How long can a non-compete be in Australia?

There is no fixed limit, and no duration that is automatically safe. A restraint is enforceable only so far as it is reasonable to protect a legitimate business interest, and the same clause can be treated very differently depending on which state's law applies.

What the law says

Australia has no statute setting a maximum length for a non-compete. The starting position comes from the common law doctrine of restraint of trade, and it is stricter than most employers expect. A restraint on a former employee is void unless the employer can show it is reasonable. The burden sits with the party trying to enforce it.

Reasonableness is assessed on three fronts at once. How long the restraint runs. How wide an area it covers. How much activity it prohibits. A court looks at all three together, so a clause that overreaches on any one of them can pull the others down with it.

The interest being protected also has to be legitimate. Confidential information, trade secrets and genuine customer connection all qualify. Stopping someone competing because competition is inconvenient does not. That is the thing the doctrine exists to prevent.

Then the state matters. New South Wales is the exception. Under the Restraints of Trade Act 1976 (NSW) s 4(3), a court can read an unreasonable restraint down to something reasonable rather than striking it out. In Victoria, Queensland and Western Australia there is no equivalent provision, and a restraint that goes too far is more likely to fail entirely.

That single difference changes how the same clause behaves. A drafter working to New South Wales law can afford to be ambitious, knowing a court may narrow the clause. The identical wording in a Melbourne contract carries a real risk of leaving the employer with nothing at all.

The part people get wrong

"Non-competes are banned in Australia."

They are not. A ban for workers earning below the high income threshold was announced in the 2025-26 Budget. Treasury consultation closed on 5 September 2025. No Bill has been introduced, and the reform is proposed to take effect from 2027 following consultation and the passage of legislation.

That distinction matters commercially in both directions. An employer who assumes the ban is already law may drop a restraint they are still entitled to use. An employee who assumes the same may leave believing they are free to compete when the clause in front of them still applies.

"Twelve months is standard, so twelve months is safe."

Standard and enforceable are different questions. A duration being common in an industry is one input into reasonableness, not an answer to it. The role, the seniority and the actual access to confidential information all bear on what can be defended.

"The clause is in the contract, so it works."

A restraint is only as good as its reasonableness on the day it is tested. That day is usually an urgent court application, months or years after signing, and the clause is read then rather than when it was drafted.

What it means for your contract

Cascading restraints - a clause offering 12 months, then 6, then 3, with a series of narrowing areas - are common in Australian contracts precisely because of the risk of total failure. Whether a cascade survives depends on how it is drafted and, again, on which state's law governs the agreement.

If your contract carries a restraint, these are the questions the law asks:

• What legitimate interest is being protected?

• Is the duration proportionate to that interest?

• Is the geographic area connected to where the business actually operates?

• Does the restricted activity match what the person actually did?

Contractam reads restraint clauses against the law that governs them, including the New South Wales read-down provision. Where a restraint is too wide, the rewritten version is drafted to be defensible, never described as enforceable, because no engine can promise how a court will read a clause.

Frequently asked questions

How long can a non-compete be in Australia?

There is no fixed maximum. A restraint is enforceable only so far as it is reasonable to protect a legitimate business interest, judged on its duration, its geographic area and the activity it prohibits, all together.

Are non-competes banned in Australia?

No. A ban for workers earning below the high income threshold was announced in the 2025-26 Budget and Treasury consultation closed on 5 September 2025, but no Bill has been introduced. The reform is proposed to take effect from 2027, following consultation and the passage of legislation.

Is a 12-month non-compete enforceable?

Not automatically. A duration being common in an industry is one input into reasonableness, not an answer to it. The role, the seniority and the person's actual access to confidential information all bear on what can be defended.

Does it matter which state's law governs the contract?

Yes. Under s 4(3) of the Restraints of Trade Act 1976 (NSW), a court can read an unreasonable restraint down to something reasonable. Victoria, Queensland and Western Australia have no equivalent provision, so a restraint that goes too far is more likely to fail entirely.