Hiring an Australian Consultant: How Do We Handle Payroll and Tax from India?

Dear Seniors, We are planning to hire a person as a consultant for a year in Australia to oversee business development activities. The individual is an Australian citizen of Indian origin. We are an Indian company registered in Delhi, and we do not have any offices in Australia.

Questions Regarding Consultant Hiring in Australia

1. Can we process the payroll of that person from India?
2. What will be the tax liability of that person?
3. What formalities need to be completed for him?

Please guide me on all the above points to assist me.

Regards,
HR buff

HR buff: You can't issue a full-time employment letter for this resource. Instead, you need to issue a consulting contract, valid for a year and stating his role/objectives clearly. Since it's a consulting contract, you will not be liable to pay taxes, but he's responsible for taxation on his monthly fee in line with Australian tax norms. You also need to issue a 'letter of representation' stating his role and indemnifying you against any malpractices he may be responsible for and limiting his signature to only necessary documents like a voucher, etc., and not to agreements or contracts on behalf of your firm. Hope this helps.

Thank you for the guidance, sir. Since we are hiring the individual as a consultant (professional) for a year, and his fee is being paid from India, isn't he liable for professional tax in India? In that case, we would need to have his PAN card prepared in India. Please correct me if I am wrong and provide further insight on this matter.

Regards,
Hrbuff

The individual is not getting paid in India, and hence there is no requirement for obtaining a PAN card in India. The taxation aspect shall be borne by him in his homeland. For the purpose of his salary/consultant fee, the mode of remittance should also be defined, and the contract letter should be legally verified.