A Different Way of Working

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A Different Way of Working

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Many businesses throughout New Zealand and the world are adopting more flexible employment methods in order to save time and more importantly, money. With many businesses using cloud- based software and services to enhance their workflow and increase productivity, it’s no wonder so many are also choosing to move to more modern forms of employment, giving rise to a new type of worker — the independent contractor.

Independent contractors are people who operate by themselves on a contract basis rather than as a regular employee, and are hired by a company for small and specific projects or tasks. This style of work that is especially common within startups businesses and tech companies, including us here at Capital Planning. A contractor might stay with a company for many months, or just just a few weeks depending on the work they are assigned. They typically work less hours at a company than traditional employees, as they are just there to complete a small number of tasks before they leave that company. Many contractors move between companies and often choose to work for multiple companies part-time which gives even greater flexibility and often a better work-life balance.

Contractor

So why are there so many people choosing to work almost solely on a contract basis? Well, it mainly comes down to the freedom and independence you have when working as a contractor, with a number of other benefits:

  • Being your own boss:
    • With contract-based work you have a lot more independence in how you work and most of the time can choose whether you take on a task or not.
  • Having a better work-life balance:
    • Contractors generally are less involved with the day-to-day operations of a company, which means less meetings and less admin. Often, you are able to work remotely from the comfort of your home or a downtown café, and can work the hours that suit you best.
  • Explore different ways to apply your skills:
    • While contractors generally have a specific set of skills, these are usually easily transferrable, so you can apply the same skills in new and exciting ways depending on the contract or company you are working for.
  • Earn more money:
    • Contractors get paid for every hour of work they do, which means you can work as much as you like during a week to get tasks done and be paid at the market rate for every one of those hours.

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.

SMART Dollars

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2017-08-07T14:25:21+00:00