Setting Up As A Contractor
Tips for Setting up a Career as a Contractor with RWA
Working as a Contractor is very much like running your own business. That means you’ll need to consider all the aspects that other business owners do, such as:
- Finances – Do you have enough capital to cover all living expenses before being paid? Discuss the payment terms for your contract assignment with your RWA Consultant. Save enough to allow for downtime when not earning. Take the time to put good systems in place to manage your invoicing and collections.
- Insurance – Check whether your insurance covers your earnings in case something goes wrong. Consider Professional Indemnity and Public Liability cover.
- Taxation – Plan to put aside a portion of each payment in a separate bank account to account for taxes. Research what you can and can’t claim for and seek an accountant’s advice if necessary.
- Marketing – What brand and image do you wish to portray? How will you build your brand?
- Business Development – How will you market yourself? Use LinkedIn and other business social networks and groups. Keep future work in mind and have a strategy that ensures you receive notification of work ahead of your competitors.
- Business Improvement – Try to up-skill yourself on a regular basis so that you are consistently marketable.
The responsibility of working as a Contractor is yours. As you are not a permanent staff member, a change of mind-set is often needed. When you start your next contract assignment, always think about how you can create a positive, professional impression. Try to fit into the company culture as quickly as you can while delivering top quality work.
Questions a New Contractor with RWA May Have
Can I claim expenses?
Expenses incurred are reimbursable only if you have pre-arranged this with your Client Manager and you keep your tax receipts. Please contact us for details on how to make a claim.
Please discuss your leave with your Client Manager initially and then inform your RWA Consultant. All leave must be entered against the task “Contractor Absence” in our timesheet. Please note that contractors are not entitled to paid holidays or public holidays.
What’s your processes around timesheet & timesheet approval?
You will be sent a link to register with our timesheeting system, Invoxy, prior to the start of your assignment.
You are required to complete and submit your timesheet on a weekly basis to be authorised by your timesheet approver. In addition to this you also need to submit your timesheet at the last day of the month, because we process our invoices on a calendar month basis.
My timesheet approver is away, what do I do?
If your approving manager is away, please notify us ASAP at email@example.com
When do I submit my invoice?
We process invoices on a calendar month basis. We ask that you submit your invoice to firstname.lastname@example.org by 8 AM on the first working day of each month. This will allow us to reconcile your records with ours before invoicing the client.
If you miss your timesheet and invoice deadline, you may be missed out of the invoice run and your payment may be delayed. Hence why it is important to get your timesheet and invoice in on time.
If you have not contracted before and require an invoice template, we can provide one for you.
When do I get paid?
Your invoice will be paid on the 28th of each month for the previous month’s work. If the 28th falls on a weekend or public holiday, payment will be processed the business day prior.
Please find our payment schedule here
What if I’m sick and need time off?
Please inform your Client Manager and let your RWA Consultant know as soon as you can.
How does my contract get renewed?
Approximately six weeks out from the end of your contract term, your RWA Consultant will liaise with you and the Client to discuss whether the contract is likely to be renewed. If it is, a new assignment confirmation will be produced for you to sign.
Contractor Withholding Tax
Effective from 1 April 2017, RWA is obligated to deduct withholding tax (WT) from all payments made to you and report this to IRD monthly. You need to complete and send us the tax notification form IR330C prior to starting your assignment.
Who pays my taxes?
As an independent contractor you are solely responsible for all taxes in respect of the services you provide. This includes but is not limited to ACC levies, income tax, GST (if applicable) and all other liabilities whatsoever. You must make these payments as required to the IRD or other such agencies. Refer to either the IRD or your Accountant for further information. We can refer you to an Accountant at your request.
Do I have to be GST registered?
You must register for GST if your annual turnover for the previous 12 month period has exceeded $60,000 or if you expect that your turnover will exceed $60,000 within the next 12 month period or if you charge GST in your prices. In the case of the latter you must register even if your turnover is less than $60,000. Refer to the IRD www.ird.govt.nz or your Accountant for further information.
All independent contractors are required to be covered by professional indemnity insurance. RWA has its own cover of ten million dollars, which provides cover to RWA for claims arising out of the actions of its Contractors. This means that where RWA is sued, as the result of your action (or inaction), RWA professional indemnity insurance may cover the cost of the claim. RWA professional indemnity insurance does not provide cover in the situation where legal action is taken against you (or your company). You must obtain your own professional indemnity insurance.
RWA cannot accept any responsibility for any action brought against you by any Client. Upon acceptance of an offer requiring your services, you will be required to agree to indemnify RWA and keep RWA indemnified against any claims, liabilities, damages, losses, and expenses (including legal expenses) of any nature caused by or arising from, or in connection with, a wilful or negligent action (or inaction) on your part, in the course of fulfilling obligations pursuant to your assignment.
Is this your first payment with RWA?
If so, we also require the appropriate tax forms (IR330C and/or IR23BS) completed and returned to us by the first working day of the month. Failure to do this may result in the delay of your payment.
If you’d like a more detailed guide on Contracting and other useful recruitment tips, head on over to our blog. And don’t forget that our team is always on hand to answer any questions you may have about working as a Contractor for RWA, so don’t hesitate to contact us today if you need any support or advice.
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