Surprisingly, the answer is yes. Though as an employer, you have additional obligations you must comply with.
A sole trader refers to a person trading as an individual who is solely responsible for all aspects of the business. Setting up as a sole trader is relatively inexpensive and gives owners a high level of control over the business. Though, just because an individual is a sole trader does not necessarily mean that they aren’t allowed to hire employees for extra assistance when it’s needed. Sole traders are 100% allowed to hire employees on the basis that just like other employers, they satisfy the key obligations of being an employer.
This article will discuss the key obligations you must meet to be able to employ staff as a sole trader.
Key obligations you need to comply with as an employer
When you become an employer within Australia, there are a variety of obligations and minimum standards you and your workplace need to meet in respect of your workers. These include:
Staff rights and entitlements
Employers need to remain informed of the unique entitlements of each different worker that they may hire. Some of these entitlements include: minimum wage, leave entitlements and notice periods of termination. As an example, if you hire full-time employees you will need to have an annual leave system in place and be mindful that they are also eligible for 10 days of carers leave.
There are important citizenship requirements related to employing staff in Australia. You are in charge of ensuring that your workers are either Australian citizens/ permanent residents, or otherwise have a visa that provides them with the rights to work in Australia.
As an employer, it’s your duty to contribute 9.5% of your workers ordinary time wage to their superannuation account. This is required under the Super Guarantee system. You will need to pay your staff the superannuation at least four times a year by the quarterly due dates and late payments will incur a fee.
Personal Income Tax
Employers must pay personal income tax for their employees. To do this, you need to subtract the required level of tax out of an employee’s pay before it is received, and remit this amount to the Australian Taxation Office (ATO).
Temporary residents must also pay tax on income earned in Australia.
Personal and work insurance will need to be taken out to protect both your customers and employees from the adverse effects of a workplace accident. If a workplace accident causes an injury or illness, the insurance will protect your interests and also assist the injured party to recover.
Workplace health and safety regulations
As an employer, you will also be required to comply with the Workplace Health and Safety Regulations in the workplace. Remaining compliant with these regulations involves making assessments of and reducing risks that may adversely impact employees or customers.
It is essential to understand and ensure you are compliant with your obligations as an employer. If you are in need of further advice on employment or business structures, don’t hesitate to contact us below.
5ivestar Business Services are tax agents located in Carina Heights on Brisbane’s Southside. We service all areas of Brisbane, Ipswich and the Sunshine Coast for tax, BAS and bookkeeping. We also practice as virtual CFOs, take on interim CFO engagements as well as financial management, reengineering and restructures including business turnarounds and transformations and expert financial modelling.
Let’s chat about your business today https://5ivestar.com.au/contact-us
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