Offset Clause in Employment Contracts

What is an offset clause in employment contracts? 

An offset clause is a provision in an employment contract that allows an employer to pay an employee a higher salary or wage in exchange for not paying certain entitlements that are normally required by law or a Modern Award. These can include overtime, penalty rates, allowances and annual leave loading as examples.  

Offset clauses can be useful for Employers who want to simplify their payroll process or who want to offer their Employees a higher salary without having to pay additional entitlements. However, there are a number of things that Employers need to be aware of before using an offset clause.

What do Employers need to look out for when using an offset clause? 

Employers who are considering using an offset clause should seek advice to ensure that the clause is valid and enforceable. 

Additional tips for employers who use offset clauses

By following these tips, Employers can help to ensure that offset clauses are used in a fair and compliant way. 

Additional things to consider when using an offset clause in employment contracts


Overall, offset clauses can be a useful tool for Employers. However, it is important to use them carefully and in accordance with the law.

By following the tips above, Employers can help to ensure that offset clauses are used in a fair and compliant way. We can help ensuring that the offset clauses you which to provide are compliant or if you have used them in the past continue to remain compliant. Need help? Contact our team now or email [email protected].

Book A Free Consultation