Are Internships Paid In Australia?

Interns can be a huge help in a growing business. They can bring fresh ideas, extra hands during busy periods, and sometimes even become your next great hire.

But one question comes up almost immediately for small businesses and startups: are internships paid in Australia?

The short answer is: often, yes. Many arrangements described as “internships” are legally treated as employment, which means the intern must be paid at least the minimum wage (and sometimes more, depending on any applicable award or agreement).

Unpaid internships can exist in Australia, but only in fairly specific situations. If you get this wrong, the risks can be serious - backpay claims, penalties, reputational damage, and a messy distraction from running your business.

Below, we’ll break down how to think about internships from an employer perspective, when you need to pay, when an unpaid placement might be lawful, and the practical steps you can take to set things up properly from day one.

What Counts As An “Internship” In Australia?

In Australia, “internship” isn’t a special legal category on its own. It’s a label people use to describe a range of arrangements, including:

• Work experience (often short-term and observational)
• Vocational placements (typically required as part of a course)
• Entry-level employment that is simply called an “internship”
• Volunteer roles (usually in not-for-profits, charities, community organisations)

So when someone asks whether you get paid for internships, the legal answer usually depends on the true nature of the relationship - not what you call it.

If the arrangement looks and feels like a job, it’s very likely the intern is an employee and must be paid accordingly.

Why Labels Don’t Protect You

It’s common for businesses to advertise an “unpaid internship” intending it to be a learning experience. But if the person is actually doing productive work that benefits your business - especially if they’re performing duties similar to your staff - the law may treat them as an employee.

In other words: calling it an “internship” doesn’t automatically make it unpaid or lawful.

Are Internships Paid? The Key Legal Test For Small Businesses

When working out whether an intern must be paid, a helpful way to approach it is to ask: is this really employment?

Australian workplace laws focus on substance over form. The question isn’t just “are internships paid?” - it’s whether the intern is actually providing their labour as an employee.

Signs Your Intern Is Likely An Employee (And Must Be Paid)

If several of the following apply, there’s a strong chance your intern should be treated as an employee:

• They’re doing real work that contributes to your business outputs (e.g. customer support, marketing execution, coding features, bookkeeping).
• You rely on them to meet deadlines or deliverables.
• They have set hours and are expected to attend like staff members.
• You direct and supervise how they do the work (not just training them).
• You benefit commercially from what they produce.
• The placement runs for weeks/months and looks like a regular role.

If you’re thinking “that sounds like what we need,” that’s not necessarily a problem - it just means you should set it up as employment and pay correctly.

That’s where getting the fundamentals right matters, including a clear Employment Contract and checking your award compliance obligations.

Signs The Placement Is More Like Genuine Work Experience

On the other hand, an arrangement may be more likely to be considered “work experience” (and not employment) where:

• The focus is primarily on learning, observation, and skills development.
• The intern is supernumerary (extra to your workforce - you’re not relying on them to get work done).
• The tasks are closely linked to training objectives (e.g. shadowing, simulated tasks, portfolio development).
• The placement is short and structured.

Even then, you need to be careful. “Experience” can quickly turn into “work” if the intern starts taking on responsibilities that create business value.

When Can An Internship Be Unpaid In Australia?

Unpaid internships are one of the most misunderstood areas for employers. If you’re trying to work out whether an internship can be paid or unpaid, here are the most common lawful pathways.

1. Vocational Placements (Course-Required Placements)

One of the clearest examples where an unpaid placement may be lawful is a vocational placement. Under the Fair Work Act 2009 (Cth), a person doing a “vocational placement” is generally not considered an employee for the purposes of the national workplace relations system (which is why these placements can be unpaid).

In practice, this usually applies where:

• the placement is a required part of an education or training course, and
• it’s arranged through an education provider (often with specific requirements and oversight).

These placements are typically designed as training rather than productive employment.

Even if the placement is unpaid, it’s still important to document expectations and boundaries. Many businesses use a tailored Internship Agreement (or work placement documents) to clearly set out the learning focus, supervision, and duration.

2. Genuine Volunteers (Usually Not For Profit Contexts)

Volunteer arrangements generally belong in the not-for-profit space. If your business is a for-profit company or startup, relying on “volunteers” to help operate the business is a major red flag.

If you’re in a community or charity context and engaging volunteers, you should still be clear on the scope and boundaries through something like a Volunteer Agreement.

3. Very Short, Observational Work Experience

There are situations where a person might do a short period of observation (for example, a student attending for a day or two to understand an industry). The less productive work they do, the more the arrangement looks like genuine work experience.

But if they’re doing hands-on tasks for your business, the risk increases quickly.

A Quick Reality Check For Startups

Startups often move fast and need people who can “just jump in.” That’s exactly why unpaid internships can become risky - it’s easy for an intern to become functionally identical to a junior employee.

If you need consistent help and real deliverables, it’s often safer (and better for culture) to hire them properly and pay them.

What Are The Risks If You Get Internship Pay Wrong?

Misclassifying an intern can create more than just an awkward conversation. It can create legal exposure that hits your cashflow and distracts your leadership team.

Common Risks For Small Businesses

• Backpay claims: you may need to pay wages that should have been paid, potentially with penalties or interest.
• Non-compliance with awards: if an intern is an employee, award rates, penalty rates and other entitlements may apply.
• Record-keeping issues: employment arrangements trigger record and payslip obligations.
• Tax and super risk: depending on the true nature of the arrangement, there may be PAYG withholding and superannuation implications - speak to your accountant or the ATO for advice specific to your circumstances.
• Reputational damage: unpaid internships can attract negative attention, especially in competitive talent markets.

Even where you acted with good intentions, the legal analysis can still land against you if the intern was effectively working as an employee.

“Trial Shifts” And “Probation” Aren’t Workarounds

Some businesses try to frame unpaid work as a “trial” before hiring. While short trials may be lawful in limited situations (for example, to demonstrate skills), a trial that produces value for the business (or runs for more than a very brief, skills-demonstration period) can create wage obligations.

If you want to assess someone before hiring, it’s better to structure it properly and document it clearly - and when in doubt, pay for the time.

How To Set Up An Internship The Right Way (Practical Steps For Employers)

If you want to bring interns into your business while staying compliant, it helps to approach it like any other risk-managed business process: clarify the purpose, document it, and align it with workplace laws.

1. Decide What You Actually Need: Training Experience Or A Junior Team Member?

Start by being honest internally:

• If you need someone to produce work reliably each week, you likely need an employee (paid).
• If you want to provide a structured learning experience with supervision and minimal business reliance, a placement may be possible.

This one decision often answers the core question about whether an internship is paid for your situation. If it’s really a job, treat it as a job.

2. Check Whether An Award Applies

Many employees in Australia are covered by a modern award (depending on their role and your industry). Awards can set:

• minimum pay rates
• penalty rates
• minimum engagement periods
• breaks and allowances

If your intern is an employee, you’ll want to ensure you’ve got the right classification and pay rate - this is where award compliance becomes crucial.

3. Use The Right Agreement (And Don’t Overcomplicate It)

Your paperwork should match the arrangement.

• If the intern is an employee, use an Employment Contract that sets out hours, pay, confidentiality, IP, and key workplace terms.
• If it’s a structured placement, consider an Internship Agreement to set expectations and boundaries.
• If it’s a short observational arrangement, you may use a Work Experience Agreement to document the purpose and avoid confusion about duties.

Clear documentation won’t fix a non-compliant arrangement by itself, but it will help you align expectations and reduce misunderstandings.

4. Be Clear About IP, Confidentiality, And Ownership Of Work Product

This is especially important for startups.

If an intern is helping with:

• code
• designs
• marketing content
• product development
• customer lists

you need to be clear about confidentiality and who owns what they create.

In many cases, these protections sit inside a well-drafted employment or internship agreement. If your intern is not an employee, it’s particularly important to make sure IP and confidentiality terms are properly handled (because the default legal position can be more complicated than people expect).

5. Set The Internship Up As A Genuine Learning Program

If you’re aiming for an unpaid or course-linked placement, treat it like a training program, not a way to fill a gap in your workforce.

Consider putting in place:

• a written learning plan (skills and outcomes)
• a nominated supervisor/mentor
• structured check-ins
• limits on client-facing responsibility
• a clear start and end date

This protects the intern and also supports your position that the arrangement is training-focused.

6. Consider Whether A Casual Or Part-Time Role Is A Better Fit

If your business needs help, but you’re not ready for a full-time hire, a paid casual or part-time arrangement can be a practical middle ground.

It’s often simpler (and safer) to pay someone properly for a smaller number of hours than to try to structure an unpaid arrangement that becomes hard to defend.

Key Takeaways

• Are internships paid in Australia? Many are, because most “internships” are legally treated as employment where the intern must be paid at least the minimum wage (and often award rates apply).
• Unpaid internships can be lawful in limited situations, most commonly as vocational placements required by an education or training course, or short observational work experience.
• If your intern is doing productive work your business benefits from, relying on them like staff, or working regular hours, they may be an employee - meaning unpaid arrangements can create significant legal risk.
• Using the right documentation (like an Employment Contract, Internship Agreement, or Work Experience Agreement) helps align expectations and reduce disputes, but the real-world arrangement still needs to be compliant.
• Startups should be especially careful about IP and confidentiality when interns create code, designs, content, or contribute to product development.

If you’d like help setting up an internship program (or hiring interns as employees) the right way, you can reach Sprintlaw at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.