• Are paid a regular set salary, often without any overtime.
• Have their tax (PAYE), ACC levies, student loan deductions calculated by their employer and automatically deducted from their pay.
• Are entitled to KiwiSaver employer contributions if they contribute to KiwiSaver.
• Entitled to paid holiday and sick leave.

• Are paid an hourly or daily rate on contract assignments of normally between 3 months and 1 year in length.
• Are self-employed and therefore need to calculate and pay their own tax, ACC levies, and file GST returns if registered for GST.
• Do not receive KiwiSaver employer contributions.
• Are not paid for any days they do not work (i.e. if sick or on holiday).

Better work/life balance

As contractors are self-employed and their own boss they can often choose when and where they work. Contractors can therefore take extended holidays for as long as they wish between contract assignments.

Potential to earn more money 

Contractors are often paid significantly more than permanent employees, especially if their skills are in high demand.

Further, many contract assignments are paid for all hours worked unlike salaried employees.

Contracting can also be more tax advantageous in some situations.

Flexibility to try new organisations or industries

Contractors change organisations and industries on a regular basis, which provides stimulation and the experience to learn new ways of working and/or technology. The more flexible your attitude towards organisations and type of work, the easier it will be to find interesting contract assignments and continuity of work.

Improved marketability

Contractors can be more marketable due to their exposure to a wide range of organisations, processes, and technologies, or by building up subject matter expertise in a particular field or industry.

Increase personal and professional networks

As contractors work often at different organisations, they meet and interact with a wide range of people and significantly increase their personal and professional networks.

Job and financial insecurity

Contract assignments are for a set length of time, often between 3 months and 1 year, after which the contractor needs to look for a new assignment which may, or may not, be easy to find depending on the market.

Contractors also need ensure they are financially secure to get through periods between contract assignments.

Paperwork and administration

Contractors must keep good records of all their income and expenses so they can account for their tax and other business requirements.

Lack of professional development

There is usually no in-house training provided to contractors. Contractors therefore need to look after their own professional development and ensure they keep their skills up to date to be more marketable for new assignments.

You aren’t paid for any days you don’t work 

Contractors are not paid for any days they don’t work such as public holidays, holidays, or days when they are sick.

Adaptable to change

Contractors must be adaptable to new environments, people, and technology as they move from assignment to assignment. They need to self-starters who can fit into new teams, accommodate streams of new projects, and hit the ground running.

Can be sued

As a contractor you can be sued for damaging someone’s property or reputation or making a professional mistake such as giving bad advice. This risk can however be mitigated with appropriate insurances.