Independent Contractor Agreement: What to Include So You Actually Get Paid

You finished the work. The client goes silent. Your invoices sit unpaid.

Most payment disputes don’t start when the invoice arrives — they start the day you signed a vague agreement. This guide shows you exactly what to include in your independent contractor agreement so you get paid, on time, without argument.

Why payment disputes happen

Three problems cause most contractor payment fights:

Vague scope of work — the client thinks you agreed to unlimited revisions, extra meetings, or additional deliverables you never quoted for.

No clear payment terms — the agreement says “payment on completion” but doesn’t define what completion means, when payment is due, or what happens if they don’t pay.

Weak termination clauses — the client cancels halfway through and refuses to pay for work already done.

All three are preventable with specific clauses.

The scope of work clause that stops scope creep

You quote for five blog posts, deliver them, then the client expects three rounds of edits, a strategy call, and two extra posts — all for the original price.

Your independent contractor agreement needs a defined scope of work that states:

• Exactly what you will deliver (deliverables listed individually)
• How many revisions or edits are included
• What is explicitly excluded from the scope
• The process for requesting additional work (variation clause)

Example scope language:

“The Contractor will deliver five 1,200-word blog posts on topics approved by the Client. Each post includes one round of minor edits (up to 10% of word count). Additional edits, rewrites, or new posts are considered variations and will be quoted separately at the Contractor’s standard hourly rate of $150 + GST.”

The client knows exactly what they’re paying for. Anything beyond that triggers a new quote.

Payment terms that actually work

“Payment on completion” means nothing if you don’t define completion, the payment method, and the timeline.

Your agreement should include:

Milestone payments — break the project into stages with payment tied to each stage. For longer projects, never wait until the end to get paid.

Invoice terms — state when invoices are issued (on completion of milestone, end of month, etc.) and when payment is due (7 days, 14 days, 30 days).

Payment method — bank transfer, credit card, PayPal. Specify it. If you don’t accept cheques, say so.

Late payment interest — you can charge interest on overdue invoices if your contract says so. Include a late fee clause.

Example payment clause:

“The Client will pay the Contractor in three milestones: 30% on signing this agreement, 40% on delivery of draft deliverables, and 30% on final approval. Invoices are payable within 7 days of issue by direct bank transfer. Overdue invoices incur interest at 10% per annum calculated daily from the due date.”

This clause makes it impossible for the client to claim confusion.

Deposits and upfront payments

For new clients or large projects, always take a deposit. It proves commitment and covers your initial time investment if the client disappears.

A standard deposit is 25-50% of the total project fee, paid before work starts. Your agreement should state:

• Deposit amount and due date
• That work does not commence until the deposit clears
• Whether the deposit is refundable (typically non-refundable once work begins)

Example deposit clause:

“A non-refundable deposit of $2,500 (50% of total project fee) is due within 3 days of signing this agreement. The Contractor will commence work only after the deposit has cleared. The deposit will be deducted from the final invoice.”

Variations and additional work

Clients always ask for extras. Your agreement needs a variation clause that makes it clear: new work equals new quote.

Example variation clause:

“Any work outside the agreed scope of work constitutes a variation. The Contractor will provide a written quote for the variation. Work on the variation will not commence until the Client approves the quote in writing. Variations will be invoiced separately.”

This stops the “while you’re at it, can you also…” requests that eat your margin.

Termination and payment for work done

What happens if the client cancels the project halfway through? Without a termination clause, you might walk away with nothing.

Your agreement should cover:

Termination for convenience — either party can end the agreement with written notice (7, 14, or 30 days is standard).

Payment on termination — you get paid for all work completed up to the termination date, plus any non-cancellable expenses already incurred.

Return of materials — the client must return any work-in-progress or pay for it.

Example termination clause:

“Either party may terminate this agreement by giving 14 days’ written notice. On termination, the Client will pay the Contractor for all work completed to the date of termination, calculated on a pro-rata basis, plus any expenses already incurred. The Contractor will deliver all completed work and work-in-progress to the Client on receipt of final payment.”

This ensures you’re not left unpaid if the client changes their mind.

Intellectual property and payment

Here’s a trap: if your agreement transfers IP ownership on creation (not on payment), the client owns your work even if they haven’t paid you.

Your IP clause should state that ownership transfers only on full payment.

Example IP clause:

“All intellectual property in the deliverables remains the property of the Contractor until the Client has paid all invoices in full. On receipt of final payment, ownership transfers to the Client.”

This gives you leverage. No payment equals no ownership.

Dispute resolution clause

Even with a solid agreement, disputes can happen. A dispute resolution clause keeps you out of court and gets you paid faster.

Include a clause requiring mediation before litigation:

Example dispute clause:

“If a dispute arises, the parties agree to attempt to resolve it by mediation before commencing legal proceedings. If mediation fails, the dispute will be referred to the appropriate tribunal or court in [your state].”

Mediation is faster and cheaper than court.

GST and invoicing requirements

If you’re GST-registered, your agreement should state that all fees are exclusive of GST and that GST will be added to invoices.

Example GST clause:

“All fees stated in this agreement are exclusive of GST. The Contractor will issue a tax invoice including GST where applicable.”

This avoids the client claiming they thought GST was included in your quote.

How Claim Done helps contractors

Claim Done’s Independent Contractor Agreement service generates a complete agreement tailored to your specific project. You answer questions about the scope, payment terms, and deliverables — our Programmatic Algorithms draft the agreement based on Australian contract law principles.

Flat fee, no subscription, ready in about 5 minutes.

The agreement includes all the clauses covered in this guide: defined scope, milestone payments, variation process, termination rights, IP protection, and dispute resolution.

For contractors who’ve already been stiffed and need to recover payment, Claim Done also offers a Letter of Demand service — a professionally drafted demand letter delivered by email to the non-paying client.

Final checklist: what your agreement must include

Before you sign any independent contractor agreement, check for:

• Defined scope of work — specific deliverables, exclusions, and revision limits
• Clear payment terms — milestone payments, invoice due dates, payment method
• Deposit clause — upfront payment before work starts
• Variation clause — process for quoting and approving additional work
• Termination clause — notice period and payment for work done
• IP ownership — transfers only on full payment
• Late payment interest — penalty for overdue invoices
• Dispute resolution — mediation before court
• GST clause — if you’re registered

Get these clauses right and you’ll spend less time chasing payment and more time doing the work you’re actually good at.

Get your contractor agreement sorted

Don’t start another project with a vague handshake deal. Claim Done’s Independent Contractor Agreement service gives you an agreement, drafted in about five minutes for you to review — covering scope, payment terms, IP rights, and termination clauses that protect you from non-payment.

Fixed fee. Australia-wide. Ready when you are.

Frequently Asked Questions

Can I charge interest on late invoices in Australia?

Yes. A late payment clause in your agreement sets the interest rate and when it applies. Without one, you can still ask the court for interest up to judgment, for example under s 100 of the Civil Procedure Act 2005 (NSW) for claims of $1,000 or more. If you include a clause, state the rate and that it is calculated daily from the due date.

What is a reasonable deposit for a contractor agreement?

A deposit of 25-50% of the total project fee is standard in Australia. For new clients or large projects, 50% is common. The deposit should typically be non-refundable once work commences and deducted from the final invoice.

Do I need a written independent contractor agreement?

Yes. Verbal agreements may be legally binding in Australia, but they’re almost impossible to enforce in a payment dispute. A written agreement signed by both parties is the only practical way to prove what was agreed, especially regarding scope, payment terms, and deliverables.

What happens if the client cancels the project early?

If your agreement includes a termination clause, you’re typically entitled to payment for all work completed up to the termination date, calculated on a pro-rata basis, plus any non-cancellable expenses. Without a termination clause, you may have to negotiate or take legal action to recover payment.

Can I keep the work if the client doesn't pay?

Yes, if your IP clause states that ownership transfers only on full payment. Until the client pays all invoices, you retain ownership of the work and can withhold delivery. This gives you significant leverage in payment disputes.