Start by determining the scope of the services required. Typically, the extent of the job will fall into one of the following categories:
- Single project: the job lasts until the project is complete
- Fixed-term: the job ends on a specific date
- Indefinite: the job is ongoing
Outline the services that the client is hiring the contractor to complete, such as computer repair services. Be clear and specific when describing the tasks required and indicate any important dates.
Include the essential details of each party in the contract. List the contractor and client details, including each party’s address and Australia Business Number. The Australian Taxation Office (ATO) provides businesses with an Australian Business Number (ABN) for tax administration purposes. If you are required to register for Goods and Services Tax (GST), the contract should include the ABNs of both parties. Clarify whether each party is an individual or organisation.
Outline the billing details by determining whether the client will pay a flat fee, hourly rate, or periodically (such as weekly) depending on the type of job. A contractor can also choose a different billing method, such as stage payments (like paying 50% of a flat fee beforehand and 50% of the fee after the job is complete).
Determine if there will be any interest charged on late payments. The contract should first determine what qualifies as a late payment. Typically, 15-30 days is sufficient time to pay an invoice. Payment after that period will accrue interest. Also, the contract should determine the annual interest rate on any late payments. Consumer protection laws prohibit extortionate interest rates, even if both parties agree to them. An interest rate that exceeds the maximum rate permitted by law will not be enforceable.
Determine which party will pay the superannuation guarantee contribution. If the contractor is a partnership or company, then the contractor is required to pay the superannuation guarantee contributions for its own employees. If the contractor is an individual, then the client may need to pay the superannuation guarantee contribution for the contractor. If the superannuation status of the contractor is uncertain, then consult the local taxation office.
Depending on the circumstances, the contractor and client may choose to include additional details that determine:
- Whether either party can end the contract early by serving notice
- Whether or not the client will reimburse reasonable, work-related expenses
- Who will own any intellectual property that the contractor creates under this contract
- If the contractor has a duty to not reveal confidential client information
To complete and execute the agreement, both parties must sign it. You may choose to have a witness sign the document. Complete the IT service contract template to create a customised document for Australia.