TL;DR: An employment contract sets out the terms of a job. In Australia, though, it can never give less than the National Employment Standards or any award or enterprise agreement that applies. For senior employees, the high income threshold of $190,100 from 1 July 2026 decides whether an award applies, and restraint clauses must be reasonable.

Key takeaways

• An employment contract can be written or verbal, but it cannot remove or reduce minimum entitlements.
• The high income threshold is $190,100 from 1 July 2026, and it affects award coverage and unfair dismissal.
• A fixed term contract made on or after 6 December 2023 generally cannot run longer than 2 years.
• According to the e61 Institute, 1 in 5 Australian workers have a non-compete clause.
• An older template needs checking against the pay secrecy, fixed term, and casual employment changes.

What is in this employment contracts bundle?

The bundle holds eight sample contracts in three sets. The first set suits large employers or senior employees. It has a full-time or part-time contract, a fixed term contract, and a casual contract. The second set covers the same three types for small and medium businesses. The third set has two 1-page contracts, one for casual staff and one for everyone else.

What is an employment contract, and what can it not do?

An employment contract is an agreement between an employer and an employee that sets out the terms of the job. It can be written, verbal, or a mix of both. However, it cannot remove or provide for less than the minimum entitlements in the National Employment Standards. The same applies to any award or enterprise agreement that covers the employee.

The National Employment Standards (NES) set the floor for every employee in the national system. They cover maximum weekly hours, flexible working requests, leave, public holidays, and notice of termination. According to the Fair Work Ombudsman, awards, agreements, and contracts can’t exclude the NES. They also can’t provide for conditions that are less than it.

So a contract works on top of the minimums rather than instead of them. Suppose a contract offers only 5 days of sick leave a year. The employee still gets 10 days of paid personal and carer’s leave under the NES, because the lower term in the contract simply has no effect.

In practice, the contract earns its place by recording what the law leaves open. That includes the role, the place of work, the salary, the probation period, confidentiality, and intellectual property. It should also name the award or agreement that applies, so nobody has to guess later.

Do senior managers need an award check?

Yes, because seniority alone does not make a role award free. The Fair Work Ombudsman calls it a myth that all managers and professionals are award free. Some awards cover managers, for example. So check the industry and classification clauses of each relevant award before you treat a role as award free.

What should an employment contract for a senior employee include?

A contract for a senior employee should set out the position, reporting line, hours, base salary, superannuation, and place of work. It should also cover performance review, leave, workplace policies, confidential information, intellectual property, termination, and any post-employment restrictions. Each term must still meet the NES and any award or agreement that applies.

The contracts for large employers and senior employees in the bundle follow that pattern. Their headings start with the start date, probation, and position, and they then run through leave, monitoring of information technology, personal information, and intellectual property. Finally, they cover post-employment restrictions, the applicable law, and the Fair Work Information Statement.

Every new employee must receive the Fair Work Information Statement before, or as soon as possible after, they start. Casual employees also receive the Casual Employment Information Statement. Similarly, new fixed term employees receive the Fixed Term Contract Information Statement. The employee onboarding checklist template lists the rest of the starting paperwork.

On probation, the Fair Work Ombudsman says the length often ranges from 3 to 6 months. Employees on probation keep the same entitlements as everyone else, including the NES. So the contract should never suggest that probation reduces leave or notice rights.

How does the high income threshold affect senior employees?

The high income threshold is $190,100 from 1 July 2026, and it changes each year. An award stops applying to an employee who accepts a written guarantee of annual earnings above it. The threshold also limits unfair dismissal protection for award-free staff, and it creates an exception to the fixed term contract limits.

The guarantee of annual earnings is the mechanism to understand. According to the Fair Work Ombudsman, it is a written promise to pay at least the threshold over 12 months or more. An employee can accept it before they start. Earnings for this test include wages and the agreed value of non-monetary benefits. However, they exclude commissions, bonuses, overtime that is not guaranteed, and compulsory superannuation.

Unfair dismissal follows a related rule. According to the Fair Work Commission, some employees must earn less than the threshold to be protected from unfair dismissal. That applies where neither a modern award nor an enterprise agreement covers them. For dismissals on or before 30 June 2026, the figure was $183,100.

As a result, a senior contract needs a clear salary package. If the guarantee is why an award does not apply, record it in writing. Then set out what counts as earnings, and diarise a threshold check each July.

Which contract type fits: ongoing, fixed term, or casual?

Use an ongoing full-time or part-time contract where the work is expected to continue. A fixed term contract suits a set period, within the limits that apply from 6 December 2023. Finally, a casual contract fits only where there is no firm advance commitment to ongoing work and a casual loading is paid.

Fixed term contracts carry the most traps for employers. According to the Fair Work Ombudsman, a fixed term contract generally can’t last longer than 2 years, including renewals. It also can’t include an option to extend or renew more than once. In addition, consecutive contracts for the same or similar work can breach the rules.

There are exceptions to these limits, and one suits senior roles. The limits do not apply where guaranteed salary is above the high income threshold in the year of the contract. Other exceptions cover specialised skills, training arrangements, peak demand, and cover for someone temporarily away.

The definition of casual employment changed on 26 August 2024. A person is casual if there is no firm advance commitment to ongoing work when they start. They must also be entitled to a casual loading or casual pay rate. Whether that commitment exists depends on the real substance, practical reality, and true nature of the relationship.

Are restraint of trade clauses enforceable in Australia?

A restraint of trade clause is enforceable only if a court finds it reasonably necessary to protect a legitimate business interest. Confidential information and client relationships are common examples. The Fair Work Act sets no rules for non-compete clauses in employment contracts. Instead, general contract law applies, and New South Wales has its own legislation.

According to Treasury, the common law governs restraints between employers and workers, with a partial exception for New South Wales. At common law a restraint is presumed void unless it is reasonably necessary to protect the employer’s legitimate interest. A court weighs the interest at stake, then the area, time period, and activities the restraint covers.

The states differ on what a court can do with an overbroad clause. Outside New South Wales, a court can strike words out but cannot add words, which is why many contracts use “cascading” clauses with several options. By contrast, the Restraints of Trade Act 1976 lets a New South Wales court read a restraint down. As a result, Treasury reports restraints upheld in some form in 56.1% of New South Wales cases, against an average of 33.3% elsewhere.

Restraints are also common in Australian workplaces. According to Treasury, an e61 Institute survey found 1 in 5 Australian workers have a non-compete clause. They include lower-wage workers in childcare, labouring, and clerical roles. So draft each restraint for the role it protects rather than copying one clause everywhere.

What law changes should an older contract template reflect?

An older contract template should reflect three changes. Pay secrecy terms have no effect in contracts made on or after 7 December 2022. Fixed term contracts made on or after 6 December 2023 face limits and need an information statement. Since 26 August 2024, casual status turns on whether there is a firm advance commitment to ongoing work.

Each of those changes catches a different clause in an old template. A confidentiality clause that bans staff from discussing their pay now contains a term with no effect. Likewise, a fixed term contract with two renewal options breaches the limits, even under 2 years. A casual contract for someone with a set roster and promised ongoing work may not be casual at all.

Because the sample contracts were first published in 2021, read each one against the current rules before use. The award interpretation guide explains how award rules flow through to pay after the contract is signed.

When is a contract template not enough?

Frequently asked questions

Can an employment contract override the National Employment Standards?

An employment contract cannot exclude the National Employment Standards or provide for less than them. The same rule protects any award or enterprise agreement that covers the employee. If a contract term gives less than the minimum, the minimum still applies. A contract can, however, offer more generous terms than the law requires.

What is the high income threshold in Australia for 2026?

The high income threshold is $190,100 from 1 July 2026, up from $183,100 the year before. The figure is adjusted every year on 1 July. It decides whether an award applies to an employee with a guarantee of annual earnings. It also affects unfair dismissal eligibility and the fixed term contract limits.

Do award-free employees still get minimum entitlements?

Award and agreement free employees still receive the National Employment Standards and at least the national minimum wage. Their other terms come from their employment contract and the Fair Work Act. Some managers and professionals are covered by awards, so check the award classifications carefully before treating a role as award free.

How long can a fixed term contract be in Australia?

A fixed term contract made on or after 6 December 2023 generally cannot exceed 2 years, including renewals. It also cannot be extended more than once. Exceptions include employees whose guaranteed salary is above the high income threshold, specialised skills for a specific task, and cover for someone temporarily away.

Are non-compete clauses legal in Australian employment contracts?

Non-compete clauses can be included, but a court will enforce one only if it is reasonably necessary to protect a legitimate business interest. The Fair Work Act sets no rules for them, so general contract law applies. In New South Wales, a court can also read an overbroad restraint down to what is reasonable.

Related reading

• Sample independent contractor agreement templates
• What is Australian HR compliance software?
• Worknice employee onboarding software

Sources

1. Fair Work Ombudsman. “National Employment Standards.” Last updated 7 October 2026. Retrieved 8 October 2026. https://www.fairwork.gov.au/employment-conditions/national-employment-standards
2. Fair Work Ombudsman. “About employment contracts.” Last updated 23 October 2025. Retrieved 8 October 2026. https://www.fairwork.gov.au/employment-conditions/contracts
3. Fair Work Ombudsman. “Award and agreement free wages and conditions.” Last updated 25 September 2026. Retrieved 8 October 2026. https://www.fairwork.gov.au/employment-conditions/awards/award-and-agreement-free-wages-and-conditions
4. Fair Work Commission. “High income threshold.” Last updated 1 July 2026. Retrieved 8 October 2026. https://www.fwc.gov.au/high-income-threshold
5. Fair Work Ombudsman. “Fixed term contract employees.” Last updated 1 July 2026. Retrieved 8 October 2026. https://www.fairwork.gov.au/starting-employment/types-of-employees/fixed-term-contract-employees
6. Fair Work Ombudsman. “Casual employees.” Last updated 7 August 2026. Retrieved 8 October 2026. https://www.fairwork.gov.au/starting-employment/types-of-employees/casual-employees
7. Fair Work Ombudsman. “Probation.” Last updated 14 August 2026. Retrieved 8 October 2026. https://www.fairwork.gov.au/starting-employment/probation
8. Fair Work Ombudsman. “Get help with employment contracts.” Last updated 12 September 2025. Retrieved 8 October 2026. https://www.fairwork.gov.au/employment-conditions/employment-contracts/get-help-with-employment-contracts
9. The Treasury. “Non-competes and other restraints: understanding the impacts on jobs, business and productivity.” Issues paper, April 2024. Retrieved 8 October 2026. https://treasury.gov.au/sites/default/files/2024-04/c2024-514668-issues-paper.pdf
10. The Treasury. “Non-compete clauses and other restraints.” Retrieved 8 October 2026. https://treasury.gov.au/review/competition-review-2023/non-compete-clauses