So, you’ve heard about IT contractors and wonder what it would be like to become one? You may be wondering, how do they get paid so much and why do they get hired? Well, there are a few reasons for this. Read on to find out how to be an IT contractor.
What Is an IT Contractor?
First of all, we should clarify what an IT contractor is. An IT contractor is someone who is usually self-employed, and sells their time to a company or client. It’s similar to full time work in that you perform work for a company and get paid for it.
How To Be An IT Contractor
However, the self-employed part is really what makes it different. In most cases, a contractor sets up a business and works on behalf of that business. They would then find clients who are interested or are in need of their skills, and come up with a contract (usually for a particular project or specific length of time) to do the work. Sound a little complicated? It isn’t, really!
Pros of Contracting
If, by now, you’re wondering, “Why would I go to all that effort just to get myself a contract?” Well, there are quite a few reasons.
- More Money – The first one is probably the money. Contractors usually get paid more for their time than permanent company employees. This is because when a company pays for an employee, they don’t just pay for their time, they also have costs for their human resources and any other company perks that may be available. Contractors are usually exempt from this and are able to charge a higher rate.
- Varied Roles – Because a contractor is usually fixed to a project or a specific time period (e.g. six months or twelve months), they move around clients a lot. This means you have less chance of getting “stuck” in one company or one role, which is important for many people. Staying as a permanent employee has a chance of being in the same role for an extended period.
- Separate From The Client – Because you’re a contractor and not a full time employee, you are still separated from the client’s business. This means you don’t need to involve yourself in office dramas or politics – you’ll be moving on at one stage so it doesn’t matter! While you still have to do your job, and do it well, you don’t need to contribute and perform extracurricular activities if they’re not required.
Cons of Contracting
- Inconsistent Pay – One of the main drawbacks of being an IT contractor is that it’s not a consistent paying role. There are times where even the best contractors are in between work. This may be as little as a few days or as much as a few months – or even more! This means that you’ll need to manage your money even better than if you were a full time employee, as contractors only get paid for the work they do.
- No Full Time Benefits – If you work as a contractor, you won’t automatically receive the full time employee benefits of the client or company you’re at. This may include health insurance, gym membership, or superannuation. It also means you don’t get paid annual leave or personal leave. All holidays you take will need to come out of your own unpaid leave. This just means you’ll need to have some money in reserve to supply all of these benefits yourself, if you would like them.
- More Administration – You’re essentially running a business of one person when you become a contractor. This means you’ll need to provide your client with invoices, lodge your business statements and tax returns, and possibly your own superannuation. This may seem daunting for some people, but as it’s a small business it would need to be done.
So, despite the cons mentioned above, there are still some pros for becoming an IT contractor. If it wasn’t worth the effort, people wouldn’t be doing it!
I hope that clears up what an IT contractor is and how to become an IT contractor. I’ll be posting more articles on how to be an IT contractor in the near future – so stay tuned and keep coming back!
(Disclaimer: This article and any points inside do not constitute legal or financial advice. I am not a qualified accountant or legal person. Please seek professional advice for your area to obtain correct and up-to-date information.)
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