Industry 5.0, also referred to as the Fifth Industrial Revolution, is much more than technological evolution. It is an emerging concept that builds upon the advancements of Industry 4.0 and recognizes the crucial importance of human interaction in the industrial landscape. Human-machine collaboration is the cornerstone of Industry 5.0, emphasizing a synergistic relationship between human creativity and machine efficiency. This collaboration is essential for achieving personalized production, fostering innovation, and addressing sustainability and ethical concerns. The design of human-machine collaboration in Industry 5.0 requires a theoretical foundation to ensure systems are not only functional but also aligned with human-centric principles. Several theories and frameworks from research can guide the design of human-machine collaboration systems. This paper discusses the various theories that can be used to design human machine collaboration will be discussed with its underpinning theory, uses, advantages and limitations. The paper concludes with discussion about challenges that industry 5.0 face such as ethical AI use, workforce training, Inclusion and Accessibility, sustainability, and cybersecurity that must be addressed to make sure that we enrich human roles rather than diminished by technology.