Businesses expanding into Australia often search for "PEO" services to manage local hiring, payroll, and compliance. But PEOs, by definition, operate under a co-employment model that's common in the United States, and can only be used if you already have a legal entity in the country.

For companies without a legal entity in Australia, what they really need is an employer of record (EOR). Or, if you have entities but want administrative support, you may be interested in an administrative services only (ASO) solution.

Deel is trusted by thousands of companies worldwide for global hiring. With legal infrastructure in over 150 countries and deep expertise in Australian labor laws, Deel enables you to hire, pay, and manage talent in Australia, including through Deel EOR.

This guide explains how the Australian employment model works, how a PEO differs from an EOR, what services EOR and ASO solutions offer in Australia, and how Deel can simplify compliant hiring across all states and territories.

Understanding local employment models in Australia

What is PEO?

A professional employer organization (PEO) is a co-employment model used primarily in the US. Under a PEO arrangement, the employer retains control over the day-to-day management of employees but shares HR, payroll, and compliance responsibilities with the PEO. Critically, the business must already have a legal entity in the US to use a PEO.

What is EOR?

In contrast, an employer of record (EOR) becomes the legal employer of your team through its local entity, allowing you to compliantly hire and operate in Australia without setting up a subsidiary. The EOR assumes full legal responsibility for payroll, superannuation, employee entitlements, taxation, and contracts.

Australia’s employment landscape features numerous obligations that vary based on award coverage, employment type, and geography. For example:

• Employers must follow National Employment Standards (NES), covering leave, termination, and work hours

• Superannuation contributions must meet or exceed the statutory rate

• Payroll and taxes must be reported via Single Touch Payroll (STP) to the Australian Taxation Office (ATO)

• Employers must ensure compliance with state-based workers' compensation schemes

While HR outsourcing firms operate in Australia, none provide full legal employer status unless they are registered to act as an EOR.

What services does an EOR provide in Australia?

An EOR offers a full-service model to help international companies employ local workers without needing their own Australian entity. Key service categories include:

Contract drafting and onboarding

An EOR prepares compliant employment agreements that align with Australian legislation and any applicable Modern Awards or Enterprise Agreements. These contracts outline job details, compensation, work location, probation terms, leave entitlements, and termination conditions. The EOR also manages onboarding activities such as ID verification, super fund selection, and bank account collection.

You provide the role requirements and compensation structure, and the EOR issues offer letters and manages onboarding using its local legal entity.

Payroll processing and tax remittance

Australian payroll is highly regulated. An EOR processes payroll according to local standards and lodges required tax information using Single Touch Payroll (STP). They handle Pay As You Go (PAYG) tax withholding, calculate superannuation, and pay the correct employer contributions.

At the end of the financial year, the EOR issues income statements and ensures compliance with the ATO, while maintaining accurate payroll registers and auditing compliance across states.

With Deel Global Payroll, you can integrate all countries into one dashboard, simplifying reporting, analysis, and disbursement.

Benefits administration and HR support

An EOR sources and manages private health, dental, life insurance, and income protection plans tailored to the Australian market. Employees are supported throughout their lifecycle with policy templates, manager resources, and compliance guides. HR support covers National Employment Standards, long service leave eligibility, flexible working requests, and dispute resolution under the Fair Work framework.

Immigration and visa support

An EOR can sponsor work permits and prepare and submit all immigration paperwork, track expiry dates, and renew permits on time. This is critical if you have specialized talent or need to relocate senior managers. You avoid the complexity of the visa process or partnering with your own entity, since the EOR holds all permit authority.

Workers’ compensation and insurance

An EOR registers your employees under its workers' compensation policy, handles premium calculations, and manages claim filing and rehabilitation coordination. They also provide employer liability insurance covering wrongful dismissal, health and safety fines, and third-party suits, shifting risk off your books.

Local benefits benchmarking and plan design

EORs provide insights into market-standard compensation and benefits packages. This may include salary benchmarking, superannuation matching, car allowances, wellbeing budgets, and fringe benefit packaging. They help businesses create attractive offers while maintaining regulatory compliance.

Ongoing compliance and liability management

EORs monitor updates to labor law, award wage adjustments, and state-specific obligations. They proactively revise policies, issue compliant contracts, file workplace notifications, and manage audits. If employees pursue action through Fair Work or state tribunals, the EOR acts as the official employer, shielding the client from direct exposure.

Benefits of using an Australia EOR

No local entity needed

With an EOR, you don’t have to set up an Australian subsidiary or navigate lengthy business registration processes. The EOR acts as the legal employer, handling all local payroll, tax, and compliance requirements under its own entity and ABN. This lets you enter the Australian market rapidly and with far less administrative burden.

Faster hiring and onboarding

Using Australia EOR services enables you to hire and onboard employees in just a few days, far faster than the 6 to 12 weeks typically required to register a local subsidiary and implement payroll infrastructure. Your team can move quickly to test the market, launch pilot projects, or fill urgent roles without sacrificing compliance or the employee experience.

Full compliance coverage

Australian employment law is detailed and rigorously enforced, from the Fair Work Act 2009 to state-based labor hire licence regimes. EORs specialize in maintaining total compliance with modern awards, NES entitlements, payroll reporting (STP), superannuation contributions, and privacy protections. You gain peace of mind knowing the EOR bears responsibility for employment contracts, statutory filings, and legal updates.

Scalable headcount

Whether you need to hire one employee or rapidly scale to dozens, EORs offer unmatched flexibility. You can scale your team up or down with ease, take on project-based workers, or shift resources between states—all without the friction or risk of forming and liquidating local entities.

Lower admin costs

By working through an EOR, you avoid the recurring costs of entity setup, accounting, corporate tax filings, and maintaining a physical office. The EOR bundles statutory payroll, benefits, and HR support into a simple fee structure, delivering predictable, transparent costs and freeing your HR team to focus on people rather than paperwork.

Smooth off-boarding

Australian termination laws require specific notice periods, redundancy procedures, and documentation. An EOR manages the entire exit process—from compliant notifications to payout of unused leave and severance liabilities—protecting your organization from unfair dismissal claims or wage disputes. Your brand reputation remains intact, and your risk is minimized.

Can I use a global PEO in Australia?

Terms like "global PEO" or "international PEO" are often used interchangeably with EOR. While there is no formal PEO model outside the US, some providers position their employer of record services outside the US as PEO services, which can cause confusion.

If you don’t have an Australian entity and want to compliantly employ local talent, what you need is an EOR that can meet Australian compliance standards, provide local payroll and benefits, and support HR functions.

Using ASO solutions in Australia

An administrative services only (ASO) solution helps companies with a legal entity in Australia streamline their HR and payroll operations. It’s ideal for organizations that want to maintain control of their workforce while offloading administrative complexity.

Typical ASO services include:

• Processing payroll and distributing payslips

• Lodging tax information through STP

• Managing employee leave, entitlements, and records

• Administering superannuation payments and fringe benefits

• Coordinating basic benefits offerings

Unlike an EOR, an ASO does not become the legal employer. You remain responsible for legal compliance, HR decisions, and any claims or litigation.

Benefits of using an ASO in Australia

Cost savings

ASOs can provide meaningful cost advantages by removing insurer profit margins and eliminating the need for fixed premium markups. Because claims are paid only when incurred, employers may realize significant savings during low-utilization periods.

Plan design flexibility

An ASO model allows employers to design benefit plans that are tailored to their specific workforce needs, demographics, and strategic priorities. Unlike traditional insurance offerings, which often limit employers to pre-designed, inflexible plans, ASOs offer customization that can adapt as business needs evolve.

Transparency and data access

One of the most valuable features of an ASO arrangement is access to real-time claims data. This transparency enables employers to track healthcare spending, identify cost drivers, and analyze trends. With this insight, organizations can make informed decisions about benefit plan modifications, wellness strategies, and vendor partnerships.

Improved employee experience

Many ASO providers enhance the employee experience through high-touch customer support and easy-to-use digital tools. These resources help employees better understand and engage with their benefits, improving satisfaction, trust, and overall utilization of the plan.

PEO vs EOR vs ASO

How Deel supports workforce expansion in Australia

Deel offers a unified platform for hiring, paying, and managing workers in Australia. Whether you need full legal employment support or help with payroll processing, Deel delivers:

• Localized contract templates and onboarding workflows

• Compliant Australian payroll with STP and superannuation integration

• Real-time payroll capabilities for instant G2N calculations

• Built-in compliance with the Fair Work Act and state-specific laws

• Local immigration support for employer-sponsored visas

• Benefits administration and HR support

• A single system for managing global contractors, direct hires, and EOR employees

Book a demo to learn how Deel can simplify your Australian hiring strategy.