Contractors should always be looking out for new opportunities to work in different industries and with different products and services, building up an impressive skill-set that will make them more appealing in the workforce. Many contractors find ingenious ways of putting their skills to use in other fields, allowing them to be more employable and pick up more and more contract-based work. And while this all sounds great, you also have to bear in mind that being a contractor means that you only get paid when your skills are in demand. Temporary shortages in workload can result in not being paid for days or weeks. While the benefits generally outweigh the downsides, it is worth keeping the following in mind:
- No employee benefits:
- Generally contractors do not receive benefits from their employer such as sick pay or overtime.
- You are only paid for what you do:
- As we said before, you only get paid when your skills are in demand. Often you will find yourself with temporary shortages in workload which can result in you not being paid for days or weeks, so it is important to budget accordingly.
- You have to pay your own tax:
- In most traditional employment, companies will deduct tax from your pay so you have nothing to worry about at the end of the year, but for the most part, contractors receive their income with no tax deductions, and therefore you will need to ensure file your income tax returns on time and set aside some money to pay your tax at the end of the year.
While this seems intimidating at first, being a contractor is surprisingly similar to running your own business, and therefore there any many resources out there to help you you out. You will have to plan your time and manage your work and budget extremely carefully, and a calendar and cashbook are often the most useful tools a contractor can have. Calendars normally come pre- installed on any new computer, tablet or mobile phone and with the power of cloud computing, you can access your events and schedule your work from wherever you are.
While there are a number of cashbooks available for individuals and businesses, Capital Planning has developed the SMART Dollars cashbook that has contractors in mind, with web-based technology, you can access your accounts, invoices and even see your statement of position from anywhere at anytime, provided you can connect to the internet, and with our 2 for 1 deal, you get both a home and office cashbook for an easy monthly or annual subscription payment. Best of all, SMART Dollars has a free 30 day trial so you can give it go and see how it will benefit you as a contractor.