Contractor Agreement Template

First, make sure a contractor agreement is the right document

The most expensive mistake in this area isn't a bad clause — it's using a contractor agreement for someone who is really an employee. Australian law looks at the whole relationship: who controls how the work is done, whether the person can delegate, who supplies the tools, who carries the commercial risk, and whether they're genuinely running their own business. A signed agreement labelled "contractor" won't save you if the substance says otherwise, and sham contracting carries penalties under the Fair Work Act. If the person works set hours, under your direction, only for you, on your equipment — stop and reconsider before using this template.

What the agreement must contain, section by section

1. Parties and business details

Both legal entities, with the contractor's ABN recorded. Verify the ABN on the Australian Business Register — an invoice quoting a cancelled ABN creates withholding obligations you don't want to discover late.

2. Scope of work and deliverables

The core of the document. Describe the services, deliverables, milestones and acceptance criteria specifically enough that "done" is unambiguous. Vague scope is the root cause of most contractor disputes, and it also weakens the contractor characterisation — genuine contractors deliver defined outcomes, not open-ended labour.

3. Fees, invoicing and GST

The fee structure (fixed price, milestones or rates), invoicing cadence, and payment terms. State whether the contractor is registered for GST and that invoices must be valid tax invoices where GST applies — registration thresholds and requirements are the ATO's domain, so defer to their current guidance.

4. Superannuation and tax position

A clause noting the contractor is responsible for their own tax — but be careful with super. Some contractors engaged mainly for their labour are entitled to superannuation contributions even with an ABN, under rules the ATO explains. Acknowledge this rather than blanket-excluding it.

5. Insurance

Require the contractor to hold appropriate cover — typically public liability and, for advice-giving work, professional indemnity — and to provide certificates of currency on request. Check whether your state's workers compensation scheme deems certain contractors to be covered workers; several do.

6. Intellectual property and confidentiality

Without an express assignment, a contractor generally owns the IP they create — the opposite of the employee default. If you're paying for the work, the agreement should assign the IP to you on payment, alongside confidentiality obligations that survive the engagement.

7. Subcontracting, termination and disputes

Whether delegation is permitted (a genuine right to delegate supports contractor status), termination for convenience and for breach with notice periods, and a simple escalation path before anyone lawyers up.

How to use the template

• Run the employee-vs-contractor check first, using the ATO and Fair Work Ombudsman's current guidance, and keep a note of your reasoning.
• Sign before work starts. Retrofitting an agreement after deliverables are contested rarely goes well.
• Attach the scope as a schedule so repeat engagements only need a new schedule, not a new contract.
• Review annually — contractor and gig-work rules have been actively reformed, and clauses drift out of date.

Where this fits in your back office

Contractor paperwork touches finance (invoices, GST, contractor reporting where your industry requires it), people (the classification question) and operations (scope and delivery) all at once — a classic case of the coordination work falling between functions. That's the pattern we call the coordination tax, and it's why contractor admin benefits from one owner. This template is general information, not legal advice — engagement structures are regulated enough that unusual arrangements deserve professional review. More on running this well at our operations overview.