What to include in an employment contract (with examples)

If you're hiring someone, you'll need to provide them with an employment contract. While it doesn't need to be flashy, it needs to cover the basics, at a minimum. This includes things like pay, hours, time off, and how their role will work. Leaving stuff out or relying on a half-baked template could result in you facing legal issues, underpayment claims, or confusion down the track.

A well-written employment contract helps set clear expectations from the very beginning. It can protect both you and your employee. It can also help you stick to the rules under the Fair Work Act, the relevant modern award (if applicable), and the National Employment Standards (NES).

In this article, we explain what to include in an employment contract, from the parts that are a legal requirement to the bits that just make life easier. We also touch on where employers commonly slip up.

What is an employment contract?

An employment contract is a written agreement between you and your employee. It outlines the basics of the job you're hiring them for. For example, what they’ll do, what you’ll pay them, and what you both agree to. Beyond a formality, an employment contract forms the foundation of your working relationship.

Legally, the contract needs to abide by the rules set out in the Fair Work Act, along with the NES. If there’s a modern award or enterprise agreement that applies to the role, you’ll need to factor that in as well. The employment contract can’t undercut these minimum standards. This is true even if both you and your employee agree to the undercutting.

There are a few different types of employment contracts. The most common ones are usually for full-time, part-time, or casual roles. Each employment type comes with different entitlements. So, the employment contract needs to clearly state which type of employment it is.

Another thing to be mindful of when tackling employment contracts is mixing up employees and contractors. They’re not the same. If you treat someone like an employee but call them a contractor, you could face considerable penalties. You need to make sure you’re using the appropriate contract for the job.

What to include in an employment contract

There’s no rule saying an employment contract has to be pages long or packed with legal jargon. But it does need to cover the things you and your employee both need to agree on before they start working for you.

Some of the points below are legal requirements under employment law. Others aren’t strictly mandated, but leaving them out can become problematic down the line. Either way, everything you'll find listed here is standard in most Australian employment contracts. And for good reason.

Required inclusions

Below, you can find the non-negotiables of a written contract of employment:

Parties to the contract (employer and employee details)

Start by naming both parties. So, the full legal name of the employer’s business, along with the ABN or ACN, and the employee’s full name and contact details. If you’re hiring under a company, be sure to use the registered business name (not a trading name).

Example:

This agreement is made between Coastal Café Pty Ltd (ABN 12 345 678 910), located at 21 Main Street, Byron Bay, NSW, and Jamie Lee, residing at 42 Ocean View Road, Lennox Head, NSW.

Job title and duties

List the job title and a short, specific job description. Focus specifically on what the role involves on a day-to-day basis instead of just listing vague terms like 'admin' or 'labour.' For instance, if the job involves scheduling appointments, using specific software, or lifting heavy stock, then say so. 

You don’t need to list every single task. But the more accurate the description is from the start, the easier it is to manage expectations later on.

Example:

Position: Front of House Supervisor

Your duties include managing daily café operations, creating staff rosters, supervising team performance, and ensuring high standards of customer service. You will also be responsible for opening and closing the café and handling customer feedback.

Start date and employment type (full-time, part-time, casual)

Write the exact date the person's employment will start. Then make the employment status clear. For example, is it casual employment, a permanent full-time position, or a part-time engagement? Don’t just say 'ongoing' or 'regular hours', as that opens the door for things to get messy.

Example:

Your employment will commence on 15 July 2025. You are being engaged as a permanent full-time employee.

Pay and remuneration (rate of pay, payment frequency, superannuation)

Spell out the exact pay rates they’ll receive. This should include how often they'll receive payment (weekly, fortnightly, etc.), and the amount of superannuation they'll receive (currently a minimum of 11.5% of Ordinary Time Earnings (OTE), set to increase to 12% on 1st July 2025).

If the role includes allowances (like meal, travel, or tool allowance), put those in this section too. If the job falls under a modern award, the pay must match or exceed the award minimum.

Example:

You will be paid $31.00 per hour, paid fortnightly into your nominated bank account. In addition, you will receive superannuation contributions of 11.5% of your ordinary time earnings in accordance with the Superannuation Guarantee (Administration) Act.

Working hours and location

List the expected hours of work. If the job runs on a roster, explain how it works and how much notice the employee will get. Also mention where the person will be working. For instance, on-site, remotely, or a mix of both. If work locations may change (like between job sites), you need to make this clear, too.

Example:

You will work 38 hours per week, spread across Monday to Sunday on a rotating roster. Standard shifts will fall between 6:30am and 4:00pm. Your usual place of work will be Coastal Café, 21 Main Street, Byron Bay, NSW. Weekly rosters will be provided at least 7 days in advance.

Leave entitlements (annual leave, sick leave, public holidays, etc.)

State the employee’s minimum legal entitlements to leave. For permanent full time or part-time staff, this usually includes a minimum of 4 weeks of accrued annual leave, 10 days of personal leave, and public holidays. Mention any extra leave (e.g. rostered days off (RDOs) or unpaid leave options).

Example:

As a full-time employee, you are entitled to:

• 20 days of paid annual leave per year
• 10 days of paid personal/carer’s leave per year
• All national and NSW public holidays

Leave will accrue progressively during your employment and be recorded in your payslips.

Notice periods and termination clauses

State how much notice each side needs to give to terminate the employment relationship. If the employee resigns, it's typical for them to need to provide 1 to 4 weeks’ notice, depending on how long they’ve worked with you. The notice requirements you include must meet or beat the minimum notice periods in the NES.

Also, explain what happens in a serious misconduct case. For example, when there's no requirement for a notice period.

Example:

Either party may terminate this agreement by providing 2 weeks’ written notice. If you have completed more than 12 months of continuous service, the required notice period will increase to 4 weeks.

In cases of serious misconduct (e.g. theft, assault, or serious safety breaches), employment may be terminated without notice.

Applicable modern award or enterprise agreement (if relevant)

If the role falls under a relevant award or agreement, name it specifically. If you're unsure, use the Fair Work Ombudsman’s Award Finder. If the role doesn't fall under an award or agreement, state that too. This can help avoid confusion about entitlements, like penalty rates and allowances.

Example:

This role is covered by the Hospitality Industry (General) Award 2020. All pay rates, allowances, and entitlements will align with the terms of this award.

Compliance with NES and Fair Work Act

Add a clause confirming that the contract follows all workplace laws, including the Fair Work Act and the NES. These laws apply to most employees covered by the Act and, as mentioned, set out the minimums for things like leave, notice, and hours of work. Remember, you can’t contract out of them, even if both parties agree.

Example:

This agreement complies with the Fair Work Act 2009 and includes all minimum entitlements under the National Employment Standards (NES). Nothing in this contract is intended to exclude or reduce those minimum standards.

Optional inclusions

Not every contract needs these extras, but adding them now can save awkward conversations later:

Probationary period terms

If you’re including a probation period, you need to mention how long it will go for. Probation periods are normally for a minimum period of 3 or 6 months, depending on the intricacy of the role. Explain how you’ll evaluate the employee’s performance during this time. For example, through informal check-ins or a formal review at the end of the probation period.

Make it clear that either party can end the employment during the probation period with less notice than usual. This should align with what’s allowed under the Fair Work Act or the applicable award (generally, 1 week).

Example:

This role includes a 3-month probation period. We’ll provide informal feedback throughout, and a formal review at the end. If things aren’t working out, either you or Coastal Café may end the employment by giving at least one week’s written notice.

Confidentiality clause

Name the things that must stay in-house. For instance, client lists, pricing, product plans, and any private data. In most cases, confidentiality continues after the job ends. You can set a time limit, like 2 or 5 years. But it’s common to say that anything confidential stays that way until it becomes public or you give permission to share it.

If you’re not sure, just keep it simple. Say the confidentiality obligation is continuous after the employment ends.

Example:

You must not share any confidential business information (such as supplier contacts, pricing, or internal procedures) with anyone outside the business, during or after your employment. This obligation continues after you leave Coastal Café.

Intellectual property ownership

If the employee will create anything as part of their role, such as code, designs, written content, software, or product ideas, then you need to say who owns the rights to that work. In most cases, the contract should say that the employer owns all intellectual property created during the course of employment.

If there’s any exception (like joint ownership or personal use rights), you’ll need to clearly explain that in the contract.

Example:

Any intellectual property you create as part of your job, including menu items, promotional materials, or branded content, remains the property of Coastal Café.

Restraint of trade or non-compete clauses

If you want to stop a former employee from poaching clients or working for a direct competitor, you can include a non-compete clause. These clauses need to be reasonable in both time and area. Courts won’t enforce them if they’re too broad. For example, a restriction of 3 to 6 months and a local area (like 5-20 km from your business) is more likely to hold up.

You also need to clearly lay out what business interest you’re protecting. For instance, client relationships or confidential information.

Example:

For 3 months after your employment ends, you must not work at or open another café within 5 km of Coastal Café that serves coffee, breakfast, or lunch, and targets walk-in customers in the local area. This protects our regular trade and customer relationships.

Code of conduct or workplace policies reference

If you have a code of conduct or workplace policies, include a clause that refers to them in the employment contract. You should also mention that the policies can change over time as your business grows or workplace laws evolve.

Example:

You agree to follow our Code of Conduct and workplace policies, which are available in our staff portal. These policies may be updated from time to time, and you must follow the most current version.

Performance expectations and review process

List the key targets the employee needs to meet. For example, sales numbers, project milestones, or client satisfaction scores. Let them know when you’ll carry out performance reviews, such as every 3 or 6 months. You can also mention who will lead those reviews.

Example:

We’ll assess your performance every 3 months based on speed of service, teamwork, and customer feedback. Your direct manager will lead the review and work with you to set improvement goals if needed.

Common employment contract mistakes 

Plenty of businesses get caught out by avoidable contract mistakes. What may seem like a small detail at the time can easily turn into a legal or financial mess down the track. This is especially true if the contract is missing key terms or doesn’t properly reflect how the job works.

Here are some of the most common slip-ups to be mindful of:

Leaving out required clauses

Leaving out important terms, such as pay rates, hours, leave entitlements, or notice periods, creates uncertainty and can open the door to disagreements. Even if the NES or relevant award covers some terms, you still need to put them in the contract. This helps to make sure that everyone’s on the same page from day one.

Using unclear or inconsistent wording

Vague language like 'as needed' or 'reasonable hours' doesn’t cut it. You need to be specific when it comes to expectations. If you say one thing about hours in one part of the contract and something different in another, you’re setting yourself up for potential issues later.

Copying templates without legal review

Copy-pasting from a contract you found online, or worse, from another business, can backfire. It might include terms that don’t fit your industry or leave out things that Australian law requires. Always tailor contracts to your business and state employment laws, and get legal advice if you’re feeling unsure.

Not updating contracts when roles change

If someone’s duties, hours, or work location change, their employment contract should reflect this change. Otherwise, you risk a mismatch between what’s on paper and what’s actually happening. This can become a problem if you ever need to rely on what's in the contract.

Confusing employee and contractor agreements

As mentioned, mixing these up is a major red flag. If someone works like an employee but you’ve given them a contractor agreement, you could face significant penalties for sham contracting. It's imperative that you use the right agreement for the working relationship.

Poor distribution and signing process

Sending contracts late or even after the employee has already started is more common than you’d think. Some businesses also send contracts by email but then never check if they were actually signed. If you don’t handle this part properly, you may not have a valid agreement to fall back on if something goes wrong. 

Using HR software with solid onboarding features can help you stay on top of the contract distribution and signing process.

Failing to store contracts securely and accessibly

Printing out employment contracts and filing them in a drawer, or saving them to someone’s desktop, isn’t good enough. If you can’t quickly access a signed agreement when there’s a dispute, you’ve got a serious problem. 

HR or payroll software with secure document storage can give you a way to keep everything organised and easily accessible.

Employment contracts made easy with Rippling

Creating, sending, and managing employment contracts manually can be a pain. This is especially true when your team is growing or spread across multiple jurisdictions. For small business employers, it’s one more admin task that takes up time and leaves room for costly mistakes.

Rippling can do the heavy lifting for you. You can build fully compliant employment contracts that match your company’s policies, your location, and the type of role you’re hiring for, minus the formatting nightmares and guesswork.

When you’re ready to make an offer, Rippling sends out the contract automatically, tracks who’s signed it, and reminds anyone who hasn’t. Once it’s signed, it connects straight into onboarding, payroll, and the employee’s records. So, everything’s taken care of in one place, right from the very start.

Rippling goes far beyond contract management. It’s an all-in-one workforce platform that brings HR, IT, and Payroll together in one neat and easy-to-use system. Plus, because everything runs off a single source of truth, your data stays in sync across every tool. That means less time double-handling or fixing errors, and more time doing what you do best!

Employment contract FAQs

What is the most important content of the employment agreement?

Start with the essentials, such as job title, duties, pay, hours, and notice periods. These are the core terms that define the working relationship, whether it's for casual employees or permanent employees. It's also key to state leave entitlements, superannuation, and any award coverage to avoid confusion or disputes later.

What can you leave out of an employment contract?

You can leave out things like dress codes, IT use rules, or workplace conduct if your workplace handbook or policies cover them. Basically, anything that doesn't affect pay or entitlements. If the job isn’t one of your fixed-term contracts, there’s no need to include an end date either. Just make sure you clearly lay out all legal minimums (like hours, pay, and leave) in the employment contract.

Should I include NES entitlements in full?

There's no need to spell out every NES clause word-for-word. A distinct line that says 'this contract follows the National Employment Standards' usually works fine. If you offer any extra leave or perks on top of the NES, you can list them so the employee gets the full picture.

How often do I need to update an employment contract? 

Review the contract whenever the role or pay changes. This may be in the case of a promotion, new location, different hours, or even just fresh responsibilities. You should also update it if awards or workplace laws shift in a way that affects the job. A quick yearly check-in can be a great way to keep everything current without too much fuss. 

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.