Hiring Your First Employee Guide

Before you advertise

The biggest hiring mistakes happen before the job ad goes live. Three decisions shape everything downstream:

• Employment type. Full-time, part-time, casual or fixed-term each carry different entitlements. Casuals trade leave for a loading and have conversion rights; permanents accrue annual and personal leave. Pick the type that matches the actual pattern of work, not the one that feels cheapest.
• Which award applies. Almost every SME role sits under a Modern Award, which sets minimum pay, penalties, allowances and rostering rules. The Fair Work Ombudsman's tools will help you identify the right award and its current rates — never guess, and never assume a salary means the award stops applying.
• The true cost. The wage is only part of it. Budget for superannuation, workers compensation premiums, leave accruals, payroll tax if you're near your state's threshold, and equipment. Confirm the current rates and thresholds with the ATO and your state revenue office rather than relying on last year's figures.

Registrations you need first

Get these in place before the first pay run, not after:

• PAYG withholding registration with the ATO, so you can withhold tax from wages.
• Workers compensation insurance through your state or territory scheme — this is compulsory from your first employee, and in most states from day one of employment.
• STP-enabled payroll software. Single Touch Payroll means every pay run is reported to the ATO as it happens. Spreadsheet payroll is no longer a realistic option.
• A default super fund that accepts contributions, plus a process for offering choice of fund and checking for a stapled fund via the ATO when a new starter doesn't nominate one.

Day-one paperwork

Have a starter pack ready: a written employment contract (role, type, hours, pay, probation, notice, confidentiality), the Fair Work Information Statement — plus the casual version if relevant — a tax file number declaration, a super choice form, bank and emergency contact details, and your key policies. A signed contract before the start date protects both sides; sorting it out in week three protects no one.

Running payroll properly

Set a regular pay cycle and stick to it. Every pay run needs a compliant payslip, STP reporting, correct super calculated on ordinary time earnings, and records kept for the period Fair Work requires. Note that super payment timing is shifting under the payday super reforms — check the ATO's current guidance on when contributions must reach the fund, because late super triggers the Super Guarantee Charge and it is unforgiving.

Common first-employer mistakes

• Calling an employee a contractor. The label doesn't decide it — the substance of the relationship does, and sham contracting carries serious penalties.
• Skipping the position description. Without one, probation reviews and performance conversations have nothing to anchor to.
• Paying a flat rate that quietly undercuts the award once penalties and allowances are counted. Do the comparison properly.
• No induction. Even a one-page checklist for the first week dramatically improves how quickly someone becomes useful.

Where this fits in your back office

Your first hire is usually the moment a business discovers its people processes don't exist yet. Building them once — contracts, onboarding, payroll rhythm — makes every later hire cheaper and faster. See how the pieces connect in people and payroll and the connected back office.

This is general information for Australian employers, not advice on your specific situation — employment law questions worth money are worth a professional's eyes.