Contractor and Consultancy Agreements
Agreements for engaging independent contractors and consultants, covering scope, fees, intellectual property, confidentiality and termination.
- For businesses engaging contractors, and for contractors
- Scope, milestones, fees and payment terms
- Intellectual property assigned to the right party
- Prepared with the employee or contractor question in mind
Engaging contractors
The Label Does Not Decide the Relationship
Calling someone a contractor in the agreement does not make them one. What matters is how the work is actually carried out.
Whether a worker is an employee or an independent contractor depends on the real substance of the working relationship, including who controls how the work is done, whether the worker can delegate or subcontract, who provides the tools and equipment, and whether the worker is genuinely carrying on their own business.
A well-drafted agreement records a genuine contracting arrangement accurately. It cannot convert an employment relationship into something else, so the structure of the engagement is worth settling before the agreement is prepared.
What it covers
What the Agreement Covers
Each agreement is prepared around the services being provided and the way the parties will work together.
Services and Deliverables
A clear description of the services, milestones and how completed work is accepted.
Fees and Payment
Fixed, hourly or milestone-based fees, invoicing, expenses and payment terms.
Intellectual Property
Who owns the work created. Unlike an employee, a contractor usually owns what they create unless it is assigned.
Confidentiality
Protection for the business’s confidential information during and after the engagement.
Liability and Insurance
Limits on liability, indemnities and the insurance the contractor is required to hold.
Termination and Handover
Notice periods, termination for breach, and the return of materials at the end of the engagement.
Fixed fees for this work are published on our pricing page.
Get a Fixed-Fee QuoteHow it works
From Instructions to Signed Agreement
Describe the engagement
The services, fees, duration and how the work will be carried out day to day.
We confirm the fee
You receive a fixed fee in writing before any work starts.
We prepare the agreement
The draft is sent with notes on any aspect of the arrangement that points towards employment.
Signing
Once the terms are settled, both parties sign and the engagement begins.
Before you start
What to Have Ready
The agreement should describe the engagement as it will actually operate. These details let us prepare it accurately and flag any risk of the arrangement being treated as employment.
The services: What the contractor will do, the deliverables and milestones, and how completed work will be accepted.
How the work is done: Whether the contractor sets their own hours and methods, uses their own equipment, can engage helpers or subcontractors, and works for other clients.
Fees and invoicing: How the contractor is paid, whether expenses are reimbursed, invoicing arrangements and payment terms.
Risk and ownership: Who will own the work created, what confidential information the contractor will see, and the insurance the contractor should hold.
Common Mistakes
Controlling the work like an employee: Setting fixed hours, supplying all equipment and directing how every task is done all point towards employment, whatever the agreement says.
Forgetting the IP assignment: Paying for work does not by itself transfer ownership of it. Without an assignment, the contractor usually keeps it.
Rolling engagements with no end: A contractor engaged continuously for years on the same terms as staff is more likely to be treated as an employee.
Ignoring superannuation and payroll tax: Some contractors attract superannuation and payroll tax obligations, so your accountant should review the arrangement.
Points Worth Knowing
Superannuation may still apply
A contractor paid mainly for their labour can be treated as an employee for superannuation guarantee purposes.
Payroll tax
Payments to some contractors are treated as wages for payroll tax, depending on the arrangement and the state.
Sham contracting
Misrepresenting employment as a contracting arrangement can expose a business to penalties.
Assign the IP
Without an assignment, a business may only have a licence to use work it has paid a contractor to create.
Personal services income
The tax rules for personal services income may affect how a contractor is paid. Your accountant should advise.
Keep the agreement current
If the role changes over time, the agreement should be reviewed so that it still reflects the arrangement.
We prepare and review contractor agreements. We do not act in disputes about unpaid entitlements or sham contracting.
Talk to Us About Your MatterWhere the worker will in substance be an employee, an employment contract is the correct document.
Contractor Agreement FAQs
What is the difference between a contractor and an employee?
Who owns the intellectual property a contractor creates?
Do I have to pay superannuation for a contractor?
What does a contractor agreement cost?
Can you act for the contractor rather than the business?
Can a contractor work for other businesses at the same time?
What is the difference between a contractor agreement and a consultancy agreement?
Have a question that is not answered here?
Contact UsEngaging a Contractor?
Tell us about the engagement and we will confirm a fixed fee before any work starts.
Get a Fixed-Fee Quote