A guide to contracting jobs

How do contracting jobs work?

Contractors are typically paid on a pro-rata basis through a firm’s payroll. This can be on a fixed term basis, or on a rolling contract. Companies use contractors in a number of scenarios, such as busy periods, special projects or when they are assessing them for a potential permanent role

While temps are usually paid by the hour without the perks of their permanent counterparts, contractors will often have the same benefits and holiday entitlement as permanent employees. Contractors normally appreciate the flexibility and breadth of experience that contract jobs can offer them.

The benefits of contracting jobs include and are not limited to:

Financial benefits

• Contractors often get paid higher rates as employers are paying for their flexibility. Average salaries can be 1-3X that of a permanent employee. There are also many tax benefits to working as a contractor.
• You will often be paid on an hourly basis with high overtime rates.
• You can offset all of your business expenses against your income to further reduce your tax bill.
• You have more flexibility to negotiate pay rates and conditions.

Flexibility

• Contractors can organise their work around their personal lives and are not tied to a rigorous schedule. With no hard and fast rules or timetables, contracts are typically based on the completion of a particular task within a timeframe.
• Far more professional freedom. Contractors can pick and choose assignments and move between roles which suit their professional agenda and development plan.
• Contracting is ideal if you have a family or young children as you can work around parenting duties and school hours.
• Changing contract is often easier than changing jobs.
• The company you work for is not your employer, but is instead your client.
• Skills development.
• Working in a variety of businesses will broaden your skill set and knowledge.
• You will have more opportunities to experience different industries.
• Your confidence will grow as you deal with a number of employers, managers and colleagues.
• Contractors often have a very extensive CV with a strong list of references.

Skills and knowledge

• Contractors work on different projects, utilising different skills and can build a wide list of professional contacts in a relatively short period of time.
• Working for different organisations gives you the ability to advance your career without being limited by a single employer’s processes, procedures or business ethos.
• There is sometimes room for contract work to become permanent.
• Opportunities to work abroad are increased and are easier to access.
• Contracting can provide constant stimulation for people who enjoy a diverse working life.

• Cost saving. Although contractors earn a higher basic wage a company can still save on associated costs such as holiday pay and national insurance.
• Quick hiring process. Skilled contractors can be recruited in a matter of days, saving time and money and allowing projects to be started immediately. 
• Easy access to wide array of skill sets. Having access to the contractor market means that companies can hire short term solutions for a wide array of projects - in-house skills need not be a barrier to achieving business goals