Hiring in the US from Australia

On this page (7 sections)

Overview
Australia and the United States at a glance
The differences that matter most
Common compliance traps
How an EOR works in the United States
FAQs
Sources

USDLocal currency

Washington, D.C.Capital

Six time zones from Hawaii to the East Coast, 14 to 19 hours behind SydneyTime difference

Overview and why companies expand from Australia to the United States

The US is the world's largest economy and a priority market for Australian software, mining services, education and consumer brands.
A US-based sales or customer success team can work local hours and build relationships in person.
US talent pools in technology, finance and life sciences are deep, particularly in major hubs.
The E-3 visa gives Australian citizens a dedicated route to work in the US in specialty occupations.

For Australian employers, the United States feels both easier and harder. Easier, because most employment is at will and there is no statutory paid leave or national award system. Harder, because rules vary by state and city, health insurance is part of every competitive offer and the litigation environment rewards careful documentation.

Most Australian companies make their first US hires through an EOR, or register a US subsidiary (often a Delaware corporation) once they have a meaningful team.

Australia and the United States at a glance

Summary only. Figures were checked against the official sources listed below on 2026-10-08. Many rules depend on the employee's award, contract, state or province.
Topic	Australia	United States
Employment contracts	A written contract is not legally required but is standard practice. Employers must give every new employee the Fair Work Information Statement, plus the Casual or Fixed Term Contract Information Statement where relevant. A modern award or enterprise agreement usually sets minimum terms. Fixed-term contracts are generally limited to 2 years or 2 consecutive contracts.	Employment is "at will" in every state except Montana, so either side can usually end it at any time for any lawful reason. Written contracts are uncommon below executive level; an offer letter is the norm. Every new hire must complete Form I-9.
Probation	No statutory probation. In practice the unfair dismissal "minimum employment period" works as one: 6 months, or 12 months for small businesses with fewer than 15 employees.	No statutory probation. Because employment is at will, probation has little legal effect, except in Montana where a probationary period applies under state law.
Working hours	Maximum 38 ordinary hours a week plus reasonable additional hours under the National Employment Standards. Awards set overtime rates. Employees have a right to disconnect outside working hours unless refusing is unreasonable.	No federal cap on adult working hours. Under the Fair Labor Standards Act non-exempt employees earn 1.5 times their regular rate after 40 hours in a workweek. Some states, such as California, add daily overtime.
Minimum wage	National Minimum Wage of $26.44 an hour ($1,004.90 a week) from 1 July 2026. Most employees are covered by a modern award with higher minimum rates for their classification.	Federal minimum wage of $7.25 an hour. Many states and cities set higher rates, and the higher rate applies.
Annual leave	4 weeks paid annual leave a year for full-time employees (5 weeks for some shift workers), accruing progressively. Untaken leave is paid out on termination. Many awards add a 17.5% leave loading.	No federal right to paid vacation. Paid time off is set by employer policy and is a key part of a competitive offer.
Sick leave	10 days paid personal/carer's leave a year for full-time employees, plus 2 days unpaid carer's leave and 2 days paid compassionate leave per occasion. All employees can also take 10 days paid family and domestic violence leave a year.	No federal paid sick leave requirement for most private employers, but a growing number of states and cities mandate it.
Parental leave	Up to 12 months unpaid parental leave after 12 months of service, with the right to request 12 more. The government funds up to 26 weeks of Parental Leave Pay at the national minimum wage from 1 July 2026, paid through Services Australia rather than the employer.	The Family and Medical Leave Act gives eligible employees of employers with 50 or more employees up to 12 weeks of unpaid, job-protected leave. Several states run paid family leave programmes.
Public holidays	National public holidays such as New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day and Boxing Day, plus state and territory holidays. Employees who work on a public holiday are usually paid penalty rates under their award.	There are 11 federal holidays, but private employers are not legally required to give them off or pay a premium for working them.
Retirement and social security	Superannuation Guarantee of 12% of qualifying earnings, paid by the employer on top of wages. Since 1 July 2026 super must be paid each payday and reach the fund within 7 business days (Payday Super). There is no separate employer social security levy.	Social Security tax of 6.2% each for employer and employee on wages up to $184,500 (2026), plus Medicare of 1.45% each with no cap. No mandatory employer pension, although some states require access to a payroll savings scheme.
Payroll taxes	Employers withhold PAYG income tax from wages. Each state and territory charges payroll tax once total Australian wages pass a threshold, for example 5.45% above $1.2 million in NSW and 4.85% above $1 million in Victoria. Workers' compensation premiums are also payable.	Employers pay federal unemployment tax (FUTA) and state unemployment insurance, and withhold federal, state and sometimes local income tax. Registration is needed in every state where employees work.
Notice periods	Employer notice under the National Employment Standards: 1 week (up to 1 year of service) rising to 4 weeks (over 5 years), plus 1 week if the employee is over 45 with at least 2 years of service. Pay in lieu is allowed. Awards set employee notice.	No statutory notice for individual at-will terminations. The WARN Act requires 60 days notice of plant closings and mass layoffs for employers with 100 or more employees.
Dismissal protection	Unfair dismissal protection applies after the minimum employment period to employees covered by an award or agreement, or earning under the high income threshold of $190,100 (from 1 July 2026). General protections against adverse action apply from day one. Small businesses can follow the Small Business Fair Dismissal Code.	At-will dismissal is allowed, but not for discriminatory or retaliatory reasons under federal laws such as Title VII, the ADA and the ADEA, or under state laws.
Severance	Statutory redundancy pay of 4 weeks (1 to 2 years of service) rising to 16 weeks (9 to 10 years), then 12 weeks at 10 years or more, when long service leave usually takes over. Small businesses with fewer than 15 employees are generally exempt.	No federal severance requirement. Severance is often paid in exchange for a signed release of claims.
Mandatory benefits	Superannuation, workers' compensation insurance (state-based and compulsory), paid leave under the National Employment Standards and long service leave under state and territory laws, usually after 7 to 10 years of service.	Workers' compensation and unemployment insurance are compulsory. Under the Affordable Care Act, employers with 50 or more full-time equivalent employees must offer affordable health cover or risk a penalty.
IP and restraint clauses	Post-employment restraints are only enforceable if reasonable to protect a legitimate business interest. Employers generally own IP that employees create in the course of employment. The federal government has proposed banning non-compete clauses for employees under the high income threshold from 2027; this was not law at the last review.	Non-compete enforceability depends on the state. California, Minnesota, North Dakota and Oklahoma largely ban them. A 2024 Federal Trade Commission rule banning most non-competes never took effect. Invention assignment agreements are standard.
Visas and right to work	Every worker needs Australian work rights, which employers can check through VEVO. Sponsored skilled hires generally use the Skills in Demand (subclass 482) visa, which needs an approved sponsor. Some EORs can sponsor, many cannot.	Every hire needs I-9 verification. Sponsored routes include the H-1B (lottery-based) and the E-3 visa, which is reserved for Australian citizens in specialty occupations.

The differences that matter most

State law matters

Federal law sets the floor, but each state (and some cities) adds its own rules on minimum wage, overtime, paid sick leave, final pay timing, non-competes and leave. A hire in California faces very different rules from one in Texas. Before you hire, confirm which state the employee will work in and register there for payroll taxes.

At-will, but not risk-free

You can usually dismiss without notice, but discrimination and retaliation claims are common and can be costly. Document performance issues, apply policies consistently and consider a severance agreement with a release when ending employment.

Benefits drive offers

With no statutory paid leave and no universal public health insurance for working-age people, US candidates compare offers on health insurance, paid time off and retirement plans such as a 401(k). Expect to offer all three to compete for skilled staff.

Payroll taxes instead of super

Instead of 12% superannuation, US employers pay Social Security (6.2% up to the annual wage base, $184,500 in 2026) and Medicare (1.45%), plus federal and state unemployment taxes. Retirement plan contributions are voluntary but common.

Exempt and non-exempt classification

Under the Fair Labor Standards Act, employees are either exempt from overtime, based on their duties and salary level, or non-exempt and entitled to overtime after 40 hours a week. Misclassification is a frequent source of claims.

Common compliance traps

Hiring in a state where you aren't registered. Each state requires its own payroll tax registrations.
Exporting Australian leave policies without checking state rules. Some states require paid sick leave and regulate how PTO is paid out at termination.
Using non-competes without checking state law. They are largely void in California and several other states.
Missing I-9 verification, which must be completed for every new hire within set deadlines.
Assuming at-will means no process. Poorly documented dismissals invite discrimination claims.
Overlooking visa timelines. H-1B is lottery-based with annual caps; E-3 is often faster for Australians.

How an EOR works in the United States

A US EOR (sometimes structured through a PEO arrangement) employs your hire in their state:

The EOR registers for payroll tax in the employee's state if it isn't already.
It issues an offer letter and completes Form I-9 and tax forms.
It runs payroll, withholds federal, state and local taxes and pays employer payroll taxes.
It provides access to health, dental and retirement plans, often through a group arrangement.
You manage the work; the EOR manages employment compliance and terminations.

If you are moving an Australian employee to the US, they will usually need a visa such as an E-3, and an EOR or US entity willing to sponsor it.

Frequently asked questions

Is it easier to dismiss employees in the US than in Australia?

Generally yes. In every state except Montana, employment is presumed to be at will, so either party can end it without notice. But dismissals can't be discriminatory or retaliatory, and many employers still pay severance in exchange for a release of claims.

Do I have to offer health insurance to US employees?

Under the Affordable Care Act, employers with 50 or more full-time equivalent employees must offer affordable health cover or risk a penalty. Smaller employers aren't required to, but health insurance is a key part of a competitive offer. Many EORs offer access to group health plans.

Which US state rules apply to a remote employee?

Generally the rules of the state where the employee physically works. That includes minimum wage, paid sick leave, final pay timing and state income tax withholding. An EOR registers in the employee's state.

What is the E-3 visa?

The E-3 is a US visa reserved for Australian citizens to work in a specialty occupation, usually requiring a bachelor's degree or equivalent. It is not subject to the H-1B lottery. The employer files a labour condition application before the visa application.

Does an EOR remove US tax risk for my Australian company?

An EOR handles employment taxes. Whether your Australian company has a taxable presence in the US depends on its activities, such as whether your US employee signs contracts. Get US tax advice before your hire starts selling.

Sources

Last reviewed: 2026-10-08

Figures on this page were checked against these official sources on 8 October 2026. Rates and thresholds change, often on 1 January, 1 April or 1 July, so confirm current figures before relying on them.

New to the model? Start with what an Employer of Record is, then compareEOR costs and pricing models.

Hiring in the United States from Australia