Your terms of business are the agreement that turns hard work into a paid invoice. They set out what you charge, when the fee is earned, what happens if a candidate leaves early and how long an introduction stays yours. Yet many recruiters send terms once, forget where the signed copy lives and only reread them when a client disputes an invoice. This guide covers what Australian recruitment agencies usually include in their terms of business, why each clause matters and how to keep signed terms connected to your clients and placements.
This article is general information, not legal advice. Have a lawyer who works with recruitment businesses review your final terms before you use them.
What terms of business are for
Terms of business, sometimes called a client agreement or terms of engagement, are the contract between your agency and the client who hires through you. They protect both sides. The client knows exactly what they will pay and what support they get if a placement does not work out. You know when your fee is due and that a candidate you introduced cannot simply be hired around you.
Clear terms also make you look professional. A boutique agency that sends a tidy, plain English agreement before the first submission signals that it runs a proper business, which matters when you are competing with larger firms for the same role.
When to send your terms
The best time to agree terms is before you send a single CV. Once a client has a candidate profile in their inbox, your leverage drops and any dispute about fees becomes much harder to resolve. Make signed terms a step in your process, so a new client cannot move past the briefing stage until they have agreed to them.
If you work across several hiring managers at one company, check who has authority to sign for the business. Terms signed by someone without that authority can create problems later.
The clauses most agencies include
Fees and how they are calculated
State your fee clearly. For permanent roles this is commonly a percentage of the first year remuneration package, so define exactly what that package includes, such as base salary, superannuation, guaranteed bonuses, car allowances or other benefits. Vague wording here is one of the most common sources of invoice disputes. If you offer flat fees, retained arrangements or different rates for different role levels, spell each one out. Our guide to retained vs contingent recruitment explains how those models differ.
For contract or temporary placements, set out the margin or charge rate structure, how timesheets are approved and how often you invoice.
When the fee is earned
Be specific about the trigger. Is the fee earned when the candidate accepts a verbal offer, signs a contract or starts work? Each choice carries different risk. Many agencies tie the fee to acceptance of an offer, with the invoice issued at acceptance or start date, but whatever you choose, write it down so nobody has to guess.
The introduction clause
The introduction clause protects your work. It typically says that if a client hires a candidate you introduced, in any role and through any channel, within a set period after the introduction, your fee applies. It should cover hires into a different role, hires through a related company and candidates who are later referred on to another business by your client.
Define what counts as an introduction, for example sending a CV, sharing a name or arranging an interview. Then make sure your system records the date and method of every submission, because that record is your evidence if a client hires a candidate months later.
Replacement or refund guarantee
Most clients expect some protection if a placed candidate leaves early. Common options are a free replacement or a partial refund within a set period after the start date. Decide which you offer, how long the period runs and what conditions apply. Typical conditions include the client paying the invoice on time, telling you promptly when the candidate leaves and the departure not being caused by redundancy or a material change to the role.
Guarantees affect your real revenue, so track them. A placement that triggers a replacement costs your consultants time, and a refund reduces the fee you actually keep.
Payment terms
Set a clear payment period, how invoices are issued and what happens if payment is late. Keep this simple and enforce it consistently. If you chase every overdue invoice by hand from a spreadsheet, payment terms are easy to let slide.
Offer and withdrawal
Cover what happens if a client withdraws an offer after the candidate accepts, or if a candidate is engaged and then the role is cancelled. Some agencies include a cancellation fee for these cases, particularly on retained or exclusive work.
Candidate information and privacy
Clients receive personal information about candidates, so your terms should state that the client will use it only for the purpose of the recruitment and handle it in line with Australian privacy law. Tie this to your own privacy policy and the way you store and share CVs. Our guide to CV branding and redaction best practice covers how to present candidate information safely.
Liability and responsibilities
Make clear what checks you perform, such as reference checks or right to work checks, and what remains the client's responsibility, such as final hiring decisions, workplace safety and employment contracts.
Common mistakes to avoid
- Sending CVs before terms are signed, then trying to agree fees afterwards.
- Leaving the remuneration package undefined, so the fee basis is open to argument.
- Offering a generous guarantee without tracking which placements are still inside it.
- Keeping signed terms in an email inbox where nobody else on the team can find them.
- Applying different terms to the same client because consultants used different versions.
Keep terms connected to your numbers
Terms of business are not only a legal document. They shape your revenue. Your fee percentage drives the placement fee, your guarantee affects how much of that fee you keep and your payment terms affect cash flow. When those details sit in a filing cabinet, you lose sight of how they play out across clients.
Record the agreed fee basis and guarantee period on each client record, then link every placement back to it. That lets you see GP margin by client, spot clients who regularly negotiate fees down and plan for refund risk in your forecast. Try the placement fee calculator to model fees and margin, and see how to track GP margin per placement for the method.
How Klose Recruit helps
Klose Recruit is all in one recruitment software built in Brisbane by Australian recruiters for boutique and growing agencies. Clients, contacts, jobs and candidates share one database, so every submission is logged against the right client with its date, giving you a clear record of each introduction. Documents and notes sit on the client record where the whole team can find them.
Every plan includes revenue intelligence. Placement fees, GP margin by client and a weighted revenue forecast update live as deals move through the pipeline, alongside more than 30 prebuilt reports and a live sales dashboard. Explore the financial insights or see the recruitment CRM built in Australia. Pricing starts from A$75 per user per month on annual plans, or from A$89 per user per month on monthly plans.
The takeaway
Strong recruitment terms of business define your fee and what it is based on, when it is earned, how long an introduction stays yours, what guarantee you offer and when you get paid. Agree them before the first CV, keep one current version for the whole team and connect the terms to your client records and placements. Do that and your terms stop being a forgotten PDF and start protecting your revenue.