Hiring Your First Employee? Here’s What You Need to Know 

Employing staff is an exciting milestone for any business. Whether you’re a sole trader hiring your first employee or a company expanding its team, becoming an employer brings a range of tax, superannuation and workplace obligations that need to be addressed from the outset. 

Before your first employee starts, it is important to ensure the correct registrations, systems and insurance arrangements are in place. This includes setting up payroll, registering for PAYG withholding, implementing Single Touch Payroll (STP), arranging workers compensation insurance and preparing for superannuation obligations. 

Key employee responsibilities 

As an employer, you will generally need to: 

• • Register for PAYG withholding with the Australian Taxation Office (ATO) 
    

• • Set up compliant payroll software and report through Single Touch Payroll
    
    
  • Obtain completed employee on boarding documentation, including TFN declarations and super fund details 

• • Pay superannuation contributions in accordance with current requirements
    
    
  • Arrange workers compensation insurance before employees commence work
    
    
  • Provide compliant employment contracts and ensure award obligations are met
    
    
  • Issue payslips and maintain employment records
    
    
  • Consider Fringe Benefits Tax (FBT) where employee benefits are provided
    
    
  • Monitor payroll tax obligations as your workforce grows 

Superannuation changes

From 1 July 2026, the introduction of Payday Super means employers must ensure super contributions are paid to employees’ funds each payday, to ensure the funds are in the the employees superannuation fund within 7 days. Businesses should review their payroll systems to ensure they are ready for these changes. 

Don’t forget employment law obligations

Meeting tax and payroll requirements is only part of the picture. Employers must also comply with Fair Work requirements, including minimum wages, leave entitlements, award conditions, record-keeping requirements and employee information statements. 

Planning ahead can save time and cost

Getting your payroll and employment arrangements right from the beginning can help avoid costly mistakes, penalties and administrative headaches later. Taking the time to establish appropriate systems before your first hire will make managing employees much easier as your business grows. 

Thinking about employing staff for the first time? WLF is here to help you set up the right payroll, superannuation and compliance processes from day one.