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Can A Sole Trader Hire Employees?

Can A Sole Trader Hire Employees?

Short answer, yes. But as an employer, you have additional obligations to comply with.

16th November 2018
Reading Time: 2 minutes

A sole trader is a person trading as an individual solely responsible for all aspects of the business. The degree of control they have over the business is high. It’s also a relatively inexpensive business structure to set up. However, just because they are a ‘sole’ trader does not necessarily mean that they have to go it alone. Sole traders are allowed to hire employees. This is provided they comply with the obligations of being an employer.

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This article will look at the requirements you have to meet to employ someone as a sole trader.

What obligations do you have as an employer?

There are various obligations you adopt when you become an employer in Australia. Similarly, there are certain minimum standards you will need to comply with in respect of your workers.

1. Entitlements of staff

As an employer, you will need to remain informed of the different entitlements of each type of worker. These include minimum wage, leave entitlements and notice periods for termination. For example, if you hire full-time staff you will need to have an annual leave system in place.

2. Superannuation

As an employer, you are responsible for contributing 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 the superannuation at least four times a year by the quarterly due dates. Late payments will incur a fee.

3. Citizenship requirements

There are citizenship requirements attached to employing staff in Australia. You are responsible for ensuring that your workers either are Australian citizens or permanent residents, or have a visa entitling them to work in Australia.

4. Insurance

You will need to take out personal and work insurance 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 help the injured party recover.

5. Workplace health and safety

You are required to comply with the Workplace Health and Safety regulations in the workplace. This involves making assessments of and mitigating risks that may adversely impact your employees or customers.


It is important to understand and remain compliant with your obligations as an employer. If you need further advice, you can get in touch with an employment lawyer. With great business success comes great responsibility.

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Ashlee Johnson

Ashlee is a legal intern working in the content team at Lawpath. She is interested in information technology law, and all things innovation. Ashlee is currently completing a Dual Degree of Law/Commerce at the University of New South Wales.