Independent contractor agreement template
An agreement for engaging an individual who runs their own business and works under their own ABN. It sets the scope, fees, invoicing, intellectual property and termination terms.
Updated September 2026. Drafted with Cowell Clarke Commercial Lawyers.
Independent contractor agreement
Individual contractor
Agreement particulars
- Use for
- Individuals running their own business under an ABN
- Parties
- Your business as principal and the individual contractor
- Not for
- Workers you direct and control like employees
- Key risk
- Sham contracting and misclassification
- Check first
- Whether the person is an employee in practice
- LegalDrafted with Cowell Clarke Commercial Lawyers
- CurrentUpdated as the law changes
- ClarityScope, fees and IP set out up front
- SigningE-signature and storage built in
In short
What is an independent contractor agreement?
An independent contractor agreement sets the terms when a business engages a person who runs their own business to deliver services. It records scope, fees, invoicing, insurance, intellectual property, confidentiality and termination. Whether the person is a contractor depends on the real working relationship, and the agreement is one part of that.
Employee or contractor?
Since 26 August 2024, the Fair Work Act looks at the real substance, practical reality and true nature of the working relationship. A court or the Fair Work Commission weighs the whole arrangement, including how the work is done day to day.
| Factor | Points to a contractor | Points to an employee |
|---|---|---|
| Control | Decides how, when and where the work is done | You direct how and when the work is done |
| Business | Runs their own business and can work for others | Works in your business as part of your team |
| Payment | Quotes and invoices for results | Paid for time worked |
| Tools and costs | Supplies their own equipment and bears the costs | You supply the tools and cover costs |
| Delegation | Can subcontract or send someone else | Must do the work personally |
| Risk | Carries the risk of loss and fixes defects at their own cost | You carry the commercial risk |
Scroll the table sideways to compare
Treating an employee as a contractor is sham contracting. It carries civil penalties and back payment of wages, leave and super.
Obligations that can still apply
Superannuation
If you pay a contractor wholly or principally for their labour, super guarantee can apply even though they aren’t an employee.
Payroll tax and workers compensation
State laws can treat some contractors as workers. Rules vary by state, so check before you engage.
ABN and tax
Confirm the contractor’s ABN. If they don’t quote one, you may have to withhold tax from payments.
Unfair contract terms
Contractors earning below the contractor high income threshold can ask the Fair Work Commission to review unfair terms in services contracts.
What's in the agreement
- Parties, including the principal’s ACN and ABN and the contractor’s ABN
- Scope of services and deliverables
- Term and commencement
- Fees, invoicing and payment terms
- GST
- Insurance
- Intellectual property ownership
- Confidentiality
- Independent status of the contractor
- Subcontracting
- Termination
- Dispute resolution
Who owns the work
Without a written assignment, a contractor usually keeps copyright in what they create, even when you paid for it. The agreement assigns intellectual property to your business so you own the deliverables.
Independent contractor agreement FAQs
Straight answers to the questions employers ask most. Need a specific answer for your situation?
Talk to an advisorWhat is the difference between an employee and an independent contractor?
An employee works in your business under your direction. An independent contractor runs their own business, controls how the work is done and invoices for results. The real working relationship decides which one applies.
Does a contractor agreement protect me from a sham contracting claim?
Not on its own. Status depends on how the work runs in practice. The agreement helps when it matches how the relationship operates.
Do I have to pay super for a contractor?
Sometimes. If you pay a contractor wholly or principally for their labour, the super guarantee can apply.
Does an independent contractor need an ABN?
In most cases, yes. If a contractor doesn't quote an ABN, you may have to withhold tax from payments to them.
Who owns the intellectual property a contractor creates?
The contractor, unless a written agreement assigns it to you. This agreement assigns intellectual property in the deliverables to your business.
Can I use this agreement for a contractor's company or trust?
This version is drafted for individual contractors. For a company, trust or partnership, talk to an advisor about the right agreement.
Other employment contracts
Compare all contracts- Full-time employment contractOngoing employees averaging 38 hours a week.
- Part-time employment contractOngoing employees on fewer than 38 hours a week.
- Casual employment contractIrregular work with no firm commitment to ongoing hours.
- Fixed term employment contractTime-limited roles with a genuine end date.
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See how the agreement is built and signed in HR Command, or talk to an advisor about your workforce, or your clients'.
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