instead of the Australian company?
Sometimes, but it brings its own registrations and can raise tax questions for the parent. Most groups that already have an Australian Pty Ltd employ through it. Ask your tax adviser before choosing.
Do we need to register for PAYG withholding if we only hire one person?
Yes. The ATO requires registration before the first payment you need to withhold from, and that applies even if the amount withheld turns out to be nil.
Is a contractor treated differently?
For tax and Fair Work purposes a genuine contractor is not an employee, but the ATO treats contractors paid mainly for their labour as employees for super guarantee. Getting the classification wrong is a common and expensive mistake, so check it before the first invoice.
Does our resident director have to run payroll?
No. Payroll is normally run by your accountant, bookkeeper or payroll provider. The directors are still responsible for the company meeting its obligations, which is why unpaid PAYG withholding and super can lead to director penalties.
Official sources
- ATO: Before you hire your first worker ato.gov.au
- ATO: Pay as you go withholding registration ato.gov.au
- ATO: Single Touch Payroll ato.gov.au
- ATO: About Payday Super ato.gov.au
- business.gov.au: Guide to hiring employees business.gov.au
Checked against these sources on . Fees, thresholds and forms change: confirm with the source before you lodge.
General information about Australian law and practice, not legal or tax advice for your circumstances. Check the official sources, or ask your adviser, before you act.