Five steps to hiring your first employee

So you’re looking to hire your first employee. That’s great news! It shows that your business is expanding. In fact, businesses who had at least one employee from 2010-2014 had a 13% higher survival rate than those with no employees. Before bringing just anyone on board, however, you need to understand that extra manpower entails a whole new string of legal obligations, liabilities, expenses and, of course, paperwork. The checklist below will help ensure that you have all you need to take on your employee.

1. Know the minimum standards

In Australia, employers are required to follow the minimum statutory terms and conditions set out in the Fair Work Act 2009. These standards provide a safety net for employees and cover a variety of issues such as annual leave and termination.

The National Employment Standards (NES)

This is a list of 10 minimum employment entitlements that must be included in all employee contracts. These standards set out your responsibilities as an employer and includes: 

  • Maximum weekly hours
  • Requests for flexible working arrangements
  • Parental leave and related entitlements
  • Annual leave
  • Personal carers leave and compassionate leave
  • Community service leave
  • Long service leave
  • Public holidays
  • Notice of termination and redundancy pay
  • Fair Work Information Statement

 Awards and Agreements

You may have noticed that the NES doesn’t cover wages and working conditions. This is where Awards and Agreements come in. They cover things like pay, hours of work, breaks, allowances and overtime. Awards are industry specific and cover most occupations in Australia. An agreement, on the other hand, can be tailored to meet the needs of particular enterprises (E.G. the Australian Communications and Media Authority). Agreements are more complicated to set up and often require the help of a professional.   

2. Know your tax and superannuation obligations


As an employer, it is your responsibility to make sure your employees are able to fulfil their tax obligations. The best way of doing this is through the Pay-As-You-Go tax scheme. PAYG is where you withhold tax from your employee’s wages and pay it to the ATO on a regular basis. In addition to withholding amounts from wages, you must provide payment summaries to your employees and lodge an annual report to the ATO.

Super Guarantee

The super guarantee requires that you make super payments on top of the salary or wages to your employees. The minimum contribution of 9.5% is to be paid to either an employer-nominated fund or a fund of your employee’s choice. You must give them the option to chose their own fund which they can nominate on their Tax File Number declaration form. These super payments are tax deductible for your business.

3. Keep your records and pay slips

Did you know that you have to keep time and wages records for 7 years? These should cover the lifetime of your employee, from their induction up until the day they leave. The records should cover a range of categories such as number of hours worked to any leave that’s been taken.

Pay slips must be given to an employee within 1 working day of payday. Pay slips help you keep accurate records and ensures that your employees receive the correct pay and entitlements. They can be either electronic or hard copy.  

4. Make them an offer

Before your employee can start work, there are a few formalities you need to take care of. Firstly, in addition to contacting your new employee over the phone you should provide a signed and written letter of the offer. Next, you should send them a copy of the contract for them to review and sign on their first day. The contract sets out all the terms and conditions of employment. In addition to the contract you must give them a Fair Work Information Statement and Tax File Declaration form. Lastly, you should provide any relevant company policies such as code of conduct, uniforms etc. 

5. Have an induction

Conducting an induction is a great way to get your new employee settled. You should show them around the office and explain your workplace policy and procedures. It will also give them an opportunity to ask any questions they might have.

Hiring your first employee is no small task. Hopefully this summary will help make your responsibilities more clear!

Shaun Meltzer