An Australian employment contract checklist for companies hiring from overseas

Every Australian employment contract sits on the National Employment Standards (NES) in the Fair Work Act 2009, a set of minimum entitlements for employees. A contract can give more than the NES; the checklist question is whether any clause describes less.

The NES items that most often appear in contract clauses are these:

• Maximum weekly hours of 38 for full-time staff, plus reasonable additional hours.
• Annual leave of 4 weeks per year, pro rata for part-timers.
• Paid personal/carer’s leave (10 days) and paid family and domestic violence leave (10 days) in each year.
• Unpaid parental leave of 12 months once 12 months’ service is reached, extendable by request for a second 12.
• A right to request flexible working after 12 months’ service.
• Notice of termination and redundancy pay on the statutory scales.

Hours clauses deserve care in a cross-border team. State the ordinary hours, the time zone they are measured in and how additional hours are agreed, so that the “reasonable additional hours” test has something concrete to be measured against.

Each new employee must receive the Fair Work Information Statement at the start of employment. Other statements exist for casual and fixed-term staff; confirm with the Fair Work Ombudsman which of them apply to the role you are filling.

Identify the modern award first, because it can set the minimum pay rate, the classification level, penalty rates, overtime and allowances for the role. Modern awards are industry and occupation instruments made by the Fair Work Commission, and they overlay the NES for the employees they cover.

The Annual Wage Review 2026 set the national minimum wage at AUD 26.44 per hour from 1 July 2026, equal to AUD 1,004.90 across a 38-hour week and AUD 52,254.80 annually, and lifted modern award minimum rates by 4.75%. For award-covered staff the relevant floor is the rate for their classification, which is usually above the national minimum.

The contract should state the award that applies, or record that the role has been assessed as award-free, and name the classification level. If a salary is meant to absorb award overtime, penalties or allowances, the clause needs to say so clearly, and the salary must still cover what the award would have paid. Whether the award provides annual leave loading is another item to check, since it changes the cost of each week of leave.

Award rates move every 1 July after the Annual Wage Review, so a salary that clears the classification rate at signing can fall below it a year later. Put a calendar reminder against each award-covered hire and recheck the rate when the new figures are published.

Some employers are covered by an enterprise agreement instead, which can replace the award if it passes the better off overall test (BOOT). When an employer of record employs the person, ask which instrument applies to the employer’s staff in that role; the award text, not a general salary survey, decides whether the offer clears the floor.

Write the salary as a base figure with superannuation paid on top, and say so in plain words. The ATO’s published SG rate, 12% of qualifying earnings, holds for 2026-27 and every year after, and the employer funds it into the employee’s fund, and Australian candidates read an offer as “base plus super” unless it states otherwise.

Take a Sydney role offered at AUD 110,000. The employer pays the AUD 110,000 salary through payroll and a further AUD 13,200 of super into the fund, or AUD 1,100 a month. An offer letter that says “AUD 110,000 including super” would leave the employee with a base of about AUD 98,214, a gap that surfaces the first time someone reads a payslip.

Payday Super, in force from 1 July 2026, gives the employer 7 business days from each payday to get the contribution into the fund. The contract does not need to repeat that rule, though it should state the pay frequency, the currency (AUD) and whether commissions or bonuses are payable, because commissions count as qualifying earnings for super. For very high earners, the super obligation ends for the financial year when qualifying earnings hit AUD 270,830, the 2026-27 maximum contribution base, and the offer should explain how that is handled.

• Base salary in AUD, with “plus superannuation” stated.
• Pay frequency and pay date.
• Bonus or commission terms, and whether they are discretionary.
• Any salary sacrifice arrangement agreed at the start.

Fixed-term employment has been capped since 6 December 2023: 2 years is the general limit once renewals are counted, and no more than 2 back-to-back contracts may cover work of the same or a similar kind. The rule has listed exceptions, so a role that appears to fit one should be checked against the Fair Work Commission’s guidance before the contract is drafted.

Disputes about fixed-term contracts go to the Fair Work Commission on its F10DA or F10DB form, as described on its fixed-term contract disputes page. An overseas employer that hires a first Australian person on a 12-month trial contract and then extends twice is the pattern the rule was written to stop.

For project work with a genuine end date, a single fixed-term contract with a clear end date and reason is simple to administer. For a role that is really open-ended, a permanent contract with the statutory notice periods is usually the cleaner choice, since notice already lets either side end it.

A fixed-term contract should record the start date, the end date or the event that ends it, and the reason the work is time-limited. It should also say what happens if both sides want to continue, because a quiet roll-over past the end date is how many employers drift into a second or third contract without noticing.

Casual terms suit work that genuinely has no firm advance commitment to continuing, ongoing hours, such as irregular cover. A casual receives a 25% loading on the base rate and no paid annual or personal/carer’s leave, though they keep a full paid family and domestic violence leave entitlement of 10 days each year and unpaid carer’s and compassionate leave.

The statutory definition of casual employment and the route for a casual to move into permanent work were both revised recently. Check the current Fair Work Ombudsman guidance before issuing casual terms, and record in the contract the real pattern of work you expect.

A casual contract should show the base rate and the loading as separate figures, so that anyone checking it against the award can see both. It should also explain how shifts are offered and accepted, since the absence of a firm commitment to future work is the feature that makes the engagement casual in the first place.

A role with a fixed weekly schedule that you expect to continue is hard to describe honestly as casual. Offering permanent part-time terms from the start avoids a later conversion and matches how the personal and carer’s leave rules are meant to work.

The contract should set a notice period no shorter than the NES scale, which grows with continuous service:

• Service of 1 year or less: 1 week.
• Over 1 year, to 3 years: 2 weeks.
• Over 3 years, to 5 years: 3 weeks.
• Over 5 years: 4 weeks.
• Aged over 45 and 2 or more years’ service: 1 extra week.

The employer may pay in lieu of notice. Set out in the same clause how much notice the employee gives on resignation, and check it against any award that covers the role.

Redundancy pay also follows an NES scale, rising from 4 weeks’ pay after 1 year’s service to a peak of 16 weeks between 9 and 10 years, and a small business employer (under 15 employees) does not have to pay it. Every step is in the FWO fact sheet on notice and redundancy.

Unfair dismissal protection turns on the high income threshold, set at AUD 190,100 from 1 July 2026. Someone paid less than that, or whose job falls under an award or enterprise agreement, may lodge a claim after completing the minimum employment period. The notice, redundancy and unfair dismissal guide explains the process in full; for the contract, the practical items are the notice clause and a written record of any probation arrangement.

Four clauses protect the business interest in an Australian hire: intellectual property assignment, confidentiality, working hours and location, and any restraint. Where an employer of record is the legal employer, each of them has to work through that employer as well as the employee.

• IP: an assignment from the employee to the employer, with the service agreement passing the rights on to you.
• Confidentiality: a definition of confidential information and a duty that continues after the job ends.
• Hours and location: ordinary hours, time zone and the state the employee works from, because the state decides payroll tax, the workers’ comp scheme and the holiday calendar.
• Restraints: drafted with advice, keeping in mind that a proposed ban on non-competes for earners below AUD 190,100 is at exposure-draft stage only and is not law.

The location item carries more weight than overseas employers expect. A relocation from Sydney to Brisbane swaps one state’s payroll tax, workers’ comp and long service leave rules, and its holiday list, for another’s, and Queensland also licenses labour hire providers. A clause requiring the employee to tell the employer before changing their state of work gives the employer of record time to adjust payroll.

The guide to IP ownership with Australian employees covers the assignment chain and the draft non-compete bill in detail.

Under Employer of Record Australia, the contract is signed by us acting as employer, and you check the role-specific terms (duties, salary, hours, IP) before the draft is sent to the candidate. See what the service includes for the division of tasks.