Independent Contracting in NZ
Independent contracting is quite different from being a permanent employee, fixed-term employee or temp. There are a few things to understand, but don’t worry, we’re here to help make the process as straightforward as possible.
How does independent contracting work?
As an independent contractor, you’re generally operating under commercial/civil law rather than employment law. You’ll be engaged through a contractor agreement to provide your services for a specific project or assignment, typically ranging from around 6 weeks to 12 months.
You’ll be paid an agreed gross hourly or daily rate for the services you provide. From there, you’re responsible for managing your own financial obligations.
Put simply: if you’re working, you’re getting paid. If you’re not working, you’re not getting paid.
As an independent contractor, you’ll usually be responsible for things such as:
Income tax
GST, where applicable
ACC levies
KiwiSaver contributions, if you choose to make them
Professional indemnity insurance, where required
The good news is you don’t need to navigate all of this on your own. A good accountant can help, or services such as Hnry (www.hnry.co.nz) can make managing your tax and contractor obligations much easier.
Leave and holidays
Because you’re an independent contractor rather than an employee, you generally won’t receive paid:
Sick leave
Annual leave
Public/statutory holidays
It’s worth keeping this in mind when considering your contracting rate and planning your finances.
Timesheets and payment
Your working hours or days will be recorded and approved through a digital timesheet system.
Payments will then be made in accordance with the contractor agreement you enter into, including the agreed rate, payment terms and contract dates.
Why consider contracting?
Independent contracting can be rewarding both professionally and financially. It can give you the opportunity to:
Experience different organisations and industries
Put your professional skills to work on specific projects
Build your professional network
Focus on delivering a defined piece of work
Experience less organisational politics
Potentially earn a higher rate than equivalent permanent roles
Enjoy greater variety and flexibility in your career
Contracting isn’t for everyone, but for many people it can be an excellent way to build experience, broaden their networks and enjoy more flexibility in how they work.
If you have any questions about independent contracting, rates, agreements or how the process works, have a chat with your Find Consultant, we’re here to help.