Business & commercial

Independent contractor agreements in Victoria.

Calling someone a contractor does not make them one. CMK Legal prepares independent contractor agreements for Victorian businesses that reflect a genuine contracting relationship, and advises on the sham contracting, superannuation and payroll tax exposure that follows when it is not.

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Solicitor-drafted

Agreements drafted after an honest assessment of the relationship, not around it.

Practical timeframes

Standard agreements drafted within 3 to 5 business days.

Fixed fee, quoted first

Fixed fee per agreement, with a reduced rate for a reusable template.

Australian commercial law

Fair Work Act, SGA superannuation rules and Victorian payroll tax.

What a contractor agreement has to get right.

Whether someone is an employee or a contractor is decided by law, not by the label on the invoice. The Fair Work Act now directs attention to the real substance and practical reality of the relationship as a whole, rather than the contract terms alone, with an opt-out pathway available to higher-earning contractors. Getting it wrong exposes the business to back-pay of award entitlements, leave, superannuation and penalties for sham contracting.

Superannuation is a separate trap. A contractor engaged wholly or principally for their labour is deemed an employee for superannuation guarantee purposes even if they are a genuine contractor at common law. Payroll tax has its own contractor provisions and exemptions, and workers compensation coverage may also be required. These three tests do not line up neatly, which is why the arrangement should be assessed before it starts.

A well-drafted agreement supports the position rather than creating it. It defines the deliverable rather than the hours, allows delegation, leaves the contractor to supply their own tools and insurance, sets a fee against milestones or invoices, and deals with intellectual property, confidentiality and termination for convenience.

Intellectual property created by a contractor belongs to the contractor by default, not to your business. Unlike employees, there is no automatic assignment, the agreement must transfer it expressly.

What we cover.

Characterisation review

We test the arrangement against control, delegation, tools, risk, integration and the practical reality of the work, and tell you plainly whether it is a contractor engagement or an employment relationship in disguise.

IP ownership and moral rights

Express assignment of all intellectual property in the deliverables, licences for any background IP the contractor brings, and moral rights consents so the work can be used and modified commercially.

Fees, super and tax

Fee structure tied to deliverables, invoicing and payment terms, GST treatment, an ABN warranty, and a clear position on superannuation where the labour test is likely to apply.

Insurance, indemnity and termination

Public liability and professional indemnity requirements, liability caps, indemnities, confidentiality, restraints where appropriate, and termination for convenience or breach.

Talk to us if.

  • You engage contractors who work mainly for your business
  • A contractor works set hours under your direction and uses your equipment
  • You are converting employees to contractors, or the reverse
  • You engage contractors through their own company or trust
  • Contractors are creating software, designs or content for you
  • You have received a superannuation guarantee or payroll tax query
  • A contractor has claimed employee entitlements or unfair dismissal
  • You are engaging overseas contractors or subcontracting client work

If the honest answer is that the person is an employee, it is far cheaper to fix that prospectively than to be assessed for years of superannuation, leave and penalties.

How we prepare contractor agreements.

  1. 01

    Assess the relationship

    A short questionnaire and discussion to determine whether the engagement is genuinely independent contracting.

  2. 02

    Flag the tax position

    Superannuation, payroll tax and workers compensation exposure identified and confirmed with your accountant.

  3. 03

    Drafting

    An agreement built around deliverables, with IP assignment, insurance, indemnity and termination terms.

  4. 04

    Rollout

    Guidance on issuing the agreement to existing contractors and adjusting the way work is actually allocated.

  5. 05

    Review

    Periodic re-assessment as engagements lengthen, since a relationship can change character over time.

Transparent contractor agreement fees.

Contractor agreements are a fixed fee quoted before we start, with a lower rate for a reusable template you can issue yourself. A standalone characterisation review, where you simply want to know whether the arrangement is safe, is a small fixed fee and is credited against the drafting if you proceed.

Request a fixed-fee quote

FAQs

Independent contractor FAQs.

Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.

How do I know if someone is really a contractor?
It depends on the substance of the whole relationship, control over how work is done, whether the person can delegate, who supplies tools, who bears commercial risk and profit, how integrated they are into your business, and whether they run a genuine independent enterprise. No single factor decides it, and the contract label carries little weight on its own.
What is sham contracting?
Representing an employment relationship as an independent contracting arrangement, or dismissing an employee to re-engage them as a contractor to do essentially the same work. It attracts civil penalties under the Fair Work Act in addition to the back-payment of entitlements.
Do I have to pay super for contractors?
Often, yes. A person engaged under a contract wholly or principally for their labour is treated as an employee for superannuation guarantee purposes, even if they are a genuine contractor at common law and invoice through an ABN. Whether engaging through a company changes that depends on the facts.
Who owns work a contractor creates?
The contractor, unless the agreement assigns it. This is the opposite of the employee position and it catches businesses out constantly with software, branding, photography and written content. The assignment should be express, cover future works and include moral rights consents.
Can a contractor claim unfair dismissal?
A genuine independent contractor cannot, but a person mischaracterised as a contractor can, and the Commission will look past the label. Certain contractors can also access unfair contract term and unfair deactivation pathways, so the characterisation question is worth getting right.
Should the contractor invoice through a company?
It can support the arrangement, but it is not decisive on its own, and personal services income rules may still apply to the contractor's own tax position. Focus on how the work is actually performed rather than on the invoicing structure.

Related services.

Employment contracts

Compliant, enforceable contracts for full-time, part-time and casual staff.

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Employment law

Advice for employers on hiring, managing, restructuring and exiting staff.

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Intellectual property

Copyright, confidential information, licensing and IP ownership across your business.

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