Crossing One Hundred Staff Does Not Make You A Reporting Company. Two Of Three Does.

The large proprietary company threshold counts the employees of your company and the entities it controls. Someone employed through an employer of record is employed by that provider, so they may not be yours to count. Someone in a subsidiary you own is. Whether your offshore staff count turns on who employs them, not where they sit.

Most founders have it backwards both ways: the Manila team invisible, one hundred heads treated as the line that changes everything.

Treasury consulted on the thresholds themselves from 19 October to 2 November 2026. The consultation on raising the reporting threshold for large proprietary companies closed with no outcome published, so this year is counted against the current numbers. Outstaffer sells an employer of record service that changes who the employer is, so read on with that disclosed.

The threshold is three tests and you have to fail two

Section 45A(3) of the Corporations Act 2001 makes a proprietary company large for a year if it satisfies at least two of three paragraphs: consolidated revenue, consolidated gross assets, and employees at year end.

None of the three figures in the Act is the operative one. It reads $25 million, $12.5 million and 50 employees, then lets regulations prescribe other amounts, and regulation 1.0.02B of the Corporations Regulations 2001 prescribes $50 million, $25 million and 100. Read the Act alone and you have half the revenue figure and half the headcount.

Satisfy two and the company must prepare a financial report and a directors’ report under section 292(1)(c), have it audited under section 301(1) and lodge it with ASIC under section 319, within four months of year end. For a 30 June balance date, 31 October.

Who counts as your employee

The provision counts employees of the company and the entities it controls, and section 45A(4) sends control to the accounting standards, not the org chart.

Do staff engaged through an employer of record count?

They are employed by the provider, which is not an entity you control, so on the face of the provision they are not yours to count. That is a reading of the text, not advice about your structure. Where the count sits near the line, get advice before year end.

Do contractors count?

A contractor is not an employee, which is why classification matters here. If the relationship would fail the tests that decide employment, the label on the agreement is not what the count runs on. Fair Work has drawn a line through where a contract was signed and where the work happened.

Run the count properly and most of you are nowhere near

Take a business with 88 full-time staff in Australia, 16 in a Manila subsidiary it owns outright, 14 part-timers on two days a week and 9 engaged through a provider. The raw list is 127 names.

Section 45A(5) weights part-timers as an appropriate fraction of a full-time equivalent, so the 14 count as 5.6. The 9 are employed elsewhere. That leaves 88 plus 16 plus 5.6, or 109.6.

One test tripped. On revenue of $19 million and gross assets of $4 million the other two are not close, so the company stays small proprietary with nothing to lodge.

Related reading

• Your Payroll Tax Bill Does Not Move When The Desk Does
• Your Contract Says Contractor. The ATO Looks At Two Other Things.

The counter-argument and where it stops

The honest counter is that in a labour-heavy services business the revenue and headcount tests tend to arrive together, so separating them is academic. Often true. It stops being true where the offshore team is large against revenue, which describes plenty of you.

The second is sharper. A provider you actually control is a controlled entity under those standards, and the count moves with it. It is part of why the wage order an employer of record applies is a live question.

Count once a year, at year end, on a full-time-equivalent basis, and keep the three tests on separate lines. Not to engineer the number down. To know which one you are nearest.

To see your real headcount with the employment relationships named properly, sign up and run a role through it. Or keep counting names on a list and land on a number that means nothing.

So: do my offshore staff count toward the large proprietary company threshold, or have you never checked who actually employs them?