What Is Employer of Record? Meaning & Examples
An employer of record is a third party that legally employs a worker on behalf of another business, which directs the daily work. In Australia the EOR carries the employment obligations, including award pay, leave, payroll, tax and super, while the client business usually keeps control of the tasks and the work site.
The term comes from overseas hiring, so check carefully how it differs from labour hire, contracting and direct employment before you sign anything.
How employer of record works
The client chooses the worker, and the EOR becomes the employer of that person on paper. Here is how that usually runs.
- The client finds or selects the worker, then signs a services agreement with the EOR that sets the fee, the role and the term.
- The EOR issues an employment contract that meets the Fair Work Act, the relevant modern award and the National Employment Standards.
- The EOR runs payroll, withholds tax, reports through Single Touch Payroll and pays super at the same time as wages from 1 July 2026.
- The client directs the daily work, provides the equipment and site induction, and signs off timesheets before the payroll cut-off.
- The EOR handles leave records, payslips within 1 working day of payday and the 7-year record-keeping requirement.
- When the engagement ends, the EOR manages notice, final pay and any redundancy obligations, with the client paying the cost under the agreement.
Examples of employer of record
Arrangements vary, so treat these as typical scenarios rather than a template.
- An overseas software company hires a sales manager in Sydney through an EOR because it has no Australian entity and needs the person working quickly.
- A mining services firm places a specialist engineer on a short project through an EOR while the client manages the technical work on site.
- A construction contractor engages a safety adviser for a year, and the EOR pays wages while the contractor supervises, with a white card checked before day one.
- An office-based start-up tests a new market with two staff in Melbourne, using an EOR to cover payroll while it sets up its own entity.
- A warehouse operator keeps a returning seasonal worker on an EOR payroll so the person's continuous service is tracked without a new contract each season.
Employer of record services: rules and key points
The table lists the main rules that apply. It uses the verified figures only, so check your award and agreement for anything that varies.
| Item | What applies | Where to check |
|---|---|---|
| Minimum pay | Award rate, or the national minimum wage of $26.44 per hour from 1 July 2026 for award-free employees | Fair Work Ombudsman pay guide |
| Casual loading | 25% under most awards, with casuals able to request conversion after 6 months, or 12 months with a small business employer | Award and Fair Work Ombudsman |
| Super | 12% of ordinary time earnings for 2026-27, paid within 7 business days of payday | ATO |
| Payroll tax | NSW rate is 5.45% of taxable wages above the $1,200,000 annual threshold for 2026-27, so ask the EOR who is liable | Revenue NSW |
| Labour hire licence | Victoria, Queensland, South Australia and the ACT have schemes, and NSW does not at present | State regulator and NSW Government |
| Safety duties | The EOR and the client are both PCBUs and must manage risks so far as reasonably practicable | SafeWork NSW |
Related terms
- PEO (professional employer organisation): a co-employment model common in the United States, where the PEO shares employer duties with the client.
- Labour hire: a provider supplies its own employees to a host business that directs the work.
- Host employer: the business that directs a worker supplied by a labour hire provider or EOR and shares site safety duties.
- Sham contracting: misrepresenting an employment relationship as a contracting arrangement, which is illegal.
- Payroll provider: a service that processes pay and tax but does not become the legal employer.
Employer of record FAQ
What is a PEO?
A professional employer organisation is a co-employment provider, common in the United States, that shares employment duties with a client. Australian law has no direct equivalent, so providers here describe themselves as employer of record, labour hire or payroll services. Check who is the legal employer in your contract.
Is an EOR the same as labour hire?
No. A labour hire provider supplies workers from its own pool to a host business. An EOR employs a worker the client has already chosen. Both can be the legal employer, but labour hire licensing rules in Victoria, Queensland, South Australia and the ACT may apply to labour hire only.
Who is responsible for safety and pay?
The EOR is responsible for wages, super and entitlements as the legal employer. Safety is shared, because the client directs the work and controls the site. Both must meet their WHS duties, and the worker can report concerns to either party or to SafeWork NSW.
This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. For the wider picture, read what is labour hire, or visit our host employer labour hire page to talk to us.