What is a Fixed-term employee?

Q: How long can a fixed-term contract be in Australia?

Under Fair Work changes effective December 2023, fixed-term contracts are limited to a maximum of 2 years, or 2 consecutive contracts, for the same or substantially similar role. Exceptions apply for specialist skills, training, peak demand, and government-funded positions.

Q: Do fixed-term employees get annual leave?

Yes, fixed-term employees accrue annual leave on a pro-rata basis just like permanent employees. They are entitled to 4 weeks of annual leave per year of service. Any unused leave must be paid out when the contract ends.

Q: Can a fixed-term contract be terminated early?

It depends on the contract terms. Some contracts allow early termination with notice, while others require the full term to be completed. If the employer terminates without proper grounds or notice, the employee may be entitled to pay for the remaining contract period.

Q: What happens at the end of a fixed-term contract?

The employment automatically ends on the specified date. The employer must pay out all accrued but unused leave. No redundancy pay is required as the end was predetermined. The employee may be offered renewal or a permanent position.

Q: Do fixed-term employees get notice of termination?

Fixed-term contracts expire automatically, so standard notice periods typically do not apply at the end of the term. However, the contract or applicable award may specify notice requirements for early termination.

What is a Fixed-term employee?

Updated 14 Jan 2026 • 5 min read

A fixed-term employee in Australia is a worker engaged under a contract with a specified end date or for the duration of a specific project or task. Fixed-term employees receive pro-rata entitlements similar to permanent employees, including annual leave and personal leave, but their employment automatically ends when the contract expires.

Understanding fixed-term employment in Australia

Fixed-term employment provides certainty for both employers and employees about the duration of work. Under Fair Work legislation, fixed-term employees have significant protections and entitlements.

Fixed-term employee

Set end date or project
Pro-rata leave entitlements
Maximum 2 years (new rules)
Auto-expires, no redundancy

Permanent employee

No end date
Full leave entitlements
Ongoing employment
Notice and redundancy apply

Fixed-term contract limitations (2023 changes)

The Fair Work Act now limits fixed-term contracts to prevent misuse:

New fixed-term contract limits

Maximum duration: 2 years for the same or substantially similar role

Contract limit: Maximum 2 consecutive contracts (including renewals)

Information statement: Must be provided to all new fixed-term employees

Anti-avoidance: Cannot break and re-engage to circumvent limits

Exceptions to fixed-term limits

The limitations do not apply to contracts for:

Specialist skills: Work requiring expertise not available within the organisation
Training arrangements: Apprenticeships or traineeships
Peak demand: Reasonably expected substantial increase in work
Emergency or temporary: Unforeseen circumstances requiring immediate cover
Government funding: Positions dependent on external funding
High-income employees: Earning above the high-income threshold

Fixed-term employee entitlements

Fixed-term employees receive similar National Employment Standards (NES) entitlements to permanent employees:

Fixed-term entitlements

Annual leave: 4 weeks pro-rata

Personal leave: 10 days pro-rata

Public holidays: Paid if rostered

Parental leave: Unpaid (if eligible)

Superannuation: Standard contributions

Leave payout: On contract end

Note: Fixed-term employees generally do not receive redundancy pay when their contract expires, as the end date was known from the start.

Australian compliance tip

Employers must provide a Fixed Term Contract Information Statement to new fixed-term employees. Breaching the new limitations may result in the employee being deemed permanent. The Fair Work Commission can make orders to enforce compliance.

Benefits of fixed-term employment

For employers

Project certainty: Staff for defined duration
Budget planning: Known labour costs
No redundancy: Contract expires naturally
Cover leave: Replace staff on parental leave

For employees

Leave entitlements: Pro-rata paid leave
Stability: Guaranteed work for the term
Experience: Build skills and networks
Pathway: May lead to permanent role

Managing fixed-term employees

Effective management includes:

Clear contracts: Specify exact end date or completion event
Information statement: Provide the Fixed Term Contract Information Statement
Track limits: Monitor 2-year/2-contract limits
Leave management: Track accruals using leave management software
End-of-contract: Calculate and pay out all unused leave
Renewal decisions: Plan for contract end or conversion to permanent

Common mistakes with fixed-term employment

Exceeding contract limits

Using fixed-term contracts beyond 2 years or 2 contracts without valid exceptions.

Missing information statement

Not providing the required Fixed Term Contract Information Statement.

Incorrect leave calculations

Not paying out accrued leave when the contract ends.

Vague end conditions

Contracts without clear end dates or completion criteria.

Key takeaways

Fixed-term employment in Australia provides workers for defined periods with pro-rata leave entitlements. New Fair Work limitations restrict contracts to 2 years or 2 consecutive contracts for the same role, with specific exceptions.

Employers must provide information statements, track contract limits, and pay out leave on contract end. Using workforce management software helps manage fixed-term employees alongside permanent staff while supporting compliance with Fair Work requirements.

Frequently asked questions

How long can a fixed-term contract be in Australia?

Do fixed-term employees get annual leave?

Can a fixed-term contract be terminated early?

What happens at the end of a fixed-term contract?

Do fixed-term employees get notice of termination?

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