Being an independent contractor has become one of the most popular employment options in Australia and around the globe. As a matter of fact, of over 12 million employed people in Australia, in 2018, over 8% were independent contractors. So, what makes being a contractor so appealing? Here are some pros and cons you should consider before becoming one:
Contractors usually get paid on an hourly basis, making it easier to earn more in the long run. On the other hand, employees get the same monthly salary no matter how much effort and time they’ve spent in that period. Many Australian companies often lean towards hiring contractors and paying them more for a couple of reasons. First, they don’t need to sign any long-term contracts. Second, a company doesn’t have to pay extra fees like health insurance or unemployment compensation. Also, hiring contractors can help in deducting more business expenses, that wouldn’t have been possible with employees.
One of the major perks of being an employee in a company is the benefits employers provide. An independent contractor has to take everything into account on their own. This means that you will have to pay for your health care or to finance your vacation or sick leave. A minimum of 20 paid vacation days in Australia won’t be available to you, meaning you’ll have to lose working hours if you decide to take a leave. Also, companies don’t pay unemployment compensation to contractors, so you don’t have the luxury of that safety net.
Being independent is one of the main reasons why people choose to try contracting, even with all the risks that follow it. When you are a contractor, you get to work for yourself, without having to answer to a boss above you. This usually means being able to create your schedule and choose when or where you’ll work. The incredible thing about this type of work is that you get paid solely based on the quality and quantity of your work. How you get there is your concern!
The position of independent contractors in Australia is firmly regulated by the government, and the Independent Contractors Act of 2006 protects their rights. However, there is still room for error. As if managing paperwork and administration on your own isn’t enough, you’ll need to make sure that, when signing a contract, you negotiate the best terms and arrangements, which can be overwhelming, especially if you’re new to this. Thus, hiring professional legal advisors like Chinese lawyers Sydney to assist with drafting a contract will leave both parties taken care of and satisfied.
Working on short-term contracts gives the contractors a chance to change their jobs occaisonally. In turn, it opens up more opportunities for professional growth and advancement. Getting a chance to always work on new projects and challenges will stop a contractor from ever getting bored and unmotivated in their workplace. In fact, contracting work is perfect for ambitious people who want to expand their professional network and are always seeking new experiences and ideas.
Since many contracts get signed for a short period, such work often means having to be on a constant job hunt. The sense of stability and security that you can find with full-time employment is seldom found in contracting. Those frequent job changes and the effort of making a reputation over and over again in new companies can become rather frustrating for many people. Also, when being an independent contractor, you need to train your patience, as there will undoubtedly be periods when you won’t be able to switch from one workplace to another immediately.
Considering the fact that many people nowadays choose the „uncertain“ path of contracting, means that there is something to it. However, deciding on going down this road is only a matter of personal choice and preference. Not all people thrive in a non-permanent and unsafe working environment. That being said, if you enjoy the freedom, and having different job opportunities, while possibly making more money, then independent contracting is definitely for you!