How can a US startup hire software engineers from Australia?

A US startup can hire software engineers in Australia in four ways: set up an Australian entity and employ them directly, use an employer of record (EOR), engage them as independent contractors, or bring them in through an embedded engineering partner. For a startup hiring its first one to three Australian engineers, an EOR or an embedded partner is usually the fastest route that avoids setting up a local company. No US visa is needed for any of these if the engineer stays in Australia.

TL;DR

• A local entity gives you the most control and the most admin, so it suits a team you plan to keep growing in Australia.
• An EOR employs the engineer on your behalf. You still find, vet and manage them.
• Contractors are quick to engage, but Australian law looks at how the work happens in practice, not what the contract calls it.
• An embedded partner supplies an engineer it already employs and vetted, so you skip recruiting too.

The four ways to hire, compared

Contractor vs employer of record in Australia

This is where most US founders trip up, because an arrangement that feels normal in the US can be a problem in Australia.

Since 26 August 2024, the whole of relationship test has applied to most companies, and the Fair Work Ombudsman's guidance lists foreign corporations among the businesses it covers. The test looks at the practical reality of the relationship, not only the contract. Factors include how much control you have over the work, who carries the financial risk, who supplies the tools, whether the worker can delegate, how hours are set and whether the work is expected to continue indefinitely.

An engineer who works full-time in your Slack, attends your standups and has no other clients can look a lot like an employee, whatever the agreement says.

Use a contractor when the engineer has other clients, controls how and when the work gets done, and is delivering a defined piece of work.

Use an EOR or a partner when you want someone full-time and integrated into your team. They are employed properly, and someone else runs payroll and entitlements.

Rules change and every arrangement is different, so have an Australian employment lawyer check yours. The Fair Work Ombudsman itself suggests seeking legal advice if you need certainty.

What employing someone in Australia involves

Whichever route you take, these are the entitlements your engineer will expect, and your budget and contract should allow for them:

• Superannuation. Employers contribute 12% of ordinary time earnings to the employee's retirement fund, and since 1 July 2026 this has to be paid in step with each pay cycle.
• Leave. Full-time employees get at least four weeks of annual leave and 10 days of personal leave a year.
• Termination. Employment is not at-will. Notice periods apply, and unfair dismissal protections can apply as well.

Working out tax withholding and whether your activity creates a tax presence in Australia needs an accountant familiar with both countries.

Is it a good idea to hire Australian developers for a US startup?

For many early-stage US startups, yes, but it comes with trade-offs worth weighing honestly.

What works well:

• Communication. Engineers work in native English, and written communication tends to be strong.
• Familiar working culture. Australian engineers often already use the same stacks and tools as US startups, and direct communication is the norm.
• A real handoff. Work done during the Sydney day is ready for review when the US team starts. See how the hours line up.

What to plan around:

• Limited live overlap. You get one to three hours of standard-hours overlap with San Francisco, depending on the time of year. Real-time pairing all day is off the table unless someone shifts their hours.
• The Friday gap. When it is Friday afternoon in San Francisco, it is already Saturday in Sydney, so there are about four shared working days a week.
• A smaller market. Australia has far fewer senior engineers than the US, and the strongest ones are competitive to hire.

Choose Australia if your team writes things down and you want senior engineers working independently. If your engineers need to pair live for most of the day, look for closer time zones.

How Lyra fits in

Lyra is an engineering partner based in Sydney. We place forward deployed engineers inside US and Australian startups, and our engineers are full-time Lyra employees deployed to one client at a time. Fewer than 3% of applicants make it through vetting, and every engineer builds with AI coding tools.

Read what a forward deployed engineer does, browse our case studies or book a call.

‍