Choosing to become a contractor can be a big decision. It does, however, come with some amazing rewards. For those who are considering this as their next step, it can be reassuring to know what the road to contracting looks like. There are plenty of contract roles, especially in the technology, transformation, and digital space, but there are some factors to consider before you start.
Find Your WHY!
To quote Simon Sinek, you need to "find your why". Why are you motivated to get into contracting? It’s a very good question to ask because there are so many reasons. Contractors get to pick their projects so there is always interesting work on the table. You can choose where and when you work and there are some amazing cultural and financial benefits, too. You can be the fresh eyes and respected voice in an organisation. Just get in, do the work, and go back to spending time with the family, outdoors, or whatever makes you happy!
Another thing to consider is career progression. When you are good at what you do, employers can ask you to stay in your role for the long term. Unfortunately, that means that you don’t grow much.
By contracting you can learn and grow, and make sure that you get exceptional experience to move you in the direction you want to go: Up!
Whatever your why, it needs to be the motivation you turn to when times get challenging. And they will, but the payoffs can be phenomenal too.
Contractor Set Up – Tax & Legal
If you intend to earn over $60k as a contractor, all you need to do is register as a sole trader with IRD. You can also set yourself up with a New Zealand Business Number, which is a unique identifier and using it will speed up your interactions with IRD.
Find yourself an awesome accountant who charges monthly if you aren’t too great with tax and legal stuff. That way, you can stay on top of everything and not have a huge bill you weren’t prepared for. If you want to know more you can check out how to become a sole trader here.
If you want something simpler, you can try Hnry. It is a brilliant, easy-to-use platform that pays and files tax returns for sole traders. Also, it's always best to have insurance to cover your work, any good broker would tell you.
One of the great things about working with Beyond Recruitment is that we cover our contractors' insurance. It's an expense you don’t need to cover when you work with us!
How Much to Charge as a Contractor
The financial benefits of becoming a contractor can be amazing, with earnings of up to $1,400 a day if you are at the top of your game! There are still some pitfalls to consider.
The first thing to keep in mind is that the charge-out process does take a little while when you first start, so it’s smart to be prepared with some savings to last you through two months. As you can imagine, it takes some time to bill each of the parties.
Secondly, the age-old question is how much do you charge for your skillset? The difficulty is that even if two people had the same education with the same number of years of experience at the same job, you may have picked up different skill sets. We all learn in our own way.
It's always a good question to reach out to a professional recruiter for advice, however, we do have a Beyond Recruitment rule of thumb that might help. Take your base salary and add 35%. Divide that by 12 months and then by 160 hours. So, for example, you currently earn $85,000.
Rule of Thumb*
•$85,000 X 1.35 = $114,750p/a.
•$114,750 / 12 = $9,562.50
•$9,562.50 / 160 = $59.70 – round it up to $60/hour.
(*make sure you check in with your contact at Beyond Recruitment as everyone is different)
Getting the Gig
This part is easy because right now, there are plenty of jobs – especially in technology, transformation and digital. All you need to do is give us a call and share your CV. Together, we can help you to plan what roles would suit you the best.
There are plenty of roles for BA’s, Project Managers, Project Coordinators and Developers, and usually to the end of the year, Testers – and that’s just in the tech space in New Zealand. All you need to do is reach out and we can have a good chat with you about where to next. Give us a call or email today.