The concept of contracting has recently generated a large amount of buzz. With the ongoing conversation around the ‘gig economy’ in Ireland hitting the headlines on a regular basis, contracting in particular seems to have sparked debate.
So, is contracting really about setting your own hours, endless ‘long lunches’ and working in your pyjamas from the comfort of your sofa?
In this blog, we’ll be clearing up common questions to ultimately determine what it means to be a contractor as well as exploring 3 key reasons why people are turning to contracting as a viable means of earning an income.
Thinking of contracting in Ireland? Click here to find out more.
What exactly is contracting?
A professional service contractor is responsible for providing services on an independent basis to businesses. Whether you work in sectors as diverse as technology or construction, contracting is an increasingly popular solution to applying your skills and earning an income.
Some contractors have a roster of clients spread over an area whereas others work for one client at a time, moving from project to project. Contractors tend to operate on an hourly, daily or fixed fee basis, with potential for bonuses and success fees also to be taken into account.
Contracting involves a large amount of tenacity, self-determination and decisiveness – the very best contractors set clear objectives to measure their success and feel comfortable in leadership roles.
So, why do people go into contracting?
Although the circumstances of an individual play a huge part in career decisions, more money, flexibility and vast opportunities are but some of the fantastic benefits associated with contracting. Here are 3 key reasons:
1. Generous Pay:
Contracting can have real and appealing financial benefits. When taking into account the level of tax payable using tax tables, more often than not they show that contractors tend to earn more when compared to permanent employees. If necessary skills are in short supply or projects need to complete at short notice, contracting rates can be increased to reflect this. Employers can also be willing to pay contractors more for these expert skills if on a flexible, temporary basis. Another bonus for greater daily rates for contractors comes from employers benefiting from savings made on costs such as holiday pay.
Earnings can also be boosted using a contractor specialist tax advisor or Umbrella Company like Fenero. We’ll help you maximise tax benefits and other rewards that are often not clearly highlighted to contractors. These tax benefits help boost earnings.
2. Deciding Your Own Destiny:
Working in the contracting industry has ‘being your own boss’ at its core. This is an attractive prospect to many people and this freedom afforded by the flexible contracting lifestyle can open up new and exciting opportunities for business and personal growth. Long periods between contracts can also pose opportunities for further education and travel – a benefit exclusive to contracting when compared to limited annual leave for those in other means of employment.
For contractors, there is more independence when it comes to your respective industry and working environments. It’s easy to surround yourself with forward thinking and like-minded individuals or work remotely to suit your own preferences and circumstances.
3. Expanding Your Knowledge:
Contracting provides various personal development opportunities. People who can adapt to new methods efficiently often find success in the contracting industry and quickly become experts in their field. Through gained experience, as well as enhanced practical and business skills, the confidence to work on new and exciting projects can become a reality.
Although contracting may seem demanding, for the right person, it can be a highly rewarding way to work. Along with the benefits of frequent up-skilling and self-teaching, working for different organisations allows contractors to gain exposure to new software and systems – all of which is appealing to those with a desire to learn and progress, needless to mention prospective employers too, regardless of industry.
Still not sure? Read our post on the pros and cons of contracting.
Working as a contractor, involves managing your own tax affairs, which can be a daunting and confusing process. It’s also important to know the rules and regulations of the Irish taxation system.
Registering with an umbrella company like Fenero will make the financial side of things much easier for you. We lift the administrative burden for you by taking care of the accountancy and taxation and aspects so you can focus your attention where it matters most - on your own projects.