Australia is a wealthy and politically influential country with one of the largest economies in APAC. With a population of over 25 million people, Australian society is diverse and multicultural, drawing immigrants from every corner of the world: that diversity is reflected in Australia’s business landscape, which hosts an array of multinational organisations. While Australia has a proud tradition of welcoming immigrants, businesses seeking to move employees into the country for employment purposes should be aware of the relevant global mobility challenges, including visa rules and regulations.
To help you understand the global mobility process, and prepare your employees for life and work in Australia, check out our simple guide.
Australia Global Mobility Basics
When moving employees to a foreign country, employers should have a global mobility plan in place to manage a range of basic obligations and processes. For employees moving to Australia, employers should consider:
- Shipping personal items: When employees move to a different country they’ll need to think about the personal items that they’ll need in their new location. Employers may have to consider providing shipping costs for certain items, or provide a budget for employees to acquire them in their new location.
- Relocating family: Some employees will have family members that will be travelling with them to Australia. Your global mobility plan should take their needs into account, along with any additional visa requirements.
- Relocating pets: If employees wish to bring their pet with them to Australia there may be additional legal and immigration considerations. Australia has strict regulations concerning the immigration of animals.
- Travel requirements: Depending on their country of residence, relocation to Australia may be a significant travel consideration. Your global mobility plan should take into account the trips that employees may need to take to and from Australia.
- Residential property: When employees move to Australia, they may need to sell their residential properties or make arrangements to rent them out while they are away.
- Employment Tax - it is critical that employees are aware of any home and host location income tax and social security implications and obligations as a result of the relocation to Australia. This is generally done as part of a tax briefing which is something offered to internationally mobile employees. Further information on this can be found below.
There are several categories of permanent visa that may be suitable for employees entering Australia for the purposes of employment. Australia’s immigration system is overseen by the government’s Department of Home Affairs which imposes certain qualification requirements on each visa type - these include requirements for employee sponsorship and professional skill level.
The key visas that are suitable for mobile employees entering Australia for work include:
Regional visas: Australia’s regional visas are intended for skilled workers taking jobs in regional Australia. Employees must be nominated by an employer in Australia and meet skill, qualification, and language requirements. The categories of regional visa are:
- Regional Sponsor Migration Scheme (currently closed to new applications)
- Permanent Residence (Skilled Regional Visa)
Skilled migration visas: Like regional visas, this type of visa is intended for skilled employees taking jobs in Australia with the nomination and sponsorship of their employers. Skilled migration visas are available in the following categories:
- Employer Nomination Scheme visa
- Skilled Independent visa (available to New Zealand citizens)
- Skilled Nominated visa
- Skilled Regional visa (for employees that have previously worked in Australia on an eligible visa)
Business investment visas: Intended for individuals seeking to set-up or develop an existing business in Australia. Business investment visas are available in the following categories:
Global Talent visas: Intended for employees that have international recognition in an eligible employment field. The Global Talent visa requires the nomination of an Australian (or New Zealand) permanent resident or citizen, or an Australian organisation.
Employer’s should seek advice from an immigration specialist to ensure that the visa they are considering is the most appropriate based on the facts and circumstances of each individual case.
Compensation in Australia
Employers will need to consider employee compensation in Australia as part of their global mobility programme. Practically, this means considering the Australia dollar exchange rate along with the Australian income tax and social security (superannuation) obligations. Some Australian cities have high costs of living and employers may wish to take this, along with other location-specific costs such as transport, children’s education, and healthcare into account when considering relocation and compensation packages.
Healthcare in Australia
Australia has a universal public healthcare system known as Medicare, which is available to all Australian citizens and permanent residents. Expatriate employees in Australia may also be able to benefit from Medicare and employers should seek advice on whether it is applicable to that employee’s circumstances.
Health status may be a factor in the Australian visa process. Employees moving to Australia may be required to meet certain health requirements, including attending a health examination, in order to have their permanent residency confirmed.
Australia Payroll, Income Tax and Social Security Contributions
In Australia, income tax is collected via Pay As You Go (PAYG) withholding, as is the mandatory 2% Medicare levy. Employers must report the PAYG and other payroll information via Australia’s digital Single Touch Payroll system, which should be integrated with their company’s payroll software.
Payroll taxes in Australia vary by the state or territory in which the employee works. In addition to income tax and the Medicare levy, employers should also consider the Australian Fringe Benefits Tax, which applies to many non-cash benefits provided to employees such as company cars or private healthcare plans.
Employers must provide their employees with a PAYG payment summary at the end of the tax year, summarizing the payments and deductions that have been made.
Employers often offer a tax briefing with a tax adviser who can discuss the employment tax and payroll related position as a result of their assignment or relocation both from a home and a host country perspective.
Whilst Australia does not have a traditional social security system, Superannuation contributions require to be made by an employer on behalf of every employee who falls within the scope of the Superannuation rules.
Accordingly, employers should take the appropriate guidance in relation to Superannuation obligations and contributions when structuring the employment package of any individual relocating to Australia.
Australia is a large and geographically diverse country that experiences frequent hot and dry weather patterns. Accordingly, most of Australia’s major towns and cities are located around its more temperate coastal regions where employees moving to Australia will be able to find a wide range of accommodation options, from family homes, to townhouses and apartments. Similarly, Australia’s major residential areas are well served by modern amenities, public transport systems, schools, and hospitals.
Australia is a modern, progressive country with a diverse and multicultural population. Employees moving to Australia will find a diverse range of social activities and entertainment options from beautiful beaches and natural attractions, to vibrant urban environments. For some employees, the transition to Australia will be a significant cultural shift: with that in mind, it may be worth considering integration guidance as part of your Australia global mobility plan, including language lessons, introductions to civic and local culture, and guidance on financial and tax responsibilities.
Learn more about Australian global mobility considerations, along with payroll, tax, and business factors in our Global Insight Guide to Australia. We’d love to be able to help you or answer any of your questions. For more information, visit activpayroll’s Global Mobility page, or get in touch with us at email@example.com.