The Path To Becoming An Independent Contractor
There are plenty of benefits associated with becoming an independent contractor. You’ll be able to choose your own work hours, as well as your rates. Sometimes, businesses hire contractors who are independent to work on their bigger projects. You can find part time or even full time work on their projects.
Who Is An Independent Contractor?
An independent contractor is self-employed and provides services to various clients after marketing their services. The kind of work they do can be known as contracting, or sometimes subcontracting as well. Many individuals working as independent contractors end up becoming sole traders. They get an Australian Business Number for their contracting business and work as independent contractors.
You can also choose other business structures for your independent contracting business, such as a partnership or a trust.
The Advantages Of Being Independent Contractors
There are numerous benefits individuals can get by working as independent contractors in Australia.
- You’ll be your very own boss. You can opt for the place and time of work, and the projects of jobs you work on.
- What you charge customers will depend on your skill level, as well as experience. Your hourly rate can also be dependent on other factors, such as whether you’re working on a difficult project, or doing work that you got last minute.
- You could enjoy flexibility and manage your professional and personal life well. Should you need to take a few days off, then you can. There is no restriction on how many days or how many hours you work during the week. Managing work-life balance becomes easier when you’re an independent contractor.
How Is Working As An Independent Contractor Different From Working As A Full Time Employee?
There are numerous differences between full time employees and independent contractors. An employee gets a regular salary, while you’ll only be earning for the work that you do. When you have a steady stream of work, this means that you’ll be able to earn well. But when business is slow, your earnings might be affected.
Additionally, you won’t have access to benefits like health insurance. You would also require paying your income taxes annually. If you’re paying off student loans, then the amount you need to pay won’t be automatically deducted from your salary. If you were an employee, then the amount would be automatically deducted from your salary. An employee can get holiday pay and enjoy sick leaves as well.
An independent contractor can’t get holiday pay, and if you choose to take sick leave, you won’t be earning that day. Independent contractors are also classified as self-employed.
Consider investing in contractor insurance as well. Working as independent contractors can expose people to certain career risks. An unhappy client could sue you and take you to Court. When you have contractor insurance, you gain financial coverage that can help you protect your career and your business. For more information about contractor insurance, then click here.
What Are The Different Kinds Of Contracting Jobs That You Can Do?
There are several kinds of contractors, and independent contractors can opt to master one or more of these areas.
Trade Contracting
You’ll be working only on specific parts of bigger projects. The kind of projects that you’ll be working on typically involve construction and renovation. You’ll be working as a subcontractor for the firm that’s responsible for delivering the project.
Management Contracting
If you like being in charge of projects, then working in management contracting could be perfect for you. To be a management contractor, you’ll need to first have experience in working as a contractor. Then, you’ll be able to manage others working on the kinds of projects you have experience working in.
You’ll probably be hired right at the beginning of the work process, and you’ll be expected to use your expertise to help the project finish smoothly.
Prime Contracting
Another name for this kind of contractor is a general contractor. As a general contractor, you’ll be managing the entire project. You’ll be working on the project from the beginning to the end, helping to ensure that the client’s objectives are met.
Work Package Contracting
You’ll be responsible for working on only certain areas of the project, focusing on maintenance work. Different contracting models can be used in different projects. As a contractor of work packages, you’ll either be hired by a maintenance contractor, or by a project manager.
There are other kinds of contracting work that you can do as well. You can work on designing and building, or choose to exclusively work as a subcontractor.
Conclusion
If you love working flexible schedules and choosing your work projects, then consider working as an independent contractor. While you won’t get a fixed salary, you can work on various kinds of projects and get regular work. This guide explores who independent contractors are, and why you should become one.
