Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.




833 posts

Ultimate Geek
+1 received by user: 192


Topic # 248007 6-Mar-2019 16:07
Send private message quote this post

I have a lot of experience working as an IT contractor in various countries in Europe but here in NZ, I have only ever been an employee.

 

I am in discussion with a potential client regarding a likely 6 month contract.

 

I would be on an hourly rate and be paid after submitting invoices.

 

None of that is new to me but as I mentioned above, I have not done this in NZ.

 

Who can I talk to or where can I ask all of the obvious questions that I have.

 

Any suggestions?

 

TIA

 

 


View this topic in a long page with up to 500 replies per page Create new topic
 1 | 2
2517 posts

Uber Geek
+1 received by user: 750

Trusted
Lifetime subscriber

  Reply # 2192398 6-Mar-2019 16:21
Send private message quote this post

Hit us with the big questions?  Lots of experience here that can be drawn upon, though curlier stuff may result in a suggestion to chat to an accountant or lawyer.





"4 wheels move the body.  2 wheels move the soul."

“Don't believe anything you read on the net. Except this. Well, including this, I suppose.” Douglas Adams

550 posts

Ultimate Geek
+1 received by user: 126


  Reply # 2192407 6-Mar-2019 16:31
Send private message quote this post

As said already.... fire them here.  You'll probably get the most honest answers from this forum.

 

I have been a contractor in NZ.  Long story short: Its easy to do - finding work will depend on you though you say you're most of the way there.  I'd say make sure you've got indemnity insurance as I had to often prove and provide this.  There's a few models you can follow and the best advice would be to chat to an accountant about these.  Personally I set myself up a GST registered company and did it that way.  Very trivial to do in NZ.


 
 
 
 


1870 posts

Uber Geek
+1 received by user: 450

Trusted
Subscriber

  Reply # 2192415 6-Mar-2019 16:45
Send private message quote this post

Its boring I know, but:

 

From MBIE
https://www.business.govt.nz/starting-a-business/

 

 

 

From IRD
https://www.ird.govt.nz/yoursituation-bus/starting/business-starting-index.html

 

Consider where you are going to operate (Wellington, which is heavily public sector for example) and be ready to meet the requirements for the employers.

 

 

 

Also important:

 

https://www.ird.govt.nz/news-updates/contractor-changes.html

 

Contractors might be subject to deductions at source if you work through a labour hire company - an agency - but forwarned is forearmed.

 

 

 

 

 

 





________

 

Antonios K

 

Click to see full size


Amanzi
909 posts

Ultimate Geek
+1 received by user: 104

Trusted
Subscriber

  Reply # 2192416 6-Mar-2019 16:47
One person supports this post
Send private message quote this post

Definitely get yourself an accountant. Others here may be able to provide recommendations, I've been out of the contracting game for a few years now. But getting an accountant that you can talk to regularly is important - don't try and do it yourself, you'll either pay more than you need to, or miss important taxes you need to pay. And watch out for the provisional tax! (the accountant will explain further.)


49 posts

Geek
+1 received by user: 14


  Reply # 2192452 6-Mar-2019 18:00
quote this post

amanzi:

Definitely get yourself an accountant. Others here may be able to provide recommendations, I've been out of the contracting game for a few years now. But getting an accountant that you can talk to regularly is important - don't try and do it yourself, you'll either pay more than you need to, or miss important taxes you need to pay. And watch out for the provisional tax! (the accountant will explain further.)

 

 

Totally agree. A good accountant will pay for themselves (plus some) in what they save you.

mdf

2194 posts

Uber Geek
+1 received by user: 671

Trusted
Subscriber

  Reply # 2192460 6-Mar-2019 18:14
Send private message quote this post

You can do it yourself so long as you take the time to learn the rules and be disciplined about the requirements. For less than one year, it's more straightforward, since provisional tax etc. almost always only kicks after your first year in business.

 

If you can't/won't/don't want to do it yourself, an alternative to an accountant is a service like Hnry. Basically you do everything through their platform, and they will take care of all the accounting and tax requirements, including deducting the IRD's share and paying you the remainder. Kind of a hybrid employee/contractor service.

 

Professional advice will still be helpful upfront to help you sort out any risks/concerns about liability and structure (do you need/want a company? Professional Indemnity insurance? Stick your house in a trust? Professional accreditation/certification etc.?


274 posts

Ultimate Geek
+1 received by user: 133


  Reply # 2192511 6-Mar-2019 19:40
Send private message quote this post

Don't be afraid to talk to the IRD (in fact, you really ought to). I actually had a guy come out to talk to me and explain everything. He explained how it all worked, including registering for GST (because I was expecting to be over the threshold).

14650 posts

Uber Geek
+1 received by user: 2725

Trusted
Subscriber

  Reply # 2192515 6-Mar-2019 19:55
Send private message quote this post

I contracted for years, and had an accountant. If all your income for the year is contract income, you don't have overseas income, and you have nothing complex like a claim for home office expenses you don't need them. However, they can be good peace of mind. I just got rid of mind, though a friend who's an accountant will help me out. I only ever spoke with my account at tax time.

 

The main tip I have is to use Xero. Saves you time, saves your accountant time, so saves you money.

 

Accountant costs about $1000 per year for just doing tax returns, if you have Xero.


1526 posts

Uber Geek
+1 received by user: 160

Subscriber

  Reply # 2192554 6-Mar-2019 21:04
2 people support this post
Send private message quote this post

I've spent most of the past 20 years contracting in IT in NZ, having had my own company, sole trader, and partnerships at various times.  Happy to answer any questions, but in the meantime here are some things I have found to be important:

1) Get an accountant.  Yes you can do it yourself (I have a friend who just pays the full tax rates whilst contracting, claiming nothing, and she's happy with that) but its best to get food advice.  Plus accountant fees are claimable and I always manage to claim something each month

2) Register for GST.  I highly doubt you will earn < $60,000 in a year, so just do it.  Then charge GST on your invoices

3) A sole trader situation is fine (unless you are contracted directly by some of the bigger companies); agencies don't mind

4) Get indemnity insurance.  Most agencies will deduct the cost from your hourly rate

5) Go for the 2 monthly GST return option and don't spend your GST!  Do this from day 1 and it makes life easy.

6) Use a separate bank account for business stuff, including the income from your invoices

7) You will, by default, have 20% of your pre-GST income taken as withholding tax.  You can change this to be higher or lower.  it will make end of year tax payments much easier.





910 posts

Ultimate Geek
+1 received by user: 191

Trusted

  Reply # 2192598 6-Mar-2019 21:58
Send private message quote this post

irongarment: Don't be afraid to talk to the IRD (in fact, you really ought to). I actually had a guy come out to talk to me and explain everything. He explained how it all worked, including registering for GST (because I was expecting to be over the threshold).

 

https://www.ird.govt.nz/contact-us/seminars/auckland/

 

🤪 Forgive me, I am biased (Auckland based)





Please keep this GZ community vibrant by contributing in a constructive & respectful manner.


274 posts

Ultimate Geek
+1 received by user: 133


  Reply # 2192643 6-Mar-2019 22:15
Send private message quote this post

ANglEAUT:

irongarment: Don't be afraid to talk to the IRD (in fact, you really ought to). I actually had a guy come out to talk to me and explain everything. He explained how it all worked, including registering for GST (because I was expecting to be over the threshold).


https://www.ird.govt.nz/contact-us/seminars/auckland/


🤪 Forgive me, I am biased (Auckland based)


Ah, it's different for you sophisticated city-types.

dzh

34 posts

Geek

Trusted

  Reply # 2192651 6-Mar-2019 22:30
Send private message quote this post

nzkc:

 

As said already.... fire them here.  You'll probably get the most honest answers from this forum.

 

I have been a contractor in NZ.  Long story short: Its easy to do - finding work will depend on you though you say you're most of the way there.  I'd say make sure you've got indemnity insurance as I had to often prove and provide this.  There's a few models you can follow and the best advice would be to chat to an accountant about these.  Personally I set myself up a GST registered company and did it that way.  Very trivial to do in NZ.

 

 

Interesting. Ever had to use your indemnity insurance?


1500 posts

Uber Geek
+1 received by user: 1188

Subscriber

  Reply # 2192691 6-Mar-2019 22:41
Send private message quote this post

I have managed major suppliers/been a decision maker on contract templates (alongside legal and sometimes procurement) for multiple listed companies. I am only speaking from the perspective of large corporates and frankly don't particularly care for small/medium size companies (never worked for one and never would want to). Contrary to popular belief, large corporates aren't as lawsuit happy as people make them out to be (one place I worked at did win a major dispute with a small IT consultant). However, you're simply not going to get past prequalification if you do not hold suitable PI and PL policies, simply because anyone who tries to engage you (short of being a GM, GGM or above) will find themselves up against somebody in commercial, procurement, legal and/or risk. And there's usually only one likely winner in those cases.

 

The lack of such policies or gross under-insurance will very quickly lead to suspicion that you aren't in-line with the culture/thinking of these places. 

 

 

 

 


276 posts

Ultimate Geek
+1 received by user: 100


  Reply # 2192703 6-Mar-2019 22:54
Send private message quote this post

dzh:

 

Interesting. Ever had to use your indemnity insurance?

 

 

Doesn't really matter, agencies usually require the contractor to have a indemnity insurance with a certain insured amount (and will offer to provide you one for an hourly fee)


1500 posts

Uber Geek
+1 received by user: 1188

Subscriber

  Reply # 2192707 6-Mar-2019 22:58
Send private message quote this post

I should also add that people need to think about insurance in a more sophisticated way than just "How likely can someone make our a case against me?". Depending on your scope of work and how robust your engagement terms are (but watch out for the problem of trying to exclude everything and risk shift everything to the client - people with a brain just won't go near you), your ultimate risk of being successfully sued may vary. But I can't stress this enough: just the threat of being gone after by a large entity -- with basically unlimited money to spend and the ability to access the best lawyers and professional witnesses that money can buy -- without any kind of insurance backup is scary and stupid. And don't assume that just because you provide advisory services, you won't need PL insurance. If you work on client sites or touch client's equipment, you should get PL, the cost of which is generally rather inconsequential compared to PI. Just amortise the costs into your hourly rates.

 

 

 

 

 

 


 1 | 2
View this topic in a long page with up to 500 replies per page Create new topic



Twitter »

Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

NZ and France seek to end use of social media for acts of terrorism
Posted 24-Apr-2019 12:13


Intel introduces the 9th Gen Intel Core mobile processors
Posted 24-Apr-2019 12:03


Spark partners with OPPO to bring new AX5s smartphone to New Zealand
Posted 24-Apr-2019 09:54


Orcon announces new always-on internet service for Small Business
Posted 18-Apr-2019 10:19


Spark Sport prices for Rugby World Cup 2019 announced
Posted 16-Apr-2019 07:58


2degrees launches new unlimited mobile plan
Posted 15-Apr-2019 09:35


Redgate brings together major industry speakers for SQL in the City Summits
Posted 13-Apr-2019 12:35


Exported honey authenticated on Blockchain
Posted 10-Apr-2019 21:19


HPE and Nutanix partner to deliver hybrid cloud as a service
Posted 10-Apr-2019 21:12


Southern Cross and ASN sign contract for Southern Cross NEXT
Posted 10-Apr-2019 21:09


Data security top New Zealand consumer priority when choosing a bank
Posted 10-Apr-2019 21:07


Samsung announces first 8K screens to hit New Zealand
Posted 10-Apr-2019 21:03


New cyber-protection and insurance product for businesses launched in APAC
Posted 10-Apr-2019 20:59


Kiwis ensure streaming is never interrupted by opting for uncapped broadband plans
Posted 7-Apr-2019 09:05


DHL Express introduces new MyDHL+ online portal to make shipping easier
Posted 7-Apr-2019 08:51



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.