Service Agreement in Australia: Template, Clauses and Local Law (2026)

What is an Australian service agreement, and what does the law require? An Australian service agreement is a contract where one party provides services to another for payment, typically as an independent contractor rather than an employee. It sets the scope, the fees, who owns the work, and how risk is shared. The big issue in Australia is classification: whether the person doing the work is truly a contractor or is really an employee in disguise. Getting this wrong is costly, because employees are entitled to the National Employment Standards, superannuation and award pay, and because sham contracting carries penalties. Since changes to the Fair Work Act took effect in August 2024, the test looks at the whole of the relationship, its real substance and practical reality, not just the words of the contract. A written service agreement still matters, but it no longer settles the question on its own. This article is general guidance, not legal advice. Classification and tax rules change, so confirm the current position with the Fair Work Ombudsman and the ATO before you rely on it. Last verified October 2026. ## Australian service agreement template Copy the block below and fill the bracketed fields. ```

SERVICES AGREEMENT This Services Agreement is made on [DATE] BETWEEN: [CLIENT NAME] [ABN], of [address] ("Client") AND [PROVIDER NAME] [ABN], of [address] ("Provider") 1. SERVICES The Provider will perform the services in Schedule A (the "Scope"). Further work may be added by a signed work order referring to this Agreement. 2. TERM This Agreement begins on [DATE] and continues until [END / ongoing until ended under clause 8]. 3. FEES, PAYMENT AND GST The Client will pay [fees / rate] in Schedule A. Invoices are due within [N] days. Fees are [exclusive / inclusive] of GST; where the Provider is GST-registered, GST at 10% applies. [Late amounts carry interest at [rate].] 4. INDEPENDENT CONTRACTOR The Provider is an independent contractor, not an employee, partner or agent of the Client. The Provider is responsible for its own tax, GST, superannuation and insurance. (Note: the real nature of the relationship, not this label, decides status; see note below.) 5. INTELLECTUAL PROPERTY [Deliverables created for the Client belong to the Client on full payment, assigned by the Provider.] The Provider keeps its pre-existing materials and licenses them for use in the deliverables. 6. CONFIDENTIALITY Each party will keep the other's confidential information secret and use it only to perform this Agreement. 7. WARRANTIES AND CONSUMER LAW The Provider will perform with due care and skill. Nothing in this Agreement excludes rights under the Australian Consumer Law that cannot be excluded. 8. TERM AND TERMINATION Either party may end this Agreement on [N] days written notice, or immediately for material breach not remedied within [N] days. Fees earned before termination remain payable. 9. LIMITATION OF LIABILITY To the extent the law allows, neither party is liable for indirect or consequential loss, and each party's total liability is capped at [the fees paid in the prior [N] months], subject to the Australian Consumer Law. 10. INSURANCE The Provider will hold [public liability / professional indemnity] insurance of at least [$amount]. 11. GOVERNING LAW AND DISPUTES This Agreement is governed by the law of [State/Territory], with disputes resolved in [courts / arbitration]. Signed - Client: __________ Provider: __________ Name / title / date Name / title / date

- **Fees and GST (clause 3).** Say whether fees include or exclude GST. GST is 10 percent, and a provider charges it only if GST-registered, which is generally required once annual turnover reaches A$75,000. State the payment window; note that the unfair contract terms regime applies to standard-form small-business contracts. <!-- [VERIFY: confirm A$75,000 GST registration threshold and 10% rate with the ATO] --> Last verified October 2026.
- **Independent contractor (clause 4).** State the intended status, but understand it does not control the outcome. Since August 2024 the Fair Work Act uses a whole-of-relationship test that looks at the real substance of the arrangement. High-income contractors (above an indexed threshold, A$175,000 before 1 July 2025 and adjusted each year) can opt out of being assessed as employees. <!-- [VERIFY: confirm current high-income opt-out threshold in the Fair Work Regulations] --> Last verified October 2026.
- **Intellectual property (clause 5).** Decide who owns the deliverables and whether ownership passes only on full payment. Let the provider keep its pre-existing tools and grant a licence instead.
- **Limitation of liability (clause 9).** A cap and exclusion of indirect loss are standard, but the Australian Consumer Law implies guarantees that cannot be excluded for many services, so the clause must carve those out. ## Common mistakes to avoid - Relying on the "independent contractor" label alone; since 2024 the whole relationship decides status.
- Sham contracting, that is, treating an employee as a contractor, which carries significant penalties.
- Forgetting that superannuation can be owed to some contractors who are paid mainly for their labour.
- Excluding liability that the Australian Consumer Law does not allow you to exclude.
- Not stating whether fees include GST, which causes invoicing disputes. ## A note on jurisdiction and current law - **The whole-of-relationship test.** Since August 2024, the Fair Work Act decides who is an employee by looking at the real substance, practical reality and true nature of the relationship, reversing the 2022 High Court decisions that had made the written contract the main test.
- **Opt-out for high earners.** Contractors earning above a high-income threshold, indexed each 1 July (A$175,000 before 1 July 2025), can opt out of being assessed as employees, and can revoke that notice later. Confirm the current figure. Last verified October 2026.
- **Sham contracting.** Misrepresenting employment as a contracting arrangement is unlawful and carries penalties, and in 2026 the Fair Work Ombudsman and the ATO signalled a joint focus on it.
- **Superannuation.** Some contractors paid wholly or principally for their labour are entitled to superannuation under tax law, even if they are not employees for other purposes. Check the ATO guidance.
- **GST.** GST is 10 percent, charged by GST-registered providers, with registration generally required above A$75,000 annual turnover. Confirm with the ATO. Last verified October 2026. ## Where a contract workspace helps A template gets you a sound Australian service agreement. The ongoing work is issuing consistent work orders, checking each one for scope, classification risk, GST and liability before signing, and tracking renewals and obligations across many providers. Drafting each work order, reviewing its terms before you sign, and keeping renewal and obligation dates in view can all happen in one AI workspace tuned to how your company buys or sells services in Australia. [Adira](https://adiralaw.com) runs this as one connected workspace for service agreements and their work orders. This template alone is enough to put a fair Australian agreement in place; the workspace simply joins drafting, review and tracking into one job.