Published: November 2025
Proper employee onboarding reduces turnover by up to 50% and increases productivity during the first 90 days by an average of 62%, according to research by the Australian HR Institute. Yet more than half of Australian small and medium businesses lack a structured onboarding process, exposing themselves to compliance penalties while sacrificing employee performance.
This comprehensive guide covers every step of employee onboarding in Australia, from pre-start requirements through the first 90 days, including 2025 compliance updates, penalty amounts, and practical templates.
Check out our onboarding checklist here
Effective onboarding begins before the employee's first day. The pre-start phase ensures all legal requirements are met and the employee can hit the ground running.
The employment contract must be provided and signed before the start date. Under Australian employment law, the contract should specify:
For casual employees, the contract must include the Casual Employment Information Statement explaining rights under the Closing the Loopholes legislation, including the right to request conversion to permanent employment after 6 or 12 months of regular work.
All Australian employers must verify work rights using the Visa Entitlement Verification Online (VEVO) system before employment commences. This applies to all employees, not just those who appear to be from overseas.
The VEVO check provides evidence that you took reasonable steps to ensure the person has work rights, protecting you from civil penalties of up to $93,900 per worker if you employ someone without valid work rights.
Keep a record of the VEVO check result. If the visa has conditions (such as limited hours for student visas), document these conditions and implement systems to monitor compliance.
For roles requiring specific qualifications or registrations, verify these before the start date:
Reference checks should verify employment dates, position held, and performance. Conduct at least two reference checks for all roles, documenting the conversation and who you spoke with.
Organise the physical workspace and equipment before day one:
For remote workers, ensure equipment is shipped to arrive before the start date, with clear setup instructions and IT support contact details.
Send a welcome email 3-5 days before the start date covering:
This email reduces first-day anxiety and ensures the employee arrives prepared with the documentation needed for compliance tasks.
The first day involves critical compliance tasks that carry significant penalties if not completed correctly.
Every new employee must complete a Tax File Number Declaration form (NAT 3092) on or before their first day. This form tells you how much tax to withhold from their pay.
The employee provides their TFN, indicates whether they want to claim the tax-free threshold, and declares any Higher Education Loan Program (HELP) or Trade Support Loan (TSL) debts.
If an employee does not provide their TFN within 28 days, you must withhold tax at the highest marginal rate (47% in 2025-26) from their entire payment, not just from the amount above the tax-free threshold.
Failing to have employees complete this form results in penalties of $3,132 per form under ATO regulations updated in 2025. The form must be kept for five years as part of your business records.
Employees must complete a Superannuation Standard Choice Form within 28 days of starting employment. This form allows them to choose which super fund receives their employer contributions.
If the employee does not make a choice, you must pay superannuation to your nominated default fund, which must be a MySuper product. You cannot simply skip superannuation payments because the employee did not choose a fund.
The current superannuation guarantee rate is 11.5% for 2024-25, increasing to 12% from 1 July 2025. Payments must be made at least quarterly by the following deadlines:
Missing these deadlines means you cannot claim a tax deduction for the contribution and must pay the Superannuation Guarantee Charge, which includes interest and administration fees.
All new employees must receive the Fair Work Information Statement within the first days of employment. This is not optional. The October 2025 version of this statement includes updated information about:
Failing to provide this statement carries a penalty of $9,396 for companies under the Fair Work Act. Keep a signed acknowledgment that the employee received the statement.
Under the Closing the Loopholes legislation, casual employees must receive the Casual Employment Information Statement on their first day. This statement explains:
Additionally, you must provide written notice about conversion rights at 6 months and 12 months of employment. Failing to provide these notices can result in successful unfair dismissal claims from casual employees.
Collect essential personal information on day one:
This information is needed for payroll setup, emergency situations, and record-keeping requirements.
To pay the employee, you need their bank account details including:
Verify the account name matches the employee name to avoid payment errors. Some businesses require a voided cheque or bank statement for verification, though this is not legally required.
The first week focuses on integrating the employee into your systems and culture while completing remaining administrative requirements.
Enter the employee into your payroll system with all details from day one:
Test that the first pay run calculates correctly, including correct tax withholding, superannuation calculation, and leave accrual (for permanent employees).
Identify which modern award or enterprise agreement applies to the employee. Most employees are covered by one of the 122 modern awards in Australia's industrial relations system.
Common awards include:
Each award specifies minimum pay rates, penalty rates for overtime and weekend work, allowances, and leave entitlements. Applying the wrong award or misclassifying the employee's level can result in underpayment claims.
For example, a Marketing Coordinator in a professional services firm should typically be classified under the Professional Employees Award at Level 3 or 4, with a minimum salary around $65,000-$75,000 depending on experience. Classifying them at Level 1 or 2 would constitute underpayment.
If the contract includes a probation period, document the performance expectations and review schedule in writing. A typical 90-day probation should include:
During probation, the notice period is typically shorter (often one week rather than the standard four weeks), but this must be stated in the employment contract.
Fair Work protection from unfair dismissal does not apply during probation for businesses with fewer than 15 employees (the threshold is 6 months for larger businesses). However, dismissal cannot be for discriminatory reasons and must follow a fair process.
Provide the employee with your workplace policies and have them sign an acknowledgment they have received and read them. Essential policies include:
The right to disconnect policy explains when employees can refuse to monitor, read, or respond to contact outside their working hours unless the refusal is unreasonable.
Ensure the employee has everything needed to perform their role:
Create a checklist of all systems the role requires access to, and have IT or managers confirm each item is completed.
Verify and document industry-specific requirements:
Hospitality: Responsible Service of Alcohol (RSA) certificate must be current. Check expiry dates as most states require renewal every 3-5 years.
Construction: General Construction Induction (white card) must be current. Site-specific inductions are also required before accessing particular construction sites.
Healthcare: AHPRA registration for nurses, doctors, and allied health professionals must be current. Check the AHPRA register and note the registration expiry date.
Transport: Driver's license class must match vehicle requirements. For heavy vehicles, check that Medical Certificate is current.
Childcare: Working with Children Check must be valid. Note the expiry date and set a reminder for renewal.
Keep copies of all licenses and certifications in the employee's file and implement a system to track expiry dates.
The first three months are critical for employee success. Research shows that employees who receive structured onboarding are 58% more likely to remain with the organisation after three years.
The first month focuses on building foundational knowledge:
Week 1-2: Role Basics
Week 3-4: Building Capability
Set specific learning objectives for the first month. For example, a new customer service representative might have objectives like:
Month two focuses on increasing independence while still providing support:
Conduct a formal review at the 6-week mark. Discuss progress, address any concerns, provide specific feedback on performance, and adjust expectations if needed.
By month three, the employee should be working at or approaching full productivity:
The 90-day probation review should be a formal, documented meeting covering:
Performance Assessment: Review against the key responsibilities outlined in the position description. Use specific examples of work completed.
Cultural Fit: Assess how the employee interacts with colleagues, responds to feedback, and aligns with company values.
Development Areas: Identify skills to develop further and create a plan for ongoing learning.
Decision: Confirm continuing employment, extend probation (with specific improvement areas and timeline), or end employment.
Document the review outcome and have both manager and employee sign the review form. If ending employment during probation, provide written notice as specified in the employment contract and conduct an exit interview.
Insufficient Training: Assuming the employee will figure things out leads to errors, frustration, and early turnover.
No Structured Check-ins: Without regular feedback, small issues become major problems by the time the probation review occurs.
Unclear Expectations: Not defining what success looks like in the first 90 days leaves both manager and employee uncertain about performance.
Skipping the Probation Review: Some businesses forget to conduct the review and the probation period expires by default, losing the flexibility it provides.
Poor Documentation: Failing to document performance issues during probation makes it difficult to justify termination if needed.
Manual onboarding creates errors, wastes time, and risks compliance failures. Even small businesses should implement basic automation:
HRIS platforms designed for Australian businesses include:
These systems automate:
Your HRIS should integrate with your payroll system to eliminate double data entry. When an employee completes their details in the HRIS, the information flows automatically to payroll.
This integration prevents errors like:
Implement a system for storing employee documents securely:
Cloud-based systems like SharePoint, Google Workspace, or Dropbox Business provide secure storage with access controls ensuring only authorised people can view sensitive employee information.
See our onboarding checklist here
Structured onboarding delivers measurable financial returns:
- Reduced Early Turnover: Effective onboarding reduces first-year turnover by 25%. For a business hiring 10 people annually at an average salary of $70,000, preventing 2-3 early departures saves $50,000-$75,000 in recruitment and training costs.
- Faster Productivity Ramp: Employees with good onboarding reach full productivity 30% faster. For a $80,000 role, this saves approximately $8,000 in the difference between paid salary and productivity delivered.
- Lower Error Rates: Proper training reduces costly errors in customer service, production, and administration. For businesses where errors trigger rework, returns, or customer dissatisfaction, this can save thousands per employee.
- Compliance Protection: Documented onboarding proves you completed required tasks (TFN, super, Fair Work statement) if challenged by regulators or in a dispute. This protection is difficult to quantify but becomes valuable when avoiding a $9,000+ penalty.
- Improved Engagement: Employees who feel properly welcomed and trained show higher engagement scores, leading to better customer service and business outcomes.
For a business hiring 8-10 employees per year, implementing structured onboarding costs approximately $5,000-$8,000 in system setup and process development but returns $40,000-$60,000 annually in reduced turnover, faster productivity, and avoided errors.
What documents do I need to collect from a new employee on their first day?
On day one, collect the completed Tax File Number Declaration form, Superannuation Standard Choice Form, emergency contact details, and bank account information. You should also provide the Fair Work Information Statement and obtain signed acknowledgment. For casual employees, provide the Casual Employment Information Statement. Visa verification should be completed before the start date.
What is the penalty for not providing the Fair Work Information Statement?
The penalty for not providing the Fair Work Information Statement to a new employee is $9,396 for companies under the Fair Work Act as of 2025. Small businesses and sole traders face proportional penalties. The statement must be provided within the first few days of employment and you should keep a signed acknowledgment as proof.
How long is a typical probation period in Australia?
Typical probation periods in Australia are 90 days (3 months) for most roles, though contracts can specify up to 6 months. During probation, notice periods are usually shorter (often one week), and employees in businesses with fewer than 15 employees are not protected from unfair dismissal claims. However, dismissal cannot be for discriminatory reasons and must follow a fair process.
What happens if an employee does not provide their Tax File Number?
If an employee does not provide their TFN within 28 days of starting, you must withhold tax at 47% from their entire payment, not just the amount above the tax-free threshold. This significantly reduces their take-home pay. The employee can provide their TFN at any time, and you adjust withholding from that point forward. You cannot refuse to employ someone because they do not have a TFN.
When must superannuation payments be made for new employees?
Superannuation must be paid at least quarterly by these deadlines: 28 October (July-Sept quarter), 28 January (Oct-Dec quarter), 28 April (Jan-March quarter), and 28 July (April-June quarter). The first payment for a new employee must be made by the deadline for the quarter in which they started. Missing deadlines means you cannot claim a tax deduction and must pay the Superannuation Guarantee Charge with interest and penalties.
What is the Casual Employment Information Statement?
The Casual Employment Information Statement explains casual employment rights under the Closing the Loopholes legislation. It must be provided to all casual employees on their first day and explains the right to request conversion to permanent employment after 6 months (small businesses) or 12 months (larger businesses), how the conversion process works, and the differences between casual and permanent employment.
Do I need to verify work rights for all employees?
Yes, all Australian employers must verify work rights for every employee using the Visa Entitlement Verification Online (VEVO) system before employment commences, regardless of whether they appear to be Australian citizens. This verification protects you from civil penalties of up to $93,900 per worker if you unknowingly employ someone without valid work rights. Keep records of the VEVO check results.
What modern award applies to my employee?
This depends on the industry and the nature of the work. Australia has 122 modern awards covering different industries and occupations. Common awards include the Clerks Private Sector Award, Restaurant Industry Award, Building and Construction General On-site Award, and Professional Employees Award. The Fair Work Ombudsman provides a tool to help identify the applicable award based on industry and job type.
How much does employee onboarding cost?
Employee onboarding costs include direct expenses (employment contract drafting, background checks at $50-150, equipment and workspace setup) and indirect costs (HR and manager time for paperwork, training, and supervision). For a typical employee, direct costs range from $500-$2,000 and indirect costs from $2,000-$5,000, totalling $2,500-$7,000 depending on role complexity and seniority.
What is included in the right to disconnect policy?
The right to disconnect policy, required since August 2024, explains when employees can refuse to monitor, read, or respond to contact from their employer outside their working hours. The policy must explain that refusal is acceptable unless unreasonable, considering factors like the reason for contact, the nature of the employee's role, and the employee's personal circumstances. Unreasonable refusal might include emergency situations or senior roles with genuine after-hours responsibilities.
Scale Suite delivers embedded finance and human resource services for ambitious Australian businesses.Our Sydney-based team integrates with your daily operations through a shared platform, working like part of your internal staff but with senior-level expertise. From complete bookkeeping to strategic CFO insights, we deliver better outcomes than a single hire - without the recruitment risk, training time, or full-time salary commitment.
Considering hiring finance staff?
We’ll show you the full cost of an internal hire vs our embedded team – and exactly how much you’d save.
We’ll reply within 24 hours to book your free 30-minute call. No lock-in contracts and 30-day money-back guarantee
