Thirty-six per cent of employed Australians now usually work from home at least part of the time, according to ABS Working Arrangements data from August 2025. Roy Morgan's broader measure puts it higher, with 46 per cent working remotely at least some of the time. Either way, remote work is no longer a pandemic compromise. It's a permanent feature of Australian business.
But most SME owners are still managing remote teams with the same tools and processes they used when everyone sat in the same office. And the gaps are showing up in three places: compliance risks they don't know about, communication breakdowns they can feel but can't fix, and performance management that relies on visibility instead of outcomes.
This guide covers all three, with a focus on the practical obligations and frameworks that matter for Australian business owners.
If an employee is injured while working from home during their normal working hours, you're liable under your workers compensation policy. This includes ergonomic injuries from poor desk setups, slips and falls in the home office area during work hours, and psychological injuries related to work performed at home.
The key concept is "arising out of or in the course of employment." An employee who trips over their dog while walking to the kitchen during a break probably isn't covered. An employee who develops a repetitive strain injury from six months of working on a kitchen table with no proper chair almost certainly is.
Your obligations as an employer include assessing the suitability of the home workspace (or at minimum, providing guidance and a self-assessment checklist), providing appropriate equipment (monitor, keyboard, chair, or reimbursing the employee for these), and documenting that you've taken reasonable steps to ensure the workspace is safe.
Most workers compensation policies cover home-based work by default, but check with your insurer. Some require you to notify them that employees are working remotely on a regular basis.
Under the model WHS Act (adopted in all states except Victoria, which has its own OHS Act with similar requirements), you have a duty to ensure the health and safety of workers "so far as is reasonably practicable," regardless of where the work is performed.
For office-based remote work, "reasonably practicable" generally means providing guidance on ergonomic setup, ensuring employees have appropriate equipment, having a process for employees to report hazards or injuries, and conducting periodic check-ins on the working environment.
You're not expected to inspect every employee's home. But you are expected to take reasonable steps, and doing nothing is not reasonable. A simple home workspace self-assessment form, signed by the employee and reviewed annually, covers most of your obligations.
If you provide equipment for home use (laptop, monitor, desk, chair), there are FBT considerations. Equipment provided primarily for work purposes is generally exempt from FBT under the "otherwise deductible" rule, provided the employee would be entitled to claim a deduction for it. However, if you provide items that have significant private use (such as a large-screen television for "video conferencing"), FBT may apply.
If you pay a home office allowance (a flat dollar amount per pay period to cover electricity, internet, and other costs), it's treated as assessable income for the employee. You must withhold PAYG from it. The employee can then claim deductions for actual home office expenses on their tax return.
If you reimburse actual expenses (based on receipts for a proportion of internet, electricity, etc.), the reimbursement is generally not subject to FBT if it's based on actual costs incurred for work purposes.
The simplest approach for most SMEs is to provide the essential equipment (laptop, monitor, keyboard, mouse) and let employees claim their own running costs via the ATO's fixed rate method (67 cents per hour) on their personal tax return.
From August 2024 (for businesses with 15 or more employees) and August 2025 (for small businesses with fewer than 15 employees), employees have the right to refuse to monitor, read, or respond to contact from their employer outside of working hours, unless that refusal is unreasonable.
For remote teams, this has direct implications. After-hours Slack messages, emails sent at 10pm, and weekend calls are all captured. The test of "unreasonableness" considers factors like the reason for the contact, the level of disruption to the employee, whether the employee is compensated for being available, and the nature of the employee's role.
This doesn't mean you can never contact remote employees outside hours. It means you need to be deliberate about when and why you do. Consider using scheduled-send features on emails, setting clear expectations about response times, and distinguishing between urgent and non-urgent communications. From 2026, the Fair Work Commission has enforcement powers to deal with disputes, including the ability to issue stop orders and impose penalties.
Learn more about managing leave and entitlements for distributed teams.
If your business is based in Sydney but you have a remote employee working from their home in Brisbane, you've just created multi-state employment obligations. Most business owners don't realise this until something goes wrong.
Payroll tax is levied in the state where the employee performs the work, not where the business is registered. If your total national wages exceed the threshold in any state where you have employees, you may have a payroll tax obligation in that state.
A Sydney business with $1.1M in total wages and one remote employee in Victoria needs to check whether it exceeds Victoria's $1,000,000 threshold (based on total national wages, not just VIC wages). The answer is yes, and a proportional payroll tax liability arises in Victoria for that one employee's wages.
You need a workers compensation policy in each state where employees are based. A NSW policy does not cover an employee working in Queensland. Some insurers offer multi-state policies, but you need to specifically request this.
Different states have different vesting periods and entitlements. An employee in Victoria vests at 7 years. The same role in NSW vests at 10 years. You need to track each employee's entitlement based on their state of employment.
See our full breakdown of state-by-state employment costs, including long service leave liabilities.
For a business with employees in three states, you're potentially managing three payroll tax registrations, three workers compensation policies, and three long service leave regimes. The administrative load is significant. Most SMEs discover this when they receive a payroll tax assessment from a state they didn't know they were registered in.
Book a free call to discuss your multi-state compliance position.
The compliance stuff is binary: you're either doing it right or you're not. Communication and culture in remote teams is more nuanced, but the principles that work are surprisingly simple.
In an office, information spreads through hallway conversations, overheard phone calls, and casual lunch chats. Remote teams get none of this. If it's not written down or said explicitly, it doesn't exist.
The practical application: every decision should be documented in a shared channel or document. Every meeting should have a brief written summary of what was decided and who's responsible for what. Every project should have its status visible in a shared tool. The goal isn't bureaucracy. It's ensuring that no one is operating on assumptions.
Not every conversation needs to be a video call. For most remote teams, the rhythm that works is: messaging (Slack, Teams) for quick questions and updates, shared documents for collaborative work and decisions that need input over time, and video calls reserved for complex discussions, sensitive conversations, and deliberate relationship-building.
A 30-minute video call for something that could have been a two-line Slack message is not collaboration. It's a productivity tax.
For small teams (under 10), a daily 15-minute standup works well: what I did yesterday, what I'm doing today, anything blocking me. Keep it tight. Cameras on. No presentations.
For larger teams, a weekly team meeting plus fortnightly individual one-on-ones with each direct report is the minimum. The one-on-ones are where you catch early signs of disengagement, workload issues, or personal challenges that affect performance.
Remote culture doesn't happen by accident. In an office, culture forms through proximity. In a remote team, you have to build it intentionally. This means occasional in-person meetups (quarterly at minimum for teams that are fully remote), virtual social activities that don't feel forced (a Friday afternoon casual chat works better than a mandatory fun exercise), and recognising contributions publicly (a message in the team channel costs nothing but matters a lot).
If you're tracking when remote employees log in and log off, you're managing attendance, not performance. Remote work only functions when you shift to outcome-based management.
This means every team member should have clear deliverables with deadlines. Weekly or fortnightly check-ins focus on whether deliverables were met, not how many hours were worked. The quality and timeliness of work is the measure, not visible presence.
This requires upfront investment in defining what "done" looks like for each role and each project. But once that's in place, managing a remote employee is no different to managing an on-site one. The work is either done to standard or it isn't.
In an office, you can see when someone's struggling: they're at their desk but staring at the screen, they're missing meetings, their body language changes. Remotely, the signals are different. Missed deadlines, declining quality, reduced responsiveness in messaging, cameras always off in meetings, and withdrawal from team conversations are all indicators.
The risk with remote teams is that underperformance goes undetected for longer because there's no visual cue. Regular one-on-ones with specific questions about workload, challenges, and wellbeing are your primary early warning system.
Fair Work obligations around performance management apply identically to remote employees. If you need to manage underperformance, you still need to follow a fair process: identify the issue, communicate it clearly, provide support and a reasonable timeframe for improvement, and document everything. The fact that the employee works remotely doesn't change your obligations or reduce the employee's protections.
Here's the rough monthly cost comparison per employee between office-based and remote:
Office-based employee in Sydney CBD: Desk space rental: $500 to $800 per month. Utilities and facilities: $100 to $200. Office equipment (amortised): $50 to $100. Software and tools: $30 to $80. Total: $680 to $1,180 per month.
Remote employee: Home office equipment (amortised over 3 years): $30 to $60 per month. Software and tools (may need additional collaboration tools): $40 to $100. Internet/communications contribution (if provided): $50 to $100. Total: $120 to $260 per month.
The saving is $500 to $900 per employee per month, or $6,000 to $10,800 per year. For a 10-person team, that's $60,000 to $108,000 annually. Even accounting for the occasional in-person meetup, training day, or co-working space booking, the cost advantage is substantial.
The trade-off is the investment in communication tools, culture-building, and management time. These are real costs, but they're typically much lower than the office overhead they replace.
Not every role suits remote work, and it's important to be honest about that.
Roles that require physical presence (site-based trades, retail, hospitality, manufacturing) obviously can't be remote. But some office-based roles also function better with at least some in-person time, particularly those involving collaborative design work, intensive onboarding for new staff, and roles where the employee needs close mentoring or supervision.
The hybrid model, where employees work from home 2 to 3 days and come in for 2 to 3 days, works for many businesses. If you go hybrid, be clear about which days are in-office and why, so it doesn't devolve into people choosing whichever days are most convenient for them.
And for the inevitable "can I work from Bali?" question: the short answer is it's complicated. Working overseas even temporarily creates potential issues around tax residency, visa requirements, data security, and time zone misalignment. For short trips (under 2 weeks), most businesses turn a blind eye. For longer arrangements, get professional advice before saying yes.
Am I liable if a remote employee is injured at home?
Yes, if the injury arises out of or in the course of their employment during normal working hours. Your workers compensation policy covers home-based injuries in the same way as office-based injuries.
Do I need a formal remote work policy?
There's no legal requirement, but it's strongly recommended. A remote work policy should cover expectations around availability, communication, workspace setup, equipment, data security, and expense reimbursement. It protects both you and the employee.
Can I require employees to come back to the office?
Generally yes, if it's a reasonable direction and the employment contract doesn't guarantee remote work. However, employees can request flexible working arrangements under the Fair Work Act if they meet certain criteria (caring responsibilities, disability, domestic violence, over 55, or have been with you for 12 months). You can only refuse on reasonable business grounds.
What are my WHS obligations for remote workers?
You must ensure the health and safety of remote workers so far as is reasonably practicable. This typically means providing guidance on ergonomic setup, appropriate equipment, a process for reporting hazards, and periodic reviews of the working environment.
How do I handle payroll tax for interstate remote workers?
Payroll tax is levied in the state where the employee performs the work. If your total national wages exceed the threshold in that state, you have a payroll tax obligation there. Monitor your national wages total against every state where you have employees.
Can I monitor what remote employees do on their computers?
Monitoring is legal in Australia but is subject to workplace surveillance laws that vary by state. In NSW, you must notify employees at least 14 days before commencing surveillance. In general, monitoring should be proportionate, transparent, and related to a legitimate business purpose. Covert monitoring is generally not permitted.
What equipment do I need to provide for remote workers?
There's no specific legal requirement, but your WHS obligations mean you should ensure employees have a suitable workspace. At minimum, provide a laptop and any software required for the role. Many employers also provide or subsidise a monitor, keyboard, mouse, and ergonomic chair.
How do I manage time zones with a distributed team?
Set core overlap hours (for example, 10am to 2pm AEST) when everyone is available for meetings and real-time collaboration. Outside core hours, use asynchronous communication. For teams spanning east and west coast (Sydney/Perth, a 2 to 3 hour difference), this is manageable. For international teams, the overlap window is narrower and needs more deliberate scheduling.
Is there a minimum number of days employees need to be in the office?
No legal minimum exists. This is a matter for your employment contracts and company policy. If you want to require a minimum number of office days, include it in the employment contract or a formal company policy and ensure it's applied consistently.
What's the "right to disconnect" and how does it affect remote teams?
From August 2024 (15+ employees) and August 2025 (all businesses), employees can refuse to monitor or respond to employer contact outside working hours unless that refusal is unreasonable. For remote teams, this means being deliberate about after-hours messaging and setting clear expectations about response times. The Fair Work Commission has enforcement powers from 2026, including stop orders and penalties.
ABS, Working Arrangements August 2025: abs.gov.au
Roy Morgan, Working from Home Data 2025: roymorgan.com
Safe Work Australia, Working from Home Guidance: safeworkaustralia.gov.au
Fair Work Ombudsman, Flexible Working Arrangements: fairwork.gov.au
Fair Work Ombudsman, Right to Disconnect: fairwork.gov.au
State Revenue Offices (NSW, VIC, QLD, WA, SA, TAS, NT, ACT) for payroll tax guidance
ATO, Fringe Benefits Tax: ato.gov.au
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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.
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