Employer offers handshake to contractor as they settle on a deal.

Start your contracting journey

CONTRACTING TOOLKIT

OUR CONTRACTING TOOLKIT

Your definitive guide to contracting in Aotearoa

Kia ora, and thank you for considering contracting with us here at Find Recruitment!

We've put together some of the top things you'll need to consider as you get started on this journey, as well as some key contacts you can reach out to in each of our teams, to begin discussing your career objectives and goals!

Possibly the most important point, is that as a self-employed contractor, you'll be paid a gross hourly rate. This means that all tax obligations (income, GST, ACC, Student Loan, etc.) become your responsibility.

You'll be responsible for ensuring that you are paying the correct amounts, on time, to the IRD and are managing your financial flow. This does also mean that you will not accrue annual or sick leave, and won't get paid for public holidays, during your contract, so you'll need to self manage this also.

Essentially, if you're working then you get paid - which is great if you regularly work long hours.

If you don't want to administer this yourself, then you can use the services at Hnry as a fantastic, quick and cost effective way to manage your contracting.
Click here to visit HnryHnry png
NOTE ⚠️

Quick things to consider before you start.

Your IRD (Inland Revenue Department) Number keeps track of the tax you pay and helps make sure you're paying the right amount, and/or receive the correct entitlements.

  • If you're operating as a sole trader, then you'll need to supply us with your personal IRD number.
  • If you're operating as a business, or through a company, then you'll need to supply us with your company IRD number. This number must also be registered with the Companies Office.

More information about IRD numbers, and applying for new numbers can be done online. Click here to view the IRD website.

As a contractor, if you're expecting to earn over $60,000 per year in any rolling 12 month period, then you're going to need to register yourself for GST. You are then required to add GST (Goods & Services Tax) to the price of your services and file all GST returns with Inland Revenue.

Registering for GST is a simple process which can be completed on the IRD website (click here to view). When registering, you will have to select whether you will file your GST returns every 1, 2 or 6 months. This will also determine how often you must make payments to the IRD for any GST owing.

If you have registered for GST, you will need to inform us and provide us with your GST number. We will then add GST to all payments that are made to you, and the GST will also be reflected on the buyer created tax invoice that we will provide to you. A buyer created tax invoice is simply an invoice that will be raised by our finance team, rather than by you, based on the approved hours you have worked, and your hourly or daily rate. This is available for you via our timesheet and billing system.

You will need to pay the GST charged on your services and paid to you on to Inland Revenue at the frequency determined when you first registered. It may be advisable to hold your GST in a separate bank account, so that it is separate to your day-to-day and business expenses, and is set to pay to the IRD as soon as the billing date rolls around.

You are also able to claim back any GST paid on any business expenses you have incurred. To do so, you will need to ensure you keep the tax invoices as a record for a minimum of 7 years.

Inland Revenue requires all labour-hire firms, such as Find Recruitment, to deduct withholding tax from payments that are made to contractors. Withholding tax must be deducted regardless of whether you are operating as a sole trader, through a company, or through any other legal form.

To ensure that we are deducting the right amount of withholding tax when you start an assignment, you will need to complete an Inland Revenue 'Tax Rate notification for contractors' form. This form provides us with the details of your IRD registration, and determines what amount of withholding tax should be withheld from any payments to you, then paid on to Inland Revenue.

If you do not complete and return this form to us, we are required to deduct at the no-notification rate of 45%.

As a self-employed contractor it is your responsibility to calculate and pay the correct amount of Income Tax to the IRD.  The IRD class your self-employed payments from Find as Schedular Payments and your Tax Code will be WT. On occasion, there may be other deductions required by the IRD.  Self-employed contractor tax is different to standard PAYE where income tax is deducted automatically by employers on behalf of employees. The following IRD link explains schedular payments  https://www.ird.govt.nz/income-tax/withholding-taxes/schedular-payments. Further into this link you will find an IRD tax rate estimation tool.

We highly recommend that you use an accountant to receive accurate tax advice or employ the services of a company that can provide you with such advice to ensure that you are paying the correct amount. The added benefit of this, is that an accountant can also advise you on additional benefits that come with being a self-employed contractor, and what work-related costs you may be able to claim tax back on.

You will be required to pay your own ACC levies. Typically included in PAYE, the ACC levy is an additional contribution that must be paid by you as a contractor. Levies are charged based on the type of work you perform - i.e. the higher the risk to your health and wellbeing, the higher the levy will be. Thus, it is important that you use the appropriate Business Industry Code (BIC) from your tax return or GST registration.

ACC will then use this BIC to assign you to a classification unit that best describes the type of work you perform as a contractor.

It is extremely important that you protect yourself against being sued by a client for making a professional mistake or damaging their property or reputation. Professional Indemnity insurance can provide you with cover in these circumstances.

  • Professional Indemnity Insurance covers you in case a client you are working for makes a claim against you, believing that they have suffered a loss or some form of damage from something you have or have not done. This may also include their belief that you have breached your professional duty to them.

As part of our commitment to our clients, we required all contractors to have the insurance listed above, and for these to be insured for at least NZ$5M.

You are welcome to arrange your own insurance cover by talking to an insurance broker, or alternatively Find Recruitment can include you in our group policy at an additional cost.

Further information on our policies can be obtained by speaking to any of our recruitment consultants.

There are additional considerations that come into play as a self-employed contractor. Repayments for Student Loans you are obligated for, or contributions towards your KiwiSaver.  These can be arranged by yourself directly with the IRD.

Want to chat with our team about how to start?

Chantelle Smith

Senior Consultant
022 323 8438
Auckland
Click to email me.

Sif Arnardóttir

Senior Consultant
027 577 0319
Auckland
Click to email me.

Linda Jessen

Senior Consultant
027 266 4170
Wellington
Click to email me.

Adam Poulopoulos

Senior Consultant
027 324 6434
Wellington
Click to email me.

Check out feedback from some of our real contractors!

For the purposes of anonymity, we have removed identifying details, but kept all information as given ver batim.
I have always been self employed, so contracting was an easy transition for me. It offers a lot of benefits and very little downside especially in todays employment environment where there is very little security if any. Having to do your own administration, tax returns and company returns (if using a company) can be a bit of bind but usually doesn't take too much time - but you have to be organised and do it!!
The option to work in a mixture of industries when I moved to NZ from the UK was great, as I wasn't fulfilled with the permanent job that I took initially in NZ. Learnings new skills in different industries and environments has immensely progressed my marketability. However, you do need to be very flexible and adaptable to changing environments and leadership styles. You’re brought in to fill a gap and you are expendable at any time.
I moved for the better pay and better hours. Simple. However, there's uncertainty around assignment end which can make things tricky.

Eager to discuss what contracting opportunities may await you?

Get in touch for a chat
🇳🇿 100% Kiwi Owned & Operated
💯 Trusted by Businesses Nationwide
🔒 Industry Trusted Professionals

Thanks for your interest in Find!

Thanks for your interest in what we do here at FIND. We love meeting and helping amazing kiwis every day and will always do our best for our clients and candidates. We've been simplifying the recruitment game since 2008, so don't hesitate to get in touch if you need our help!

Find Recruitment logo, but in White.
Find Recruitment logo, but in White.
Level 13, 342 Lambton Quay, Wellington, 6011
Level 1, 87 Albert Street, Auckland Central 1010