Are you the owner of the business?
Staff on demand, a.k.a. independent contractors, consultants and freelancers, provide a flexible working situation for both the company seeking staff and the worker. However, there are many more benefits to this working arrangement, as outlined below.
If you're looking to save money or reduce extra spend on salaries when you may not require staff all the time, consider using a contractor. You can structure payments with the contractor on an hourly rate, or on a per-project rate. Speak to them before you sign an agreement to negotiate the best way forward. If you’re unsure of the going rate, ask recruitment agencies or your HR person for quotes.
If you run your business out of your home or a shared office space, consider engaging contractors who have their own place of work. With email, cloud computing systems and technology in place, people can do business from virtually anywhere these days. You might find that this arrangement will work well with your contracting staff.
If you’ve got a big project coming up, or a sudden surge of clients, using a skilled contractor to assist will be beneficial. You can allocate specific tasks to them and provide clear deadlines and expectations around what needs to be done and by when. You'll have more control of your budgeting too - allocate funds from the project to the contractor and when it comes to the end of year taxes, their work is written off as an expense.
With staff on demand, you can generally terminate their work at any time (subject to the contract, of course). So, if you no longer need their support or they complete their tasks sooner than expected, you can reduce hours and expenses altogether.
Remove the admin
In most cases, contractors are obliged to take care of their own taxes, KiwiSaver, superannuation, annual/holiday leave, and other benefits. In April 2017, IRD made changes to the way contractors pay tax on schedular payments. Some can agree to make the payments with their payer. For more information, speak to your accountant or the IRD about duties and responsibilities, and how this will affect you.