Advice for contractors
There is a difference between being a contractor and being a temporary employee.
As a contractor, you are self-employed and responsible for your own tax. You won’t get holiday or sick pay and you may be liable for GST.
As a temporary employee, your employer will normally be responsible for deducting PAYE tax from your wages and paying it to the IRD.
It is important that you know whether you are employed or a self-employed contractor. This is because the tax and Accident Compensation (ACC) laws treat the two groups differently. If you are unclear about your status, visit Inland Revenue Department for guidelines.
Contracting can give you useful experience, independence and a great lifestyle, but there are downsides. So, before becoming a contractor, you must decide whether it’s right for you.
Experienced, capable people are always in short supply, so long as there is market demand for what you do.
But it takes more than that. To be a successful contractor you need the qualifications and experience to hit the ground running — which is essential for getting repeat contract work. You must also have demonstrable technical skills, good business knowledge and experience, excellent interpersonal skills and a good work ethic.