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.




826 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
2499 posts

Uber Geek
+1 received by user: 748

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

523 posts

Ultimate Geek
+1 received by user: 115


  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.


 
 
 
 


1853 posts

Uber Geek
+1 received by user: 442

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
908 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

2163 posts

Uber Geek
+1 received by user: 665

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: 132
Inactive user


  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).

14507 posts

Uber Geek
+1 received by user: 2669

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.





AWS Certified Solution Architect Professional, Sysop Administrator Associate, and Developer Associate
TOGAF certified enterprise architect
Professional photographer


1518 posts

Uber Geek
+1 received by user: 156

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.





887 posts

Ultimate Geek
+1 received by user: 188

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: 132
Inactive user


  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?


1463 posts

Uber Geek
+1 received by user: 1159

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)


1463 posts

Uber Geek
+1 received by user: 1159

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


Donate via Givealittle


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 »

Amazon introduces new Kindle with adjustable front light
Posted 21-Mar-2019 20:14


A call from the companies providing internet access for the great majority of New Zealanders, to the companies with the greatest influence over social media content
Posted 19-Mar-2019 15:21


Two e-scooter companies selected for Wellington trial
Posted 15-Mar-2019 17:33


GeForce GTX 1660 available now
Posted 15-Mar-2019 08:47


Artificial Intelligence to double the rate of innovation in New Zealand by 2021
Posted 13-Mar-2019 14:47


LG demonstrates smart home concepts at LG InnoFest
Posted 13-Mar-2019 14:45


New Zealanders buying more expensive smartphones
Posted 11-Mar-2019 09:52


2degrees Offers Amazon Prime Video to Broadband Customers
Posted 8-Mar-2019 14:10


D-Link ANZ launches D-Fend AC2600 Wi-Fi Router Protected by McAfee
Posted 7-Mar-2019 11:09


Slingshot commissions celebrities to design new modems
Posted 5-Mar-2019 08:58


Symantec Annual Threat Report reveals more ambitious, destructive and stealthy attacks
Posted 28-Feb-2019 10:14


FUJIFILM launches high performing X-T30
Posted 28-Feb-2019 09:40


Netflix is killing content piracy says research
Posted 28-Feb-2019 09:33


Trend Micro finds shifting threats require kiwis to rethink security priorities
Posted 28-Feb-2019 09:27


Mainfreight uses Spark IoT Asset Tracking service
Posted 28-Feb-2019 09:25



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.