On this page
- Understand your employment options
- Decide on the right type of worker for your business
- Information for your workforce action plan
Main employment types
Each type of employee varies so it's important to think carefully about which type of worker will work best for you. Find additional advice on identifying the skills and experience needed for a new role by using workforce planning and HR templates.
The five main types are:
- Permanent or fixed-term employees
- casual employees
- apprentices or trainees (employees)
- employment agency staff (also called labour hire)
- contractors and sub-contractors (hired staff).
The key options are listed below to help you decide on your employment choice.
When you hire people as employees, they:
- receive payment as wages or salary
- have their tax taken out by their employer
- are based at your business, work at your home or are mobile
- can be full-time, part-time, apprentices, trainees or casual, and can be directed when, what and how to do a task.
A contractor or independent contractor usually:
- doesn't receive wages but invoices for their work
- runs their own businesses with an Australian Business Number (ABN)
- has their own insurance
- does a set task, such as designing a computer system and once the task is done, the engagement ends
- can work for more than one customer
- can subcontract their work to others
- provides their own equipment or works from their own base.
Hiring staff through an agency means that:
- the employment agency employs the worker, and you pay the agency for the use of the worker for agreed hours or a set period
- you can hire people at short notice with specific skills or for short or long-term projects
- workers are usually short term, so they may not develop a loyalty to your business and may take their knowledge with them
- the agency pays the worker's wages and other entitlements
- the agency will charge you a commission, agency or finder's fee, which will add extra expense.
Permanent (full-time or part-time) employees
A full-time employee can work a standard day, for example, Monday to Friday 9am-5pm. A part-time employee works regular set hours, but less than a full-time week e.g. Wednesday to Friday, 11am-1pm. Some awards require an employer to roster a part-time employee for a minimum of three consecutive hours on any shift.
When considering your options for full time staff, be sure to consider the Restart Program, offering incentives for employing people full time who are aged 50 or older.
Can be used for short irregular periods of work but can also work in long-term arrangements. Some awards also require casuals to be paid for a minimum of three or four hours work depending on the award. Casual employees:
- can be asked to work at short notice, with no guarantee of regular hours
- are not entitled to annual or personal/carer's leave
- can be terminated without notice, unless they are covered by an agreement or contract that specifies otherwise
- are good for irregular and short term work demands
- offer a flexible arrangement for the employer and employee.
Casual employees are paid an extra 20-25 per cent (or more depending on the agreement or award) above the base rate of pay to compensate them for not receiving the above entitlements.
If you are thinking of hiring casual workers, look at how to employ casual workers.
Apprentices and trainee employees
Australian Apprenticeships (also known as traineeships) are a training contract between an employer and an employee, in which the employer provides training and the apprentice learns the occupation or trade. At the end of the training the apprentice gains a nationally recognised qualification.
Apprentices may be employed on a full or part-time basis, can be of any age, and may already hold a qualification. Training can be totally on-the-job, or a combination of on and off-the-job programs.
An apprentice wage varies depending on qualification, type of training and industry; and is generally entitled to the same superannuation, workers' compensation or other requirements as that of an employee.
Businesses that employ apprentices may be eligible for financial assistance.
Group training organisations employ Australian apprentices and place them with employers while they're being trained. Group training is a great option for businesses that:
- can't offer an Australian apprentice a permanent position because they're unable to guarantee ongoing work
- might not have the range of work available to ensure an Australian apprentice gains all the necessary job skills for that industry
- do not have the time to undertake all employment and training functions.