Ask HN: Payroll and benefits for international remote employees? | Hacker News Reader

Ask HN: Payroll and benefits for international remote employees?

6 pointsbradt3 comments

My business is based in Canada and I'm about to hire my first employee, an Australian citizen located in Australia. I've talked to several HR outsourcing firms (TriNet, ADP) and they all say I need to register an entity in Australia and setup payroll and benefits there. My lawyer has advised me to consider treating the employee as a contractor, but consult an Australia lawyer to make sure this conforms to Australian law. How do HN'ers handle payroll and benefits for remote employees? Do you treat them as contractors?

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I am an Australian now living in Canada, but in my Australian business I always "employ" people as a contractor, which simplifies things a lot. You do not have to pay superannuation, although I still pay workplace health and safety, but that's only a few hundred dollars. All the contractor has to do is register an ABN (free and can be done online) and send you monthly invoices.

Also be aware that in Australia people usually pay for their own health insurance if they want private health insurance.

Just be careful to set things up so it looks like your contractor is really a contractor. Even if you have a contract agreement the tax office will declare him to be an employee if that's what he looks like to them (paid like an employee, works full time, you're his only client etc).

What steps do you take to make it look like they are a contractor? Also, would you recommend having a lawyer draft the contract agreement, or is adapting a template good enough?

Just think to yourself, what would make them look like a freelancer/consultant/contractor. For example, they work from their own location (obviously the case in your situation), have their own pty ltd company, if they have other clients, they do marketing/advertising, they use their own equipment (even if you reimburse them, which is normal for consultants), don't pay benefits or superannuation etc. Obviously not all of these are feasible but the more the better. Most of these things have to be done by the contractor.

I think you will be fine, it certainly seems reasonable to contract with a local consultant rather than hire someone. I am definitely not an expert. Yes I would recommend some advice from a lawyer. I can give you the details of my Australian lawyer if you like, they are used to working with startups.

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