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How many employees can a sole trader have?

In Australia, sole traders can have employees. There is no specific limit on the number of employees that a sole trader can have, as long as they comply with Australian employment laws and regulations.

Sole traders are hire employees and then, are subject to employer obligations including the following:

  • Providing a safe working environment
  • Paying the correct amount of wages, superannuation contributions and entitlements
  • Complying with workplace health and safety laws
  • Registering for and pay Pay-As-You-Go (PAYG) withholding tax on behalf of their employees if required.

It may be best for sole traders to seek advice from a professional, such as a tax accountant or lawyer, to ensure they comply with all relevant laws and regulations when employing staff.

In Australia, if you are a Sole Trader who employs staff, you are required to record and report Pay-As-You-Go (PAYG) withholding tax to the Australian Taxation Office (ATO).  PAYG withholding tax includes income tax withheld from employees’ wages and other payments, as well as any additional Medicare Levy and HELP debt repayments. PAYG withholding information must be regularly reported to the ATO depending on the amount of withholding tax you are required to remit.

Single Touch Payroll (STP) reporting is a way in which you fulfil your PAYG reporting.  Using an ATO approved STP software is mandatory for employers to report employee wages, PAYG withholding tax and superannuation contributions to the ATO.

You can try Payroller for the easiest ATO approved single touch payroll provider for sole traders.  

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