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Contracting – is it for you?

If you're thinking of taking up contracting work - then this short guide to contracting will help. We look at the advantages, the potential pitfalls and all the other stuff you need to know about contracting in NZ.

There are many different paths you can take during your career to upskill and challenge yourself, to become the professional you want to be. This journey can be one of up, down, sideways, backwards, and sling shot! One of the many decisions (that can be tricky to make) is whether to work on a contract basis, or as an employee.

Once you have a few years of experience under your belt, you can become quite specialised in your field. This is also where your identity, values, and job expectations become further defined.

There are many reasons why you may feel like a change, from workplace values that don’t align with yours anymore to expectations that are not reasonable. Or you might want to keep doing the work you’re doing now, but also branch out and do other, more exciting things.

Contracting can help you to distribute your eggs into more baskets than one and can be a great way to stay interested and engaged in your field of work. It will probably mean that you will push yourself to upskill, keep on learning and moving forward in your career.

There are many joys of contracting – many contractors love the flexibility and variety this type of employment offers. Often, depending on your contract, you can choose your hours and your remote working conditions to suit your lifestyle.

However, contracting does come with a risk. There’s not as much job security or guarantee of income as with a permanent position. When things get tight, contractors are the easiest to ‘turn off’. But with greater risk comes greater reward. Contractors can often charge more for their services than a permanent employee gets paid.

Let’s delve into this way of working a bit more, so you can make an educated decision on whether contracting is for you!

IT contractor working from home.
Image: Annie Spratt


Contracting may appeal to you for several reasons. This way of working offers a variety of benefits that work better for certain people.

Being paid for every hour:

You might be a well experienced individual who offers a quality service or skillset. If this service is in demand, contracting gives you the opportunity to be paid more for your services, while building a solid reputation as a trustworthy service provider.

If you’ve worked as a permanent employee, you’ll know the pain of working overtime and not being paid any extra for this. This is where contracting provides another benefit; you can charge for every hour you’ve spent on the job!

Life / Work Balance:

It’s a constant battle trying to balance work and life – working alongside a set roster can sometimes interfere with our personal life and we may sacrifice our hobbies and family time to meet our work schedule.

As a contractor, you get to choose when you get your work done and set expectations with your clients from the get-go. This provides a better work life balance and more time to fit in the other things in your life that you value. Go on, book in that pottery or knife-making class at 12pm on a Tuesday!

Diversity and Variety:

As a contractor you get to experience a range of different industries, companies, and people, all with different work cultures and values. This variety will teach you more about your own work values, and help you find the right avenue to work in.

The simple difference of choosing to work for someone, rather than having to, also makes for a more positive work experience and creates higher levels of job satisfaction.


It’s been a rough few years since Covid-19 showed up and shook our world. This new way of living has showed most companies that remote working is efficient and cost effective and there’s been a steady demand for contractors, remote or on-site.

Hiring a contractor saves a company money on permanent employee costs such as KiwiSaver, training and development initiatives and benefits such as paid leave. A remote contractor is even more cost effective as it saves a company the costs of having someone on site.

Contractors also allows employees to find the services they need at the time and help them to act on their feet in a constantly developing market.

But while the demand is high right now, the risk of contracting is that this demand can fizzle in a heartbeat. Contractors do have to contend with the fact that if times get even tougher, they are usually the first to go. Contractors need to have a good client base or a great recruitment team behind them to help them secure new roles in uncertain times.


There’s no guarantee:

Alongside the chance to earn more money as a contractor, comes the uncertainty of work. Contracts are usually between 3-6 months long at a time, which means you have less job security than a permanent employee. If a company decides to restructure or cut costs, contractors are usually the first to go. This also means there can be inconsistency with your income; you might have to go weeks without work, so you’ll need to be smart with your budgeting.

No company benefits or training:

As a contractor, you won’t have access to workplace training initiatives. So, if you need to upskill or get training to deliver the services in demand, you will have to do it in your own (unpaid) time and pay for it yourself.

Death and Taxes:

No, being a contractor isn’t going to kill you! But you do have the other certainty in life to contend with – taxes.

As a contractor you will need to allocate time and energy for your own accounting admin. Managing your taxes and keeping record of your income and spending are tasks that you need to do outside of your chargeable time. If you contract through us we will guide you to get you sorted, or you can ask other contractors which tools or accountants they find helpful.

A constant finger on the pulse:

Given the short-term nature of contracts, you’ll have to keep a constant eye out for the next job opportunity, which again demands your time, energy, and patience.

If you have a relationship with a kick-ass recruitment agency, hint, hint, you can let us carry some of this responsibility in finding you work opportunities while you get on with your existing job!


In a nutshell, here’s a few of the main differences between working as a contractor, to working as a permanent employee:

  1. Contract for Services

As an employee, you must have a contract for services, also known as your ‘Employment Agreement’. A contractor has the option to have a contract for services, this is normally referred to as an ‘Independent Contractor Agreement’.

  1. Income

A contractor can charge a client for their work, based on an agreed hourly rate or quote, set out by the contractor. This typically doesn’t extend more than six months but can be shorter or longer. An employee is paid their wage or salary on the agreed working days only and must be paid at least minimum wage.

  1. Tax Responsibility

A contractor is obligated to paying the tax on their income, as well as GST return, ACC levies, any student loan repayments, and KiwiSaver payments. Alternatively, an employer is responsible for all this admin on your behalf if you work as an employee.

  1. Leave

An employee is eligible to be paid for leave, including sick leave, bereavement leave, public holidays and annual leave. A contractor does not get paid for any of this leave.


IT is a highly in-demand service and always will be. We live in a world that heavily relies on technology, especially in the workplace. As per our previous blogs, we know that not only is there a skills shortage in the IT Industry, it’s also one of the most highly paid sectors in New Zealand.

This high demand for IT skills makes it an ideal time for techs to switch over to contracting, as many have done over the last few years.

One of the great perks of contracting is its flexibility and variety – from a range of clients to how you want to work. Given pretty much every industry relies on technology to function, a lot of IT contractors find that they can pick and choose their clients. They also value the experience they gain from the variety of work cultures, values, and professional connections they make.

Additionally, if an IT contractor doesn’t want to be working over the summer holidays – they don’t have to! You will be your own boss, and choose what time you spend on work, and what time you spend on a boat or at the bach with your family.

The variety of industries, clients, and work that a contractor can choose from provides the scope for ongoing change and challenges in your work. If you feel like you’re constantly trapped in the daily mundane tasks, contracting offers a fresh opportunity to take your fate into your own hands.

Choose your training and direction! As the IT industry constantly shifts and evolves, it opens up many different pathways you can work towards as an IT professional.

Contractors get full say over their entire working life, which includes their services, skills, and training direction. If an IT contractor sees an increase in demand of a particular IT service, they can decide to upskill in that area. There are no ifs, cans, or buts about it – as a contractor you dictate your IT career path.

If you are an IT passionate individual reading this, and would like to know more about contracting, employment, or what opportunities are out there waiting for you – give us a call. We’re happy to help you figure out the direction you’d like to take, in order to make the most out of your career, and let IT benefit you!

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