How to make your first international hire (5 key steps)

If you've ever considered tapping into global talent pools, you might be wondering how to hire an international employee. Hiring international employees is a big step, but also a smart one. More and more Australian businesses, big and small, are looking beyond their borders for talent.

A 2024 survey of 500 Aussie business leaders found that almost 9 out of 10 are thinking about hiring overseas this year. Some just can’t find the right skills here. Others believe it to be a smart way to save money or grow their business in new places.

But hiring foreign employees isn’t simple. There's a lot more to it than whacking up a job ad and picking someone. Every country has its own rules. From payroll to taxes and contracts, there’s a lot to get right. And getting it wrong can land you in legal trouble or end up with you copping  some serious fines.

This guide breaks it all down. Step by step, we take you through how to hire your first international employee, why it’s worth considering, and what challenges you need to watch out for.

Preparing for your first international hire

Before you go all in and start hiring international employees, you need a plan. Picking the right person is only part of the process. You also have to think about legal requirements, pay, and the ins and outs of managing someone in a different country. Here are a few things to think about before you hire employees overseas:

The role and requirements

The first thing to clearly understand is what exactly you're looking for. What skills does this person need? Do they have to speak English fluently, or is another language fine? Do they need to fit in with your company culture, or will they work independently of the rest of your team?

Then, sort out the logistics:

• Full-time or part-time?
• Fully remote, or do they need to show up at an office?
• Will time zones be an issue?

Hiring overseas opens a lot of doors, but you have to know exactly what’s going to work for your business.

Example: Let’s say you run a tech company in Perth and need a software developer. You can’t find the right skills locally. So, you decide to hire an employee overseas. A developer in Vietnam or India might offer the expertise you need at a more affordable rate than one in Perth. But you’ll also need to think about time zone differences and communication expectations before starting the hiring process.

The right market

Where you hire from matters. Different countries have different talent pools, pay expectations, and employment laws. Some markets offer highly skilled workers at competitive salaries. But they may also require you to jump through more tax and legal hoops. Think about:

• Talent availability: Does the country have workers with the skills you're looking for?
• Time zones: Will they be available during your working hours, or will you need to adjust?
• Labour costs: How much does it cost to hire foreign workers there compared to hiring locally?

Example: Imagine you run a telecommunications company and need customer support staff. Hiring employees in the Philippines could be a good idea. There are a lot of experienced people there, lower wages, and a time zone that's close to ours. That means that customers could get fast responses and you wouldn’t have to oblige to 3am meetings.

Local laws and compliance

Every country has different employment laws. And if you don’t follow them, you could land in hot water. Some require you to register your business before you can hire. Others are super strict on contracts, employee benefits, and termination.

Before you go ahead with hiring international workers, check:

• Taxes: Do you have to withhold anything from their salaries?
• Contracts: What does a legally binding contract need to include?
• Intellectual Property (IP): Will your company own the work, or does the employee keep the rights?

Example: Say you want to source employees from Germany. As an employer, German law mandates that you provide your German employees with things like health insurance and paid leave. Fail to do this, and you could face some serious fines. It's for this reason that many businesses use an Employer of Record (EOR). They take care of all the legal stuff so you don’t have to stress about it.

Steps to make your first global hire

So, you’ve figured out what you need and where to look. Now it’s time to actually start the hiring process. International recruitment isn’t quite the same as hiring locally. There are a few extra steps that you need to get right. Below, you can find a step-by-step guide to help you do it properly:

Step 1: Decide between employee vs. contractor

Before anything else, you need to decide: are you hiring an employee or a contractor? The difference matters a lot.

• Employee: Works directly for your business. You’re responsible for things like taxes, benefits, and following local employment laws.
• Contractor: Self-employed. They handle their own taxes and benefits. Less admin for you, but be careful, because misclassifying a contractor as an employee can get you in legal trouble.

Example: Let’s say you’re hiring a graphic designer overseas. If they work fixed hours, use your tools, and report to a manager, they’re probably an employee. Even if you call them a contractor. If they work on their own time, using their own equipment, and take on other clients, they’re probably a true contractor.

Step 2: Choose an employment model

Now, how will you officially hire them? You’ve got two main options:

• Direct hire: You set up a legal entity in the country, register for taxes, and follow all the local employment laws. This can be great if you plan to hire a lot of people in one place. But a huge hassle if it’s just one or two employees you're thinking of hiring.
• EOR: This is a service that legally hires the person for you. They manage payroll, taxes, and local compliance. You just pay them a fee and manage the employee’s work.

Example: If you’re hiring multiple international team members in the same country for the long-term, setting up your own legal entity might be worth it. If you’re hiring one marketing manager in Spain and another in Canada, an EOR is definitely the way to go.

Step 3: Conduct interviews and screenings

When hiring overseas workers, your usual interview process probably won't cut it. Because there's a lot more than skills that you need to discuss. You also need to talk about time zones, communication, and the candidate's remote work experience. Here are a few tips for conducting interviews when hiring foreign employees:

• Use video interviews: Video can help you gauge communication skills and cultural fit.
• Check their setup: Do they have stable internet and the right tools to get the job done remotely?
• Background checks: Some countries have strict privacy laws, so research what’s allowed.

Example: You’re hiring a virtual assistant in South Africa. In the interview, they tell you that power outages are common in their area. In this case, you might ask about backup power or a second internet connection to avoid problems down the line.

Step 4: Set up payroll and benefits

Paying an international workforce is more complicated than paying your local workers. Different countries have different rules on taxes, benefits, and minimum wages. And there are also currencies to think about. Here’s what to consider:

• Currency: Will you pay them in AUD, or do you need a service that converts for you?
• Taxes: Are deductions your responsibility, or does the worker take care of their own?
• Benefits: In some countries, you'll need to provide your employees with health insurance or contribute to their pension.

Example: Say you hire a software developer in Brazil. If they’re an employee, you’ll have to pay into Brazil’s social security system. If they’re a contractor, they'll need to do this themselves. It's important to get this right, because getting it wrong means breaking local employment laws.

Step 5: Onboard your new hire

Once they’re hired, be sure to not just throw them into the deep end. A great onboarding process can make a huge difference and really set them up for success. This is especially true for remote workers. Here's a little checklist to help you:

• Set expectations early: Be clear on work hours, communication, and deadlines.
• Make them feel part of the team: Introduce them to colleagues, even if it’s just over Zoom.
• Give them the right tools: Make sure they have access to emails, software, and anything else they need to do their job well.

Example: You hire a marketing specialist in the UK. Instead of just assigning them tasks, you set up a 30-minute introductory call that your whole team attends. You also send them a short video explaining your company culture. This helps them feel connected to your business and team from day one.

Why hire internationally?

You might wonder why you would go through all this effort. Below, you can find some of the reasons why so many businesses are jumping on board international recruitment:

Access to global talent

Sometimes, the right person for the job just isn’t in Australia. Maybe you need a software developer with a niche skillset or an industry expert who’s worked on the kind of projects you’re tackling. By hiring internationally, you’re no longer limited by location.

You can find the best people, wherever they are. This means you don't have to settle for whoever happens to be nearby.

Cost effectiveness

Sometimes, hiring foreign workers can be much cheaper than hiring local employees. Wages in Australia are high. And in some industries, the difference between local and international salaries is massive.

There's more to it than just pay, too. Some countries have lower costs for benefits, office space, and even recruitment fees. If you’re hiring for remote roles, you mightn’t need to worry about office expenses at all. That’s money you can put back into growing your business.

Global growth and expansion

If you’re planning to expand into new markets, hiring people in those countries makes sense. They know the local culture, language, and business landscape. This can translate to less barriers when launching in a new region.

Having local employees also helps build trust with customers. People often feel more comfortable buying from a company that understands their market, rather than one trying to do everything from overseas.

Around-the-clock productivity

If your business operates across a few time zones, hiring foreign workers can keep things moving 24/7. There's no need to make your local team work late nights or early mornings. You can simply hire people in different parts of the world to cover different shifts.

This can be a huge competitive advantage for industries like customer service, IT, and e-commerce. In these industries, quick response times can make or break the business!

More diverse teams

Different backgrounds bring different perspectives. A team comprising people from multiple countries will naturally have more diverse ideas and experiences. This can lead to excellent problem-solving and lots of creativity.

Hiring foreign workers can also make it easier to adapt your products and services to international customers. A team with varied cultural insights can spot opportunities and potential issues that a local-only team might miss.

Challenges of international hiring

Hiring international employees comes with a lot of perks. But it’s not always smooth sailing. There are a few challenges that can trip businesses up. This is especially true if they’re doing this for the first time. Below, you can find a few of the things to watch out for:

Red tape and local rules

Every country has its own way of doing things when it comes to hiring. Some places make it easy to bring on international employees. Others are very particular about contracts, payroll, and employee benefits. And it’s not always obvious what applies. Often, businesses can end up tangled in admin they didn’t anticipate.

Hidden costs

When considering the costs of hiring international workers, there's more to think about than wages. There are taxes, fees, and exchange rates that can eat into your budget if you’re not careful. Some countries have employer tax contributions. So, what may look like a cheap hire on paper can end up costing a lot more in practice.

Then there’s the issue of currency fluctuations. Paying a fixed salary in another currency might seem stable, but exchange rates can shift. This creates an element of unpredictability.

Working across time zones

Hiring foreign employees often means working with completely different schedules. If your team is spread too far apart, it can slow things down. Think delays in replies, missed meetings, or waiting many hours to get an answer to a simple question.

For some roles, this doesn't really matter. But for others, it can cause problems. If your business depends on collaboration in real-time, you need to think carefully about where your international employees are based.

Different work cultures

What’s normal in one workplace might be quite bizarre somewhere else. Some countries prefer formal communication. Others can be more relaxed. Some workers expect lots of independence. Others might only thrive on step-by-step guidance. You need to be aware of these cultural differences if you’re managing a global team. Otherwise, small misunderstandings can turn into frustration for both you and your employees.

Protecting business data and intellectual property

If you hire international employees who deal with sensitive business information, you need to know how data security and intellectual property are managed in their country. Not all countries have the same protections. So, you need to have a clear understanding and solid contract. If you don't, you could find yourself in a tricky situation where you don't legally own the work an overseas employee produces.

Examples of how employment laws vary around the world

Hiring international employees involves playing by the rules in a whole new country, or several! And those rules? They’re all over the place. What’s normal in one country might be completely illegal somewhere else. Below, you can find an overview to give you an example of just how much things can differ from one country to another:

• How often you have to pay employees: In Australia, paying employees monthly is common, and totally acceptable. In France, it's illegal to pay anyone less than once a month. In Mexico, employers must pay salaries every two weeks. In China, wages are paid monthly, but you also have to report payroll taxes every single month.
• How much you have to pay in taxes and contributions: In some countries, taxes are mostly the employee’s problem (like in the US). But in places like Germany, employers are on the hook for extra contributions to healthcare, pensions, and unemployment insurance. This can add up to 30% of the employee’s salary.
• What you owe when you terminate someone: In the US, most jobs are 'at-will,' meaning you can terminate someone's employment without giving a reason. Try that in Brazil, and you’ll be paying mandatory severance, including a penalty payment equal to 40% of everything the employee has earned in their pension account. In Spain, you need to prove you have a valid reason for termination, or you’re looking at a huge pay out for unfair dismissal.
• How many paid holidays and leave days you have to offer: In Australia, full-time employees get a minimum of 4 weeks’ paid annual leave. In Austria, employees get 25 days of paid leave, plus 13 public holidays. In Sweden, workers have at least 25 days of paid leave per year, and they have the legal right to take 4 weeks off in a row during summer. In the US, there's no national law requiring paid leave.
• Who actually owns the work an employee creates: In most countries, if an employee is on your payroll, their work belongs to your company. But in France and Canada, IP automatically belongs to the worker unless their contract specifically says otherwise. If you don’t put the right clauses in writing, you could end up paying for work you don’t even own.
• What counts as a contractor vs. an employee: Hiring contractors instead of employees can save money. But only if you follow the rules. In Canada, misclassifying a worker can mean paying back years of unpaid taxes and benefits. The UK’s IR35 law makes it risky to use long-term contractors who look and act like employees. And in Italy, contractors are automatically assumed to be employees if they work exclusively for one company. And that applies even if they signed a contractor agreement.

Hire your first international employee with Rippling

Hiring internationally can open doors to new talent, markets, and growth. But it can also create a massive amount of admin. You’ve got to deal with compliance, payroll, contracts, taxes, and employee benefits. And you have to do it all while making sure you’re not breaking any local laws. Most businesses end up using a patchwork of tools to manage it all. This slows everything down and creates room for mistakes.

Rippling can do all the heavy lifting for you. Instead of darting between different systems, you can hire, pay, and manage international employees. And, with Rippling, you can do it all in one place. From legal compliance to payroll processing to onboarding, Rippling makes hiring globally as easy as hiring locally.

Hire international employees without a legal entity

One of the biggest hoops to jump through when hiring internationally is the requirement for you to have a local business entity. Obtaining a local business entity typically means months of paperwork, tax registrations, and legal setup.

With Rippling’s EOR, you can skip that step entirely. Rippling acts as the legal employer, handling everything from contracts and tax compliance to benefits and payroll. Your employees work for you. But Rippling takes care of all the local admin behind the scenes.

That means you can start hiring in minutes instead of months. No legal nightmares, no compliance worries. Just a stress-free and straightforward way to bring international employees onto your team.

Global payroll without the hassle

Paying employees in different countries isn’t as simple as initiating a direct deposit. Some governments require payroll to be processed through local systems. Others have strict laws on how salaries must be paid, taxed, and reported. If you get it wrong, you could have to deal with fines or back payments.

With Rippling’s Global Payroll, you can run payroll in multiple countries from one system. Employees and contractors are paid in their local currency. And taxes and deductions get handled automatically. There’s no need to manage multiple payroll providers or worry about fluctuating exchange rates. Rippling does it all for you.

Comply with local employment laws

Every country has its own employment rules. Failing to follow them can lead to serious consequences. Think misclassification lawsuits, tax penalties, or even being banned from hiring in that region.

Rippling keeps you on the right side of the law. Each hire is set up 100% compliantly, with local tax regulations, worker classification rules, and required benefits all taken care of. Plus, pre-vetted employment contracts help you follow local labour laws. And this is without needing to hire expensive lawyers or risk getting something wrong!

Everything in one place

Managing international employees usually means working with multiple disconnected systems. For instance, one for contracts, one for payroll, one for IT setup, and one for compliance. It’s a mess.

With Rippling, everything runs through a single platform and is based on a single source of truth. You can onboard employees, set up payroll, manage benefits, and even provision work devices like laptops and phones. And you can do it all from the same dashboard. Employees get what they need from day one, without waiting on separate teams or slow manual processes.

International hiring FAQs

What legal documents do I need to hire internationally?

It depends on the country, but in most cases, you’ll need:

• An employment contract that follows local labour laws. Some countries require specific clauses on probation periods, termination, and mandatory benefits.
• Tax registration if you’re setting up payroll locally and need to withhold taxes.
• Work permits or visas if you’re relocating a foreign worker to Australia.

Some countries have very strict rules around what needs to be included in a contract. If you miss a required clause, like severance terms in Spain or statutory bonuses in India, you could be looking at legal disputes or unexpected costs.

With Rippling’s EOR, all of this is taken care of. Contracts are pre-vetted for compliance, tax registration is handled, and you don’t have to stress about whether you’ve missed a critical legal requirement. You hire the employee, and Rippling manages the paperwork.

How do I know which country to hire from?

That depends on a few things:

• Where the talent is: Some countries have stronger talent pools in certain industries. If you're hiring software developers, Eastern Europe and India can be hotspots. For customer support, the Philippines is a popular choice.
• Time zones: Do you need real-time collaboration, or can work be async? If your team needs overlap, hiring someone in a country with a similar time zone can make things easier.
• Cost: Some regions offer lower salaries. But don’t forget to factor in employer taxes, contributions, and benefits. What looks cheap at first glance might not be in reality.
• Compliance risk: Some countries have strict employee protections. This can make it very expensive and difficult to terminate someone once they’re on your payroll.

Rippling helps businesses compare payroll costs, tax requirements, and compliance laws across different countries. This means you can make the best hiring decision minus the guesswork.

What are the benefits of using an EOR for my first international hire?

An EOR lets you legally hire international employees without setting up a legal entity in their country. That means:

• No legal red tape: The EOR handles compliance, payroll, and taxes.
• Faster hiring: You can onboard in minutes instead of months.
• Less risk: Contracts and benefits comply with local laws, automatically.

Setting up a legal entity in another country can take months and cost thousands. If you’re only hiring one or two people, it’s usually not worth the effort. With Rippling’s EOR, you can hire in many countries, quickly, and without any of the admin headaches.

How do I bring someone from overseas to Australia?

If you want to relocate foreign workers to Australia, you’ll need to:

• Check visa requirements: Most skilled workers will need a Temporary Skill Shortage (TSS) visa (subclass 482), which requires employer sponsorship.
• Meet sponsorship obligations: If your business wants to sponsor a worker, you’ll need to be an approved sponsor under Australia’s migration laws.
• Register for tax and superannuation compliance: Employers must withhold tax and pay superannuation for any employee working in Australia.

Rippling doesn’t handle immigration services. But once your international employees arrive in Australia, Rippling helps you make sure payroll, tax, and benefits are compliant. This means you can focus on getting them settled, not on admin.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.