ADVICE FOR CONTRACTORS AND TEMPORARY EMPLOYEES

The main difference between a contractor and a temporary employee is that a contractor is self-employed and is therefore responsible for their own tax, they will not get holiday or sick pay, and they may be liable for GST. With a temporary employee, the employer will normally be responsible for deducting PAYE tax from their wages, and paying it to the IRD.

It is important to know whether you are employed or self-employed/independent contractor, because the tax and Accident Compensation laws treat the two groups of people differently. Visit http://www.ird.govt.nz/screenprodindustry/contractors.html for guidelines that will help you if your situation is unclear.

Contracting can give you very useful experience, independence, and a great lifestyle, but it does have its ups and downs.

Experienced, capable people are always in short supply. To be a successful contractor one needs to have the qualifications and experience so they can hit the ground running - which is pertinent to getting repeat contract work.

Before becoming a contractor, you have to decide whether contracting is right for you.

A good contractor will have solid demonstrated technical skills; good business knowledge and experience; skills that are in demand in the marketplace; and excellent interpersonal skills and work ethic.

Contracting can be fun, lucrative and interesting. It can also be scary, worrying and stressful, and is not something to be entered into lightly. A really helpful publication is the IT Contractors Handbook that is published each year by IDG Communications who are located at Level 8, 246 Queen Street, Auckland.

This publication will tell you what you need to know and do to become a successful contractor; how to organise and manage your contracting career, and give you some close-up glimpses of the contracting life; as well as:

• Up to date IT market information.
  
• The pros and cons of contracting.
  
• First steps in your own business and the trip wires to watch out for.
  
• Going direct, and/or finding an agent.
  
• Things to do in between contracts.
  
• Financial matters including IRD matters.
  
• Professional services you can hire to make your job easier.
  
• Working overseas.
  
• Available resources for contractors.
  

With these issues discussed you can honestly assess your own credentials and make a decision one way or the other.

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