Contractor Ngā kaikirimana

Being a contractor has similarities and differences to being in a salaried job. You’ll need to think things through before you decide to go contracting. First, understand your own reasons for wanting to be a contractor. Then, think about how you would approach:

• handling gaps in contracts
• entering different work cultures
• managing set-up costs
• juggling more than one contract
• setting an hourly rate
• being a sole trader or forming a company.

For peace of mind and to have cash flow for the quiet times:

• set up a separate business bank account
• record your hours
• invoice regularly
• keep track of who has paid
• build a buffer of 3 months income
• set money aside for tax and ACC.

As a contractor, you’re self-employed and choose what work you do and sometimes where you do it. Some contracts may be very short and others much longer. You’ll need to:

• know how to look for new contracts
• be flexible
• be an expert at what you do
• have excellent records and systems.

Contractors need to plan for busy and quiet times. You’re also responsible for paying your own tax, ACC, and other expenses. You’ll need to factor in covering KiwiSaver, sick leave, holiday pay, transportation, and other cost of living expenses.

Things to watch out for

Check each contract before you sign and get legal advice if you don’t understand anything. 

Your contract is legally binding and sets out the work you’ll do and how you’ll be paid. It also covers things like hours, expenses, health and safety, disputes, and any work restrictions. 

You’ll need a new contract or a variation if things change.