A compliant independent contractor agreement for hiring in Australia

Answering all your questions about independent contractor agreements in Australia

You probably have questions. We’re here to answer them. Below, you’ll learn all the extra stuff you should probably know before putting together an independent contractor agreement for Australia.

Why do I need an independent contractor agreement in Australia?

Independent contractor agreements set the tone for your professional relationship with a contractor. In Australia, contractor agreements must specify the project or period of time the contractor is being hired for, and contractors are obligated to submit invoices to the company they work with. These specifications are necessary for legally establishing the terms of your partnership, outlining each party’s expectations, and ensuring you are on the same page before the work begins.

Written agreements are also crucial for protecting you and the contractor legally. It is important that the agreement clearly outlines the work to be completed, relevant deadlines, and compensation to protect both parties from disputes down the road. As the proprietor, a signed independent contractor agreement helps protect you from potential misclassification liability by recording that the terms of your relationship are consistent with the legal parameters for independent contractors.  

In short—you need a written agreement if you’re working with contractors. In Australia, and everywhere else you hire.

What do contractor agreements in Australia typically need to have?

Every contractor agreement in Australia (and, the rest of the world) can be broken up into two parts:

• Contract-specific variables: This includes things like scope of work, rate, and deadline. They’re the project-specific variables that you’ll include with each contract, and are totally dependent on what type of work you’re hiring a contractor to do.
• ‍Everything else: Besides things like scope and deadline, every independent contractor agreement in Australia should follow a similar structure. If you want to grab your own contract with a compliant structure for Australia, sign up to Thera

What makes contractors different from employees in Australia?

Hiring contractors saves money, time, and stress compared to hiring a new employee. It is important to understand their differences beyond the hiring stage, though,  to make the best decision for your company.

Here are a few important things that make contractors different from employees in Australia:

• Contractors can set their own schedules
• Contractors can work with their own software and tools
• Contractors can work for other clients
• Contractors can subcontract work to other contractors
• Contractors are solely responsible for their taxes and retirement contributions
• Contractors rarely receive benefits, like health insurance*

In general, working with contractors allows more flexibility than hiring new employees. The contractor is allowed to complete their work when, how, and where they want, allowing them the freedom to pursue additional contracts that suit their availability and interests. Meanwhile, you incur less risk by only being committed to a contractor for the duration of the contract. This allows you the freedom to work with the best possible candidates for your business, and Thera can help with a contract for each new partnership you pursue.

*With Thera, you can get your contractors access to sign up for premium global health insurance, from SafetyWing, at a 50% discount.

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