Employing your first employee

Jennifer Ritchie . Wednesday, October 26, 2016
Employing your first employee

Some of my most recent clients were small businesses with questions relating to hiring staff.  Whilst there is a raft of information out there it can be difficult to sift through to determine exactly what is required when hiring your first or subsequent employees.  If you are a busy sole trader or small business owner thinking about hiring your first employee this blog will help you understand what is required to bring them on board and have them hit the ground running.

Your people should be your greatest asset.  After all they are the ones your customers will interact with, so it is really important they fit with the culture you're creating for your business.  You don't want someone lacking in enthusiasm whilst being an ambassador for your business!  For guidance on the recruitment process you can read our earlier blog article Employing people the right way.

There are a number of things to consider before you make the leap and start recruiting.  Don't think of hiring an employee as a one-off event!  In the first instance you will need to consider what type of employment is best suited to your business right now.  Is it a full-time, part-time, casual employee or a contractor that you need?  Each of these employment types come with various terms and conditions so you should think carefully about the type of work your employee would be performing, hours required to fulfil the requirements of the position and the longevity of the role.  If you are facing a particularly busy period but can't see this continuing into the New Year, employing a fixed-term employee would make more sense than hiring a permanent employee.

There are numerous Government websites available to assist in determining the correct type of employment.

What to consider

The Fair Work Ombudsman has a great resource you can access to help guide you through the process of hiring an employee.  It can be found at Guide to hiring new employees - Fair Work Ombudsman.  The following is an excerpt from this document.

There are a number of conditions that apply to all employees employed in the national system and these are known as the National Employment Standards (NES).  You will need to determine what Award (if any) your employee would come under and know your responsibilities under the Fair Work Act 2009.  Employees not covered by a specific award are still entitled to the national minimum wage and the NES.

Rates of Pay

Rates of pay vary depending on the award your employee is employed under.  They are based on the employee's duties and other things like experience and qualifications.

Record-keeping and pay slips

You must keep written time and wage records for each employee.  This includes records about:

  • their employment
  • pay
  • overtime
  • hours of work
  • leave
  • superannuation contributions
  • termination of employment
  • agreements relating to an individual's employment including individual flexibility agreements and guarantees of annual earnings
These records must be kept for at least seven years.  Visit Fair Work record keeping for detailed information.

You will also be required to give all employees a pay slip within one day of paying their wages.  For a template pay slip, go to Fair Work templates.


National and State laws cover equal employment opportunity and anti-discrimination in the workplace.  Employees or potential employees cannot be discriminated against because of their race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Taxation and Superannuation

Under the Pay as you go (PAYG) withholding rules, you have an obligation to collect tax from payments you make to employees and some businesses so they can meet their end-of-year tax liabilities.

Generally if you pay an employee $450 or more (before tax) in a calendar month you have to pay super guarantee (SG) on top of their wages.

The Superannuation Guarantee is currently 9.5% until 30 June 2018. 

Workplace health and safety and worker's compensation

It is your responsibility to provide a healthy and safe workplace for your employees.

If you employ a worker in the NT you must arrange a workers' compensation policy through a Northern Territory approved insurer.

In Queensland you need to insure your workers through WorkCover Queensland, unless you meet certain criteria and can self-insure.

What to give your new employee

For your new employee to understand their rights and responsibilities, it is recommended they receive:

  • Letter of offer
  • Position Description
    • Duties and responsibilities
    • Skills and experience
    • Hours you want the employee to work
  • Fair Work Information Statement
  • Tax File Number Declaration Form
  • Superannuation Standard Choice Form (from ATO)
Are you ready to take the leap and employ someone?  Do it the right way and contact us at Ritchie Human Resources to help you through this exciting phase for your business.

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