How Long Can a Contractor Work for the Same Company?

How long can a contractor work for the same company in Australia? There’s no legal limit. A contractor can work for one business for a month, a year or a decade, as long as the relationship is still genuine contracting in how it actually runs, not just in what the contract says.

Here’s the awkward part. Most long-term contractor arrangements don’t start out wrong. They drift. First comes a company email address, then a standing Monday meeting, then a desk. Three years later nobody has looked at the paperwork, and your “contractor” looks a lot like staff.

Is there a time limit on how long a contractor can work for the same company?

No. There’s no rule that a contractor becomes an employee after six months, 12 months or two years. You can keep using the same contractor indefinitely.

That “two-year rule” people mention comes from somewhere else. Fixed-term employment contracts generally can’t run past two years or be extended more than once, unless an exemption applies. That rule is about employees. It says nothing about contractors, but plenty of founders assume it does.

So why does time matter at all? Because it gives the relationship room to change. The Fair Work Ombudsman is clear that changes in how a relationship operates can change whether someone is a contractor or an employee. A defined six-week project rarely drifts. An open-ended role with no end date almost always does.

Decision-makers also weigh whether there’s an expectation that the work will keep going. A contractor who has been “on the next job” every week for four years has an obvious expectation of ongoing work. That’s one factor. On its own it won’t decide anything. Stacked with others, it can.

How does the law decide if a long-term contractor is really an employee?

The test changed in 2024, and a lot of online guidance hasn’t caught up. From 26 August 2024, section 15AA of the Fair Work Act 2009 (Cth) says the question turns on the real substance, practical reality and true nature of the relationship.

That reversed the High Court’s 2022 approach in the Personnel Contracting and Jamsek cases. Back then, a comprehensive written contract largely decided the answer. Now the Fair Work Ombudsman’s whole of relationship test looks at the contract terms and how the work is actually done.

What this means in practice: if your contractor agreement was drafted before August 2024 and you’re relying on it to carry the argument, it won’t. The contract still matters. It just can’t outvote what happens on a normal Tuesday.

This test generally applies to constitutionally covered businesses, which includes most businesses trading through a Pty Ltd company. No single factor decides it. Here’s how the main ones tend to read:

Factor	Looks like contracting	Looks like employment
Control	They decide how, when and where the work gets done	You set hours, rosters and methods
Delegation	They can send someone else or subcontract	Only they can do the work
Tools and equipment	They bring their own gear and software	You supply the laptop, vehicle or uniform
Financial risk	They quote, wear the cost of fixing mistakes, can profit or lose	They get paid regardless of the outcome
How they’re paid	Per job, milestone or deliverable	A regular fixed amount for hours worked
Other clients	They market themselves and work for others	They work only for you, often by contract
Integration	Clearly a separate business	On your org chart, in staff meetings, reviewed like staff
Expectation of ongoing work	Defined projects with end points	Open-ended, rolling work with no end date

What about the high-income opt-out?

Contractors earning above the contractor high income threshold can give you a written notice opting out of the whole of relationship test. From 1 July 2026, that threshold is $190,100.

Don’t treat it as a get-out-of-jail card. The contractor can withdraw the notice at any time, and they only get one notice per relationship. Opting out only changes which test applies. It doesn’t let anyone choose to be a contractor with no test at all.

What are the red flags after 12 months with the same contractor?

Wondering how long a contractor can work for the same company before you should worry? Run through this list once a year for anyone you’ve used for more than 12 months. Be honest. Nobody else is reading it.

• They work set days or hours that you decide, and they need your approval to take time off.
• They have a company email address, business cards or an employee-style title.
• They sit in staff meetings, get performance reviews or appear on your org chart.
• You pay them the same amount every week or fortnight, whatever gets delivered.
• They can’t send anyone else to do the work, and the contract says so.
• You supply most of their tools, equipment or software.
• They haven’t had another client in over a year, and your contract restricts them from taking one.
• The original scope ran out long ago and you just keep extending it.

One or two ticks aren’t a crisis. If several apply, the relationship has probably drifted. That’s the moment to fix the paperwork, change how the work runs, or have the conversation about employment.

What to do if several red flags apply

You’ve really got three options, and the wrong move is doing nothing. First, reset the arrangement: give back control of hours and methods, move to milestone pricing, drop the exclusivity clause and put a fresh agreement in place that matches the new reality. This works when the person genuinely wants to run their own business.

Second, offer employment. If the role is ongoing and you want to manage it like a job, stop fighting it. Third, wind the engagement down cleanly at the end of its current scope, with the notice your contract requires.

Whichever path you pick, don’t restructure quietly and hope. A sudden change to paperwork with no change in how the work runs looks worse, not better. Change the substance first, then the documents.

Do you have to pay super for a long-term contractor?

Possibly, and this is where long engagements get expensive. Super runs on a completely separate test from Fair Work. Section 15AA doesn’t apply to super or payroll tax at all.

Under the super guarantee rules, an individual contractor working under a contract that’s wholly or principally for their labour is treated as your employee for super purposes. That’s true even if they quote an ABN and send invoices. The ATO’s guidance on super for independent contractors points to three things together:

• They’re paid mainly for their personal labour and skills.
• They have to do the work themselves and can’t delegate it.
• Payment is for time or effort, not for achieving a specific result.

Here’s the most expensive sentence in contracting: “they invoice us, so there’s no super”. And the longer the engagement, the bigger the back-bill if you’ve got it wrong. Four years of missed super plus the super guarantee charge adds up fast.

Two practical points. If you contract with a company, trust or partnership, you generally don’t pay super for the person that entity employs to do the work. And from 1 July 2026, Payday Super means any super you do owe is due with each payment, not quarterly. If an invoice mixes labour and materials, ask for them to be itemised separately. For a deeper look at subbies specifically, see our guide to whether subcontractors are entitled to superannuation.

One more tax trap: most states have payroll tax contractor provisions that can treat payments to contractors as wages. Thresholds and exemptions vary by state, so check with your accountant if your contractor spend is significant.

Workers’ compensation is a separate question again. Each state runs its own scheme with its own rules on who counts as a worker, and some contractors are deemed workers for insurance purposes even when they’re contractors everywhere else. Ask your insurer before assuming a long-term contractor sits outside your policy.

Can a subcontractor work for only one company in Australia?

Yes. A subcontractor working for one company is common in construction, trades, IT and cleaning, and it’s perfectly legal. Working for a single company doesn’t make a subcontractor an employee. It’s one factor, and it becomes a problem when the others line up behind it.

Picture two subbies working for the same builder for three years. The first turns up five days a week when told, gets paid by the hour, uses the builder’s gear and can’t send anyone in their place. That’s employee-shaped, and there’s likely a super bill too. The second runs their own Pty Ltd, quotes per stage, brings their own tools and sends their apprentice when they’re busy. That looks like a business, even with one main client.

Same duration, same exclusivity, completely different risk. If you’re the head contractor, get a proper subcontractor agreement in place that reflects how the work really runs. Not sure which label fits? Our breakdown of contractors versus subcontractors covers the difference.

Is sham contracting a risk if the arrangement was genuine at the start?

Yes, and this surprises people. Sham contracting is misrepresenting an employment relationship as a contracting one. You don’t need to have planned it. If the relationship drifted into employment and you kept calling it contracting, you can still be exposed.

Two related rules catch people out. The Fair Work Act bans dismissing (or threatening to dismiss) an employee so you can re-engage them as a contractor doing the same work. It bans knowingly or recklessly making false statements to persuade someone to become a contractor too.

On 27 February 2024, the defence got tougher. You now have to show you reasonably believed the arrangement was genuine contracting. “We didn’t know” doesn’t cut it anymore. A documented annual review is exactly the kind of evidence that supports a reasonable belief.

Contractors have more bargaining power now as well. Since 26 August 2024, contractors earning under the high income threshold can ask the Fair Work Commission to deal with unfair terms in their services contract.

How do you keep a long-term contractor arrangement on the right side of the line?

Most founders over-complicate this. Whatever the answer to how long a contractor can work for the same company in your case, you don’t need a brand new contract for every task. You need one solid agreement that matches reality, plus a habit of checking it still does.

1. Match the agreement to the entity. Use an individual contractor agreement for sole traders, and a Contractor Agreement (Company) when the contractor works through their own Pty Ltd.
2. Scope work to outcomes. A master agreement plus a statement of work for each project gives you clear deliverables and natural end points, without re-signing everything.
3. Leave control with them. Set deadlines and standards. Let them decide the hours, methods and location.
4. Keep delegation and other clients open. A genuine right to send someone else, and freedom to work for others, both point firmly towards contracting. Tight exclusivity clauses push the other way.
5. Pay for results where you can. Milestone or per-job pricing beats a flat weekly fee. Ask for labour and materials to be split on invoices.
6. Put IP and confidentiality in writing. After years of work, you want certainty that you own what they built.
7. Review every 12 months. Run the red-flag list, update the scope, and keep a short file note. That note is your evidence of a reasonable belief.

What we see in Lawpath consultations

Old contractor documents that don’t protect the IP. A pattern our lawyers flag in contractor paperwork is an intellectual property clause that isn’t irrevocable, or one that lets ownership fall away if the contract ends. That hurts most after a long engagement, because years of work are sitting on shaky ground.

The “they’re a company, so we’re safe” assumption. Business owners regularly ask whether super exposure lingers even when the contractor is a company on a fixed fee. For super, contracting with a company generally takes you outside the labour-only rule. It doesn’t make the rest of the relationship immune from scrutiny, though.

Paperwork after the fact. Our lawyers’ starting point is simple: anyone the company engages should have a written employment or contractor agreement before work starts. Retro-fitting one three years in is possible. It’s just harder to make it reflect a relationship that has already set its shape.

Should you just hire your long-term contractor as an employee?

If the role is core, ongoing and managed like a job, probably yes. Employment costs more on paper because of super, leave and possibly payroll tax. In exchange you get certainty, loyalty and a lot less legal guesswork.

Converting a contractor to an employee is completely lawful. (It’s the reverse direction, employee to contractor for the same job, that gets businesses into trouble.) Before you switch, check whether any past super or entitlements are owed. That way the conversion fixes the future without leaving a question mark over the past.

When you’re ready, a full-time employment agreement sets out pay, hours and entitlements properly from day one. If there’s real money at stake from past years, speak to an employment lawyer first. And if you’re still weighing it up, our guide to the difference between a contractor and an employee is a good next read.

Frequently asked questions

Is there a two-year limit on contractors in Australia?

No. The two-year cap applies to fixed-term employment contracts, not contractors. You can engage a genuine contractor for as long as you like. What matters is whether the relationship still works like contracting in practice.

Can a contractor work full-time hours for one company?

Yes, but it adds risk. Full-time hours for a single client, combined with set rosters and hourly pay, start to look like employment. If the hours are high, make sure the contractor still controls how the work gets done and is paid for outcomes.

Can a subcontractor work for only one company?

Yes. Exclusivity on its own doesn’t make a subcontractor an employee. It becomes a problem when it lines up with control, hourly pay, no right to delegate and the business supplying the tools. Subbies trading through their own company carry less super risk for the principal.

Can you be an employee and a contractor for the same company?

It’s possible when the contract work is genuinely separate from the job, but it’s high risk. Regulators look closely at dual arrangements, and moving an employee’s own duties onto an invoice can breach sham contracting laws. In most cases, keep all their work under employment.

Can a subcontractor hire another subcontractor?

Usually yes, if their contract allows it. A real right to delegate or subcontract is one of the stronger signs of a genuine contractor. If you need approval rights over who does the work, write them in rather than banning delegation outright.

How much notice does a contractor need to give?

Whatever the contract says. Contractors don’t get the National Employment Standards notice periods that employees do. If your agreement is silent, a court may imply reasonable notice, so it’s far easier to set a clear period for both sides in writing.

Do I have to pay super to a contractor with an ABN?

Sometimes. If they’re an individual paid mainly for their own labour, must do the work personally and are paid for time rather than results, super guarantee applies to the labour component. An ABN doesn’t change that. From 1 July 2026, it’s due with each payment.

Does a contractor become an employee after 12 months?

Not automatically. No milestone flips the switch. But 12 months is a sensible point to check whether the relationship has drifted, because longer engagements give control, integration and an expectation of ongoing work more time to build up.

However long a contractor has worked for the same company, you’re not in trouble by default. Plenty of long relationships are completely genuine. Usually the fix is a clear agreement and a quick yearly check, and you can have both sorted this week.

Start your Contractor Agreement today and lock in an arrangement that holds up for the long haul.