I remember exactly how unprepared I felt hiring my first staff member years ago — I knew the day-to-day of running a cafe, but nobody had walked me through the actual paperwork obligations, and I found most of it out the hard way, one form at a time. If you’re about to hire your first employee, here’s the checklist I wish someone had handed me.
Quick answer: Before your first employee’s first payment, you need their Tax File Number Declaration, a Fair Work Information Statement (plus a Casual Employment Information Statement if they’re casual), Single Touch Payroll (STP) reporting set up, and a Superannuation Standard Choice Form given within 28 days of their start date. Budget for the fully loaded cost of an employee running well above their base pay once super, insurance, and equipment are factored in.
Before They Start: The Paperwork You Actually Need
There are a few documents that have to happen before or right at the start, not “whenever you get around to it”:
- Tax File Number (TFN) Declaration. Your new employee fills this in so you can calculate the correct PAYG withholding. Under Single Touch Payroll (STP) Phase 2, you no longer lodge this separately with the ATO, but you still need to collect and keep it on file for five years.
- Fair Work Information Statement (FWIS). A legally required document you must give every new employee before or as soon as possible after they start.
- Casual Employment Information Statement (CEIS). Required in addition to the FWIS if you’re hiring someone as a casual.
- Fixed-Term Contract Information Statement. Only needed if you’re hiring on a fixed-term contract that meets the Fair Work Act’s criteria for one.
Setting Up Payroll and Tax
You need PAYG withholding registered and Single Touch Payroll (STP) reporting enabled before you make your first payment to them — STP reports your payroll information to the ATO each pay run, and it’s not optional for employers regardless of size. If you haven’t run payroll before, this is worth setting up properly from day one rather than retrofitting it after a few pay cycles.
Superannuation: Don’t Skip the Choice Form
Your employee has the right to choose their own super fund. You’re required to give them a Superannuation Standard Choice Form within 28 days of their start date — if they don’t nominate a fund, you pay their super into your default “stapled” fund arrangement instead. Note that from 1 July 2026, superannuation must generally be paid at the same time as wages under the new payday super rules, rather than on the old quarterly cycle — worth checking exactly how this changes your payroll timing if you haven’t already.
What an Employee Actually Costs You
The number on their payslip is only part of the real cost. Once you add superannuation (currently 12% of ordinary earnings), workers compensation insurance, any required equipment or uniforms, and the time cost of training, the fully loaded cost of an employee commonly runs well above their base salary — a figure worth having clearly in mind before you commit to an ongoing role rather than discovering it in your first BAS after they start.
Getting the Award Right
Before you advertise the role, work out which modern award actually covers the position and what classification level applies — this determines the legal minimum you can pay, including weekend and public holiday penalty rates. Getting this wrong is one of the most common (and most expensive) mistakes new employers make, since underpayment claims can generally go back years, not just from when you noticed the error.
Common Mistakes
- Treating the FWIS as optional paperwork. It’s a legal requirement, not a nice-to-have.
- Not setting up STP before the first pay run. Retrofitting payroll compliance after the fact is far more painful than setting it up correctly from day one.
- Missing the 28-day super choice form window. This has a specific deadline, not a vague “eventually.”
- Guessing at the award classification instead of checking it properly. This is where underpayment claims most often start.
- Budgeting only the base wage. Super, insurance, and setup costs add up faster than most first-time employers expect.
Final Thoughts
Hiring your first employee is a genuine milestone, but the compliance side rewards doing it properly once rather than fixing it retroactively. If payroll is new to you, our guide on common payroll mistakes cafe and restaurant owners make is worth reading alongside this, and once you’re managing casual staff day to day, here’s what to do about no-shows before they happen to you.
This article is general information, not legal, tax, or accounting advice. Employer obligations can change and vary by circumstance, always confirm current requirements with the ATO, Fair Work Ombudsman, or a registered accountant before hiring.