A fixed term contract ends on a set date, after a set period or at the end of a season. Since 6 December 2023, a fixed term contract in Australia can't run for more than 2 years including extensions, can't be extended or renewed more than once, and back to back contracts for the same work are limited. Your employer must also give you the Fixed Term Contract Information Statement. Some jobs are exempt, including roles paid above the high income threshold, which is $190,100 from 1 July 2026.
What is a fixed term contract?
The Fair Work Ombudsman describes fixed term employees as people employed on a contract that terminates at the end of a set period. The contract might end on a set date, after a set period of time or after a season. Fair Work's example is a 12 month contract to cover a parental leave position.
Fixed term employees are generally entitled to the same wages, penalty rates and leave as permanent employees. An award or registered agreement may give extra terms for fixed term employees. Fixed term employees aren't the same as independent contractors.
The limits in this guide don't apply to casual employees.
How long can a fixed term contract be?
A fixed term contract can't be for longer than 2 years, and that includes any extensions or renewals. The contract also can't contain an option to:
- extend or renew it so the employment lasts longer than 2 years, or
- extend or renew it more than once.
The second rule catches contracts that stay under 2 years in total. Fair Work's example is a 6 month contract that gives the employer the right to extend twice, for up to 4 months each time. That breaks the limits.
These limits apply to fixed term contracts made on or after 6 December 2023, unless an exception applies.
Can your employer keep giving you new fixed term contracts?
Only within limits. You can't be offered a new fixed term contract when all three of these are true:
- your previous contract was also for a fixed term
- the previous contract and the new one are for the same or similar work
- there is substantial continuity in the employment relationship between the two.
And at least one of these also applies:
- the previous contract had an option to extend that was used
- the previous contract and the new one together would run for more than 2 years
- the new contract has an option to renew or extend
- there was an earlier fixed term contract before the previous one, for the same or similar work, with substantial continuity.
Contracts made before 6 December 2023 aren't caught by the limits themselves. They still count when your employer works out whether a new contract made on or after that date is allowed.
Here is how Fair Work's own examples land:
| Contract | Within the limits? |
|---|---|
| One contract of 3 years | No, it runs past 2 years |
| 6 months, with the right to extend twice by up to 4 months each | No, it can be extended more than once |
| 12 months with no extension option, then a new 12 month contract for the same job with no extension option | Yes, the total isn't more than 2 years |
| 12 months, then a new 18 month contract for the same job | No, the total runs past 2 years |
| 12 months extended once by option, then a new 12 month contract for the same job | No, an extension option was used and the total runs past 2 years |
What is the Fixed Term Contract Information Statement?
It is a document from the Fair Work Ombudsman. Since 6 December 2023, your employer must give it to every employee engaged on a new fixed term contract, when you enter the contract or as soon as possible after. It covers:
- what a fixed term contract is
- the limits on using fixed term contracts
- the exceptions to those limits
- how to resolve a dispute about the limits and exceptions.
Your employer can hand it to you in person, post it to your home address, or send it electronically if you agree, for example by email or as a link. It must be the version in place on the day the contract is made.
Every new employee must also get the Fair Work Information Statement, which is a separate document.
Which jobs are exempt from the limits?
The limits don't apply when your contract is:
- for a specific task that needs your specialised skills
- part of a formal training arrangement under state or territory law, such as an apprenticeship or traineeship
- for essential work during a peak demand period
- for emergency circumstances, or to replace someone who is temporarily away, such as an employee on parental leave
- for a high income employee, meaning your guaranteed salary is above the high income threshold in the year the contract is made
- for a role funded in whole or part by government funding that runs for more than 2 years and is unlikely to be renewed
- for a governance position held for a limited time under the rules of a corporation or association
- allowed by the award that covers your job.
The government funding exception isn't the same as working for a government agency or department on a fixed term contract. There are also extra exceptions for some contracts in organised sport, high performance sport, charities and not-for-profits, and medical or health research.
How does the high income exception work if you're part-time?
The threshold is pro rata for part-time employees and for contracts shorter than a year. It is worked out from the hours your contract requires, divided by the hours a full-time employee in that job would work, multiplied by the threshold for the financial year the contract is made in.
Fair Work's example is a part-time doctor offered 30 hours a week for 3 years, where full time under her award is 38 hours. Over a year that is 1,560 hours against 1,976, which is 0.789. Multiplied by $190,100, her threshold is $149,988.90. Her salary of $165,000 is above it, so the 3 year contract is exempt from the limits.
If no award or agreement sets full-time hours, the comparison uses full-time employees doing similar work for the same employer. If that can't be worked out either, full time is taken to be 38 hours a week.
What happens if your contract breaks the rules?
If a fixed term contract doesn't meet the limits, its end date no longer applies, so the contract doesn't end automatically on that date. The other terms of your employment keep applying, along with your entitlements under the law, any award or agreement, and your contract.
Your employer also can't try to get around the rules. Fair Work lists these as actions an employer can't take to avoid the limits:
- ending your employment, or not re-employing you for a period of time
- not re-engaging you and hiring someone else to do the same or substantially similar work
- changing the type of work you do or changing the employment relationship.
Any of these may also be adverse action under the general protections laws.
How do you resolve a dispute about a fixed term contract?
Start with a conversation at work. If that doesn't settle it, either you or your employer can take the dispute to the Fair Work Commission using Form F10DA. The Commission can help through mediation or conciliation, or by giving a written recommendation or opinion. If you both agree, it can arbitrate, which ends in a binding decision and may include an order.
The Fair Work Ombudsman can start court proceedings for breaches of these rules, and employees can also take civil action in the small claims court.
What do you get when a fixed term contract ends?
Under the National Employment Standards, notice periods don't apply to employees employed for a specific period of time, season or task. Fair Work says fixed term employees generally don't get notice of termination or redundancy pay when their employment ends at the end of the contracted period, and generally can't claim unfair dismissal in that situation. Our guide to redundancy pay covers who does get it.
Any unused annual leave is paid out in your final pay, at the amount you would have received if you had taken it. Our guide to resigning covers what goes in final pay and when it is due.
If you are offered a new contract or a permanent role at the end of a fixed term, it is a natural point to talk about pay. Our guide to negotiating a salary covers how to ask.
This is general information, not legal advice. The Fair Work Ombudsman can't give legal advice about an individual contract, so if your contract is unclear, get legal help.
Sources
- Fair Work Ombudsman, Fixed term contract employees (rules from 6 December 2023, the 2 year, renewal and consecutive contract limits and examples, exceptions and the part-time threshold example, $190,100 from 1 July 2026, contracts that break the limits, anti-avoidance, disputes, entitlements, notice and unfair dismissal at the end of a contract, read 8 October 2026, content last updated 1 July 2026)
- Fair Work Ombudsman, Fixed Term Contract Information Statement (who must get it, when, what it covers, how it can be given, read 8 October 2026, content last updated 5 May 2026)
- Fair Work Commission, Disputes about fixed term contracts (Form F10DA, mediation, conciliation, recommendation or opinion, consent arbitration, read 8 October 2026)
- Fair Work Ombudsman, Who doesn't get notice (no NES notice for employees employed for a specific period, season or task, read 8 October 2026, content last updated 14 August 2026)
- Fair Work Ombudsman, Payment for annual leave (unused annual leave paid out when employment ends, read 8 October 2026, content last updated 10 August 2026)
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