Hiring your first employee or apprentice

The checklist, in order

1 · Employee or contractor — decide this honestly

This is the decision that costs the most to get wrong, and the trades get it wrong more than most because "he's got an ABN" feels like an answer. It is not one. The status is decided by the real nature of the working relationship, not by what you call it, not by an ABN, and not by an agreement that says "contractor" at the top.

Roughly, the questions are about control and independence: who decides how and when the work is done, who supplies the significant tools and vehicle, whether the person can delegate the work to someone else, whether they carry commercial risk and can make a profit or loss, and whether they work for you as an integrated part of your business or run their own.

Getting it wrong can mean back-paying wages, leave, super and penalties, sometimes years later. If the person turns up when you tell them, in your vehicle, using your tools, doing what you direct — that is an employee, whatever the paperwork says. Check the current guidance from the Fair Work Ombudsman and the ATO, and get advice if it is genuinely borderline.

2 · The award, and the rate

Most trade employees are covered by a modern award, which sets minimum pay, penalty rates, overtime, allowances and conditions. The common ones in the trades include the Building and Construction General On-site Award, the Plumbing and Fire Sprinklers Award, the Electrical, Electronic and Communications Contracting Award, and the Cleaning Services Award — but which one applies depends on the work, not on the job title you use.

Look it up rather than guessing. Fair Work publishes the awards and a pay calculator, and rates typically change from the first full pay period on or after 1 July each year. Trade awards also carry allowances that are easy to miss — tool, travel, first aid, height, and site allowances among them — and unpaid allowances are one of the most common findings in a wage audit.

3 · Workers compensation — before day one

Workers compensation is run by each state and territory through its own scheme, and cover generally has to be in place before your first worker starts, not after. Working without it where it is required is an offence in every jurisdiction, and it also means an injury on your site is your personal problem.

Two things people get wrong here. First, apprentices count — they are employees. Second, if you operate through a company and it pays you as a working director, the company may be required to hold cover for you once what it pays exceeds the threshold its state scheme sets. "It's just me" is often true for a sole trader and is not automatically true for a one-person company. Check your own state's scheme.

4 · The paperwork on day one

• Fair Work Information Statement — must be given to every new employee before, or as soon as practicable after, they start. Casuals also get the Casual Employment Information Statement.
• TFN declaration — so you withhold the right amount of tax. Usually completed through your payroll software or ATO online services.
• Super choice form — offer them a choice of fund. If they don't choose, you generally have to ask the ATO whether they have a stapled fund before you can use your default.
• Bank details and emergency contact.
• Tickets and licences sighted — white card, trade licence, high-risk work licences, driver's licence. Photograph them, note the expiry dates, and set reminders. An expired white card on a site is a stopped job.
• Induction — the actual safety one, written down. Your work health and safety duties as an employer start the moment they do.

5 · Payroll, from the first payday

• Reporting each pay to the ATO. Wages, tax and super are reported to the ATO on or before each payday, through payroll software able to lodge it. Register for PAYG withholding before that first run, and check the current requirement on the ATO's hiring and paying workers pages.
• PAYG withholding. Withhold tax from each pay and remit it — it appears on your activity statement. It is not your money at any point.
• Pay slips within one working day of pay day, even if the employee is on leave. Electronic or hard copy, with the required details on them.
• Records for seven years. Time and wages records, kept in a form that can be produced. This is a Fair Work obligation, and it is checked.

Source: the Fair Work Ombudsman's record-keeping and pay slips guidance, read August 2026.

6 · Super — and this is the part that changed

The super guarantee rate is 12%. What changed on 1 July 2026 is the timing: under payday super, contributions generally have to reach the employee's fund within 7 business days of payday — 20 business days for the first payment to a new employee. Quarterly super is over.

7 · If it's an apprentice

An apprentice is an employee plus a training arrangement, and the training half is a separate process:

• A registered training contract. The apprenticeship is formalised through your state or territory's apprenticeship authority, and in practice is usually set up with an Australian Apprenticeship Support Network provider, who handles the paperwork with you at no cost.
• A training plan with a registered training organisation — the TAFE or RTO delivering the off-the-job training, and an agreement on how the time is scheduled.
• Award rates that move. Apprentice rates in the relevant award vary by year of apprenticeship, and by whether the apprentice is an adult or has completed Year 12. They step up on anniversary, which is a diary entry you have to keep yourself.
• Time for training is generally paid time, and course fees and travel may be handled differently — check the award and the training contract.
• Incentives may be available to employers of apprentices in some trades, through Australian Apprenticeships. Eligibility changes, so check what is current rather than budgeting on what someone got two years ago.
• Supervision is a real obligation, not a formality — an apprentice's licensed work must be supervised as the licensing rules in your state require.

If you are weighing up whether you can afford one at all, the numbers are on what a first employee really costs.

The four that catch people out

1. Starting them before workers comp is active. One afternoon of exposure is enough for it to matter.
2. Paying a flat cash rate "including everything". An all-in rate has to actually beat the award including penalties, overtime and allowances, for every hour worked — and you still have to be able to show it does.
3. Treating super as quarterly. It has not been since 1 July 2026, and the penalty for the old habit is not deductible.
4. No records. Hours, rates, leave and pay slips. Without them, in a dispute, the employee's account of the hours is very hard to contradict.

Yamate does pay runs and payslips for a small crew, tracks the super due date against the payday rule, and keeps the licence and ticket expiry dates where you will see them. It gives you estimates and records to work from — it is not tax advice, it does not lodge anything for you, and you remain responsible for what you lodge and pay. Three people are included on the solo plans; a bigger crew moves to the Company plan at $79/mo for ten people, $15/mo per person after that. Sign up before 30 September 2026 and lock in the Founder plan at $19/mo — forever. It's $29/mo after that. Prices in AUD.

Related

General information for Australian employers, not legal, tax or workplace-relations advice. Award coverage, classifications, workers compensation and apprenticeship requirements depend on your work, your state or territory and your circumstances, and rates change — check the Fair Work Ombudsman, the ATO, your state's workers compensation scheme and your accountant before acting. This page describes the position as read in August 2026.