Considering Going Contracting? Step by Step Guide

There are many reasons why you might consider contracting as a career path. Perhaps you’re looking for more flexibility in your work schedule, or maybe you’re interested in working on a variety of different projects. Whatever your reasons, contracting can be a great way to further your career and earn a good income.

What is Contracting and What are its Benefits over Permanent Employment?

The term ‘contracting’ covers a wide range of working arrangements, from sole traders who work for themselves, to large organisations that use contractors to supplement their in-house team. In the past, contracting was often seen as a stop-gap measure – something you did when you couldn’t find a permanent job. Nowadays, however, an increasing number of people are choosing to contract by choice, as it offers a number of advantages over traditional employment.

Flexibility – One of the biggest attractions of contracting is the flexibility it offers. Contractors have the freedom to choose their own projects and work hours so you can work around other commitments, such as childcare and achieve a better work/life balance

Variety – As a contractor, you’ll have the opportunity to work on a variety of different projects, which can make your work more interesting and enjoyable.

Increased earnings – Contractors usually earn more than permanent employees, as they’re paid for the work they do rather than the number of hours they work

How to Get Started in Contracting and Find Work? 

There are a few things you need to do to get started in contracting:

1. Set up as a self-employed business – If you’re going to be working for yourself, you’ll need to set up as a self-employed business. This is relatively simple and can be easily done online. This is where you may decide to become a Limited Liability Company.
2. Most contractors will earn above $60k per annum, so it is best to set up your GST, either as cash or invoice, reconciled and paid to the IRD every month or 6 months.
3. Get insurance – It’s important to have the right insurance in place as a contractor, as you could be liable for any damage you cause to your client’s property or equipment. Minimum insurance in New Zealand is 1m but some clients will ask for 5 million.
4. Find work – The next step is to start looking for work. There are a number of ways to find contracting opportunities, such as online job boards, NECTA and contact companies directly.

Different Types of Contracts available:

There are two main types of contracting arrangement – short-term contracts and long-term contracts.

Short-Term Contracts – Short-term contracts are typically for a period of three months or less. These types of contract are often used to cover maternity leave, sickness absence or to fill a skills gap within an organisation.

Long-Term Contracts – Long-term contracts are usually for a period of six months or more. These types of contract are often used to deliver specific projects or to cover an ongoing need within an organisation.

Tips for Staying Successful in Contracting.

1. Get Organised – As a contractor, you’ll need to be very organised and self-disciplined. This means keeping on top of your finances, managing your time effectively and meeting deadlines.
2. Build a good reputation – It’s important to build a good reputation as a contractor, as this will make it easier to find work. Make sure you complete your projects on time and to a high standard.
3. Stay up to date – Contracting is a fast-paced industry, so it’s important to keep up with the latest changes. This means staying abreast of new legislation and developments in your field.
4. Network – Networking is a great way to find new contracting opportunities. Attend industry events, join professional organisations and make sure your details are listed on online directories.
5. Manage your finances – As a contractor, you’ll need to manage your own finances, including invoicing clients and paying taxes. It’s important to keep on top of your finances and stay organised.
6. Get great testimonials. You are only as good as your last contract. Do not treat contracting like you would treat a permanent position, many contractors’ careers have come to an end with one bad testimonial.

This guide has been put together to help you understand what contracting is, the different types of contracts available and the steps you need to take to successfully set yourself up as a Contractor. If you’re thinking of going contracting, make sure you do your research and prepare properly to give yourself the best chance of success!

Remember Necta not only helps you with your profile and CV by setting up specific sections that people are looking for, but we also ensure you are fully insured and can pay with all taxes deducted, simplifying your entire contracting experience. Why not sign up here?