Remote work has opened up the talent pool in ways we couldn’t have imagined a decade ago. Your next brilliant hire could be in Perth while you’re running things from Sydney, or you might find the perfect operations lead based in Brisbane while your team’s spread across Melbourne and Adelaide.

But here’s the thing: hiring someone who lives and works in a different Australian state isn’t quite as simple as adding them to your existing payroll. There are a few compliance boxes you need to tick – and they’re non-negotiable.

The good news? Once you know what’s required, it’s straightforward to set up. Let’s walk through exactly what you need to do when you hire across state lines.

1. Payroll tax – it’s based on where they work

Payroll tax is state-based, not national. If your total Australian wages exceed a state’s threshold, you must register and pay tax in that state – even if your business isn’t physically located there. So if you’re based in Melbourne and your national payroll is $800,000, but $200,000 of that goes to employees working in NSW, you’ll need both a Victorian and NSW payroll tax registration.

Rates and thresholds vary across states, so make sure to check each state before your first payroll run to avoid penalties or back-payments later.

2. Workers compensation – one policy per state

Workers compensation insurance is mandatory, and like payroll tax, it’s state-based. A WorkSafe Victoria policy won’t cover an employee working in Queensland, even if you’re paying them from a Victorian bank account.

You need separate workers compensation cover in each state where you have employees, even if it’s just one remote hire. The schemes vary by state:

• WorkSafe Victoria (VIC)
• icare (NSW)
• WorkCover Queensland (QLD)
• ReturnToWorkSA (SA)
• WorkCover WA (WA)

Premiums vary based on your industry classification and claims history. For a typical startup in a low-risk industry (like software), you might pay anywhere from 1-3% of wages, but higher-risk industries can pay significantly more.

Get this sorted before your new hire’s first day. You’re legally required to have cover in place, and if something goes wrong without it, you’re personally liable for any injury costs.

3. Super and long service leave

Superannuation is the easy one – it’s national. The Super Guarantee (currently 12%) applies everywhere in Australia. No extra registrations needed.

Long service leave is more complicated. It’s governed by state legislation, so entitlements and accrual rates differ depending on where your employee works:

In NSW, it’s after 10 years under the Long Service Leave Act 1955; in Victoria, it’s after 7 years under the Long Service Leave Act 2018. Most modern payroll systems (like Xero) can handle this automatically once you set the correct state for each employee. Just make sure it’s configured properly from day one.

4. Work health and safety (WHS)

All Australian states except Victoria follow the model Work Health and Safety laws. Victoria has its own Occupational Health and Safety Act 2004.

This matters because if your head office is in Victoria but you employ someone working from home in Brisbane, you need to comply with Queensland’s WHS Act 2011 for that employee.

Your WHS obligations for remote workers include:

• Ensuring their home workspace is safe (this might mean a workstation assessment)
• Providing appropriate equipment (desk, chair, monitor, etc.)
• Consulting with them on health and safety matters
• Reporting any workplace injuries or incidents to the correct state regulator

It’s not as onerous as it sounds for a home office setup, but you do need to document that you’ve taken reasonable steps to ensure their safety.

5. Employment contracts and governing law

Your employment contract should specify which state’s laws govern the agreement. Generally, this is the state where the employee performs their work.

If your employee in NSW is covered by a contract that references Victorian legislation, you could run into issues with enforceability. Get your contracts reviewed by an employment lawyer who understands multi-state hiring – or use a template that’s flexible enough to adapt.

6. Fair Work – the national baseline

Here’s some good news: the Fair Work Act 2009 and National Employment Standards apply across all of Australia. Modern awards, minimum wage rates, pay slip requirements, termination notice periods – all of that stays consistent regardless of which state your employee works in.

So you don’t need to learn different award systems or minimum wages for each state. The baseline employment protections are national.

The takeaway

Hiring interstate opens up incredible opportunities to build a genuinely national team. The compliance requirements aren’t complicated once you know what they are:

✅ Register for payroll tax in states where you exceed thresholds
✅ Get workers compensation cover in every state where you have employees
✅ Configure long service leave correctly based on each employee’s state
✅ Ensure WHS compliance for remote workers
✅ Use contracts that reference the correct governing law

Need help setting up interstate payroll?

At Standard Ledger, we help startup founders navigate multi-state compliance without the headaches. From registering for payroll tax and workers comp to configuring your payroll system correctly, we’ll make sure you’re compliant from day one – so you can focus on building your team, not worrying about which state regulator you’ve forgotten.