Who employs: you don't always need an Australian company. A foreign operator can incorporate a local subsidiary, register itself as a foreign company with ASIC, or remain a non-resident employer that registers for PAYG withholding directly — but whichever path you take, one entity ends up holding all the registrations.
Which number: every employer or payer must have either an ABN or a WPN. Non-residents not entitled to an ABN run payroll under a withholding payer number instead — with a notable quirk: WPN holders are exempt from Single Touch Payroll reporting until 30 June 2033.
The gate: PAYG withholding must be registered before the first payment you're required to withhold from. Super needs setup (not registration), state payroll tax registers only once wages cross the state threshold — but with windows as short as 7 days — and workers' compensation runs state by state.
Three ways to be the employer
Hiring in Australia does not always require setting up an Australian company first — but each path carries its own registrations, and the practical question is which entity will hold the tax, super, payroll-tax and workers'-compensation registrations described below.
- Incorporate a local subsidiary. An Australian company is registered through the Business Registration Service, and ASIC issues an Australian Company Number (ACN) on registration. Directors must hold a director ID before the company is registered, and the company must provide two addresses: a registered office and a principal place of business. If the foreign parent does not itself carry on business in Australia, it does not have to register as a foreign company.
- Register as a foreign company with ASIC. Required where the overseas company itself will be carrying on business in Australia. Registration is applied for on ASIC Form 402 with a certified certificate of incorporation, the constitution and a memorandum appointing a local agent; on approval ASIC issues an Australian Registered Body Number (ARBN). The local agent — an individual or an Australian company resident in Australia — must be authorised to accept service of process and notices on the foreign company's behalf.
- Remain a non-resident employer with no Australian entity. The ATO's guidance for foreign resident employers contemplates exactly this: the foreign employer either registers for PAYG withholding itself or arranges for an Australian associate or affiliate to undertake the withholding obligations on its behalf, and meets super obligations for work performed in Australia. Foreign residents doing business in Australia carry the same core employer obligations as local employers — super contributions, PAYG withholding, and fringe benefits tax where benefits are provided.
You will also see a fourth route marketed: a third-party legal employer, or "employer of record". It is widely used commercially, but no Australian government source defines or endorses the model — the compliance obligations in this guide simply attach to whichever entity is the legal employer.
Whether merely employing staff in Australia amounts to "carrying on business" — and so triggers ASIC foreign-company registration — is fact-dependent. It's a point to take advice on rather than assume, in either direction.
ABN or WPN: which number you'll run payroll under
As an employer or payer, you must have either an Australian Business Number (ABN) or a withholding payer number (WPN) — one of the two sits behind everything payroll reports to the ATO.
A non-resident entity is generally entitled to an ABN only where it is carrying on an enterprise or business in Australia, or makes sales connected with Australia in the course of carrying on an enterprise (the enterprise itself doesn't have to be located in Australia). Some non-resident employers won't meet that test even though their people work in Australia.
The WPN is the fallback: the ATO gives a withholding payer number to certain partners in partnerships and non-individual entities that are not eligible for an ABN but have PAYG withholding obligations and are required to pay super for eligible employees — the ATO's own examples include embassies and international entities.
The ATO doesn't publish a single page walking a non-resident employer through this end-to-end, but its guidance fits together: an entity that isn't required to have an ABN can still register a PAYG withholding account — using form NAT 3377, by phoning the ATO's business line, or through a tax agent — and the WPN is what non-ABN payers with withholding and super obligations are given. Putting those pieces together, an employer with no ABN entitlement runs its payroll under a WPN.
Three things to know about operating under a WPN:
- Super doesn't switch off. WPN holders must make super guarantee contributions for their eligible employees or become liable for the super guarantee charge (SGC).
- STP is off until 2033. Employers with a WPN are exempt from Single Touch Payroll reporting until 30 June 2033.
- Voluntary STP goes agent-only from July 2026. From 1 July 2026, a WPN holder that chooses to report STP anyway can only lodge through an authorised representative, such as a registered tax or BAS agent; those who stop voluntary reporting move to PAYG payment summaries.
PAYG withholding: register before the first pay
This is the hard gate in the timeline. You must register for PAYG withholding before you make the first payment you're required to withhold from — and the obligation applies even if the amount you actually withhold from that payment turns out to be nil.
How you register depends on the identifier above. A business with an active ABN can add PAYG withholding online — through ATO Online services for business, a registered tax or BAS agent, or SBR-enabled software. An entity without an ABN registers a standalone PAYG withholding account (form NAT 3377 or by phone) and operates under a WPN.
Super guarantee: setup, not registration
There is no ATO registration for the super guarantee — the obligation attaches automatically. In general all employees are eligible, whether full-time, part-time or casual, with no minimum earnings threshold, and including temporary residents. The SG rate is 12% for 2025–26 (and stays 12% for 2026–27).
What has to be in place by the time contributions fall due is the setup:
- Select a default super fund
- Offer employees a choice of fund
- Request stapled super fund details where an employee doesn't choose
- Provide employees' TFNs to their funds within 14 days
- Set up systems to pay contributions electronically to the right fund
One nuance for foreign operators: a non-resident employer doesn't have to pay super for Australian-resident employees for work they do outside Australia — but a foreign resident employer will usually be required to pay super for resident and foreign-resident employees performing work in Australia, or the super guarantee charge applies.
State payroll tax: a threshold trigger with a short window
Payroll tax is generally not a day-one registration: it's triggered only when your Australian taxable wages exceed the relevant state threshold. Every state and territory sets its own thresholds and rates — the three largest, for 2025–26:
- New South Wales: tax-free threshold $1,200,000, rate 5.45% on wages above the threshold. Monthly thresholds are published per days-in-month, and Revenue NSW expects you to register within 7 days after the month your total Australian wages first exceed the monthly threshold.
- Victoria: from 1 July 2025 the rate is 4.85% (1.2125% for regional employers), with an annual deduction of $1,000,000 ($83,333 monthly). The deduction phases out between $3 million and $5 million in annual taxable wages, and surcharges apply above $10 million. You must register once you pay wages in Victoria and your taxable Australian wages exceed the threshold — with penalties or interest possible for failing to register when required.
- Queensland: threshold $1.3 million in annual Australian taxable wages; rates 4.75% (annual Australian taxable wages of $6.5 million or less) and 4.95% above that, with a discounted rate for eligible regional employers. Registration is required within 7 days of the first month in which your — or your group's — Australian wages exceed $25,000 a week.
The thresholds test your total Australian wages — not just wages paid in that state — and Queensland counts your group's wages, so a small in-state presence can still put you over the line. If you pay wages in a state not listed here, check that state's revenue office: thresholds, rates and registration windows all differ.
Workers' compensation: state by state
Workers' compensation is regulated separately under the laws of each state and territory, and employers must get workers compensation insurance from an authorised insurer under each relevant scheme. Each jurisdiction has its own regulator: WorkSafe ACT, the State Insurance Regulatory Authority (NSW), NT WorkSafe, WorkCover Queensland, ReturnToWorkSA, WorkSafe Tasmania, WorkSafe Victoria and WorkCover WA. In most cases cover needs to be in place from the point of first employment, though small-wages exemptions exist in some states.
NSW is the notable example: an employer is generally not required to hold a workers insurance policy if it pays $7,500 or less in annual wages — unless it employs an apprentice or trainee, or is a member of a group for premium purposes.
The identifiers your payroll software carries
Single Touch Payroll has been a mandatory obligation for employers generally since 1 July 2018 (20 or more employees) and 1 July 2019 (19 or fewer), with a report lodged through STP-enabled software each time employees are paid. Each STP report is generated for the pay cycle by the combination of ABN, branch and BMS ID — so payroll software needs all three configured per employer, plus a Payroll ID per employee:
- ABN (or WPN). Identifies the employing entity. A WPN stands in where the employer has no ABN entitlement — noting that WPN holders are STP-exempt until 30 June 2033, so payroll software configured for a WPN-only employer is generally producing payment summaries rather than STP pay events.
- Branch number. A PAYG withholding branch is formed where a business entity separately registers a branch to suit its structural, management and accounting arrangements. Where a business has one ABN but multiple branches, each branch has an individual branch number, and STP reporting must be conducted separately for each branch. A payer with no branch number is simply instructed to leave the branch-number field blank on payment summaries.
- BMS ID. A business management software identifier that uniquely identifies the source of employee data sent to the ATO as a specific instance of payroll software — it acts like a serial number telling the ATO which payroll solution sent the report. Some products assign it automatically; others let the employer nominate its own.
- Payroll ID. A key identifier for each employee in the payroll which, together with the payee details and TFN, lets the ATO uniquely identify the taxpayer.
Getting the trio right matters beyond day one: if reported year-to-date amounts are transferred to a different ABN/branch/BMS ID combination — for example, on a payroll-software migration — you need to tell the ATO, or employees will see duplicate income statements.
Record the ABN (or WPN), branch and BMS ID against the employer record before the first pay event, and treat any change to that combination as a migration event with an ATO notification attached — not a config edit. That single habit is what keeps employee income statements from duplicating.
Quick answers
Can a foreign company employ people in Australia without a local entity?
Generally yes. A foreign company can incorporate an Australian subsidiary, register itself as a foreign company with ASIC (required where it carries on business in Australia — ASIC issues an ARBN and a local agent must be appointed), or remain a non-resident employer: the ATO's guidance lets a foreign resident employer register for PAYG withholding directly, or arrange for an Australian associate or affiliate to withhold on its behalf. Whichever path is chosen, one entity ends up holding the same registration set before first payday.
What is a WPN, and when does it apply instead of an ABN?
A withholding payer number (WPN) is an identifier the ATO gives to payers that have PAYG withholding obligations but are not eligible for an ABN. Every employer or payer must have either an ABN or a WPN. A non-resident entity is generally entitled to an ABN only where it carries on an enterprise or business in Australia (or makes sales connected with Australia), so an employer that fails that test registers a PAYG withholding account without an ABN — form NAT 3377, by phone, or through a tax agent — and operates under a WPN. WPN holders keep full super guarantee obligations and are exempt from STP reporting until 30 June 2033.
Do I need to register for the super guarantee?
No — there is no super guarantee registration. The obligation attaches automatically to eligible employees (full-time, part-time or casual, with no minimum earnings threshold, including temporary residents) at 12% for 2025–26. What must be in place before contributions fall due is the setup: select a default fund, offer employees a choice of fund, request stapled-fund details where no choice is made, provide employees' TFNs to their funds within 14 days, and be able to pay contributions electronically.
When do I have to register for state payroll tax?
Only once your Australian taxable wages exceed the relevant state threshold — it is generally not a day-one registration. Thresholds and rates differ by state (2025–26: NSW $1.2 million at 5.45%; Victoria $1 million annual deduction at 4.85% metropolitan; Queensland $1.3 million at 4.75–4.95%). Once triggered, the windows are short: NSW expects registration within 7 days after the month your total Australian wages exceed the monthly threshold, and Queensland requires registration within 7 days of the first month your (or your group's) Australian wages exceed $25,000 a week.
One employer record, keyed the way the ATO expects
Ledra Pay carries the ABN or WPN, branch and BMS ID on the employer record and keys every pay event to that combination, tracks the per-state payroll-tax and workers'-compensation picture alongside the federal registrations, and keeps an auditable evidence trail behind each setup step — so first payday doesn't depend on a spreadsheet of identifiers.
See Australian payroll →Government sources
- ASIC — Register a foreign company in Australia (carrying on business, Form 402, ARBN, local agent; the subsidiary alternative).
- ASIC — Register a company (Business Registration Service, ACN, director ID, required addresses).
- ATO legal database — Foreign resident employers: your tax and super obligations (register for PAYG withholding or use an Australian associate/affiliate; super for work performed in Australia).
- ATO — Employing people in Australia (core employer obligations: super, PAYG withholding, FBT).
- ATO — Australian business number (ABN) for non-residents (entitlement test).
- ATO — Withholding payer number — super obligations (what a WPN is; SG contributions or SGC).
- ATO — PAYG withholding account registration (form NAT 3377 for entities without an ABN).
- ATO — Pay as you go withholding (register before the first payment subject to withholding, even if nothing is withheld; registration channels).
- business.gov.au — Register for PAYG withholding (registration before the first withheld payment).
- ATO — PAYG payment summary — Section C: Payer details (an employer or payer must have either an ABN or WPN; branch numbers).
- ATO — WPN holders reporting through STP (exemption to 30 June 2033; agent-only voluntary reporting from 1 July 2026).
- ATO — Setting up super for your business (the five setup steps; no SG registration).
- ATO — Work out if you have to pay super (eligibility with no minimum earnings threshold; non-resident employers and work outside Australia).
- ATO — Super guarantee rate (12% for 2025–26 and 2026–27).
- Revenue NSW — Payroll tax thresholds and rates.
- Revenue NSW — Register for payroll tax (7-day registration window).
- State Revenue Office Victoria — Payroll tax current rates.
- State Revenue Office Victoria — Register for payroll tax (when registration is required; penalties).
- Queensland Revenue Office — Payroll tax rates and thresholds.
- Queensland Revenue Office — Register for payroll tax ($25,000-a-week trigger; 7-day window).
- business.gov.au — Business insurance (workers' compensation from an authorised insurer; state and territory regulators).
- Service NSW — Get a quote for workers insurance (NSW exempt-employer rule at $7,500 or less in annual wages).
- ATO — What is STP? (mandatory from 1 July 2018 / 1 July 2019).
- ATO — STP Phase 2: Changing your payroll solution or employees' Payroll IDs (report keyed by ABN, branch and BMS ID; duplicate income statements).
- ATO — STP Phase 2: Definition of terms (BMS ID, Payroll ID).
- ATO — GST or PAYG withholding branch registration (how a withholding branch is formed).
- ATO — STP rules of reporting (STP reported separately for each registered branch).
Related
Non-resident employers: withholding, super and the treaty short-term visit exception.
Every registration and setup step before your first Australian pay run.
PAYG withholding, super and state payroll tax — what each is and who levies it.