Independent contractor

[Argyle]

I got a job offer as an independent contractor for an HomeCare company with an hourly rate of 15dollars. I got 3years of experience as a caregiver.

As i understand you have to pay your own tax as an independent contractor and the only thing the agency will pay is my petrol and a first aid certificate.

Do i really need to get a GST number as an independent contractor? The agency can make an invoice for me and pay the 20% tax if i want to, which seems good.

I don't know much about this and wonder if there's anything i should think about before signing the contract?

15dollars is not very much but it's better then mocking horse shit and getting killed by thoroughbreds, working 50 - 70h per week

[crazyhorse]

I do not think you need to be registered for GST - not certain, but if you look at the ird website, I think the amount to earn needs to be in excess of $60k, and you would be under that if you are only on $15 p/h.

Good on you for taking what you can. Plenty of people out of work so its good to see someone being pro-active. Advantage with being a contractor, is you get to claim back all sorts of things from your income tax. Do talk to an accountant - or try to get some free advice.

good luck :niceone:

[boomer]

Register your business, ACC, insurance, tax, gst and someone to do your quarterly/yearly returns...

[p.dath]

You want to register for GST, because if you do then you can claim back the GST on anything you buy that is work related.

But $15 is pretty low for an independent contractor. It would make me wonder how good your "employer" was going to be.

Other things to consider. Do you have to have your own public liability insurance, or do they cover you in theirs?
How much is your annual accounting going to cost?


And the final kicker for me. If your going to derive 80% or more of your income from this source then you aren't really an independent contractor - so the whole thing is not very legal.
If you simply declined to pay any tax, they would probably end up having to pay it for you as the IRD would say you fail to meet the criteria for an independent contractor.

My thoughts - don't take up this opportunity unless your short on choices.

[Headbanger]

whoa ,$15 an hour and you pay all your expenses?

If thats the case, I fully support you staying on the dole and continuing to look for a job, That offer is offensive.

[Argyle]

You want to register for GST, because if you do then you can claim back the GST on anything you buy that is work related.

But $15 is pretty low for an independent contractor. It would make me wonder how good your "employer" was going to be.

Other things to consider. Do you have to have your own public liability insurance, or do they cover you in theirs?
How much is your annual accounting going to cost?


And the final kicker for me. If your going to derive 80% or more of your income from this source then you aren't really an independent contractor - so the whole thing is not very legal.
If you simply declined to pay any tax, they would probably end up having to pay it for you as the IRD would say you fail to meet the criteria for an independent contractor.

My thoughts - don't take up this opportunity unless your short on choices.

Some good things to know here, I've read the contract a couple of times and not seen anything about liability insurance. What's that for?

Must i have a accountant to do my figures?

[dogsnbikes]

I got a job offer as an independent contractor for an HomeCare company with an hourly rate of 15dollars. I got 3years of experience as a caregiver.

As i understand you have to pay your own tax as an independent contractor and the only thing the agency will pay is my petrol and a first aid certificate.

Do i really need to get a GST number as an independent contractor? The agency can make an invoice for me and pay the 20% tax if i want to, which seems good.

I don't know much about this and wonder if there's anything i should think about before signing the contract?

15dollars is not very much but it's better then mocking horse shit and getting killed by thoroughbreds, working 50 - 70h per week

There are 2 options: 1st - being GST registered is better for the Agency as they can claim GST, you, however will be locked into the IRD GST millstone for a very long time, and unless you are prepared to either upskill to ensure you have the ability to prepare and pay GST two monthly, and invariably you will be paying, as you are providing a service, with very few gst allowable expenses reducing the gst you will pay. 2nd option - they can deduct your tax at source, (witholding tax), which means you will need to pay the tax direct to the IRD monthly, (they may pay it for you, but I would check after the first month of working that this has been done), this takes a lot of work to make sure you do pay the correct amount, and not end up with a debt at the end of the year. Alternatively, if you were paid wages, this means they are responsible for paying the tax direct, which is the safer option unless you have someone who can give you the support with the legal requirements in option 1.

[Argyle]

whoa ,$15 an hour and you pay all your expenses?

If thats the case, I fully support you staying on the dole and continuing to look for a job, That offer is offensive.

Yeaa i feel it's not a good offer and i can't be on any dole because i am not an New Zealand resident. But the horse job fucking kills me!

[Nasty]

Some good things to know here, I've read the contract a couple of times and not seen anything about liability insurance. What's that for?

Must i have a accountant to do my figures?

It is wise to talk to an accountant ... have one down here who deals with small business types .. but also as a contractor you need to pay ACC as well ... there is lots of things that are just not as simple as it would be. Drop me a PM if you wish to contact the accountant .. I don't think she charges for the first chat ;)

[Argyle]

You want to register for GST, because if you do then you can claim back the GST on anything you buy that is work related.

But $15 is pretty low for an independent contractor. It would make me wonder how good your "employer" was going to be.

Other things to consider. Do you have to have your own public liability insurance, or do they cover you in theirs?
How much is your annual accounting going to cost?


And the final kicker for me. If your going to derive 80% or more of your income from this source then you aren't really an independent contractor - so the whole thing is not very legal.
If you simply declined to pay any tax, they would probably end up having to pay it for you as the IRD would say you fail to meet the criteria for an independent contractor.

My thoughts - don't take up this opportunity unless your short on choices.
I will get 100% of my income from the company, they will send me to different clients who need help in their home. That's why i find it strange why i would not be a an employee. Is it not better for them to just send me around to different places and pay my with an hourly rate as an employee?

[Argyle]

It is wise to talk to an accountant ... have one down here who deals with small business types .. but also as a contractor you need to pay ACC as well ... there is lots of things that are just not as simple as it would be. Drop me a PM if you wish to contact the accountant .. I don't think she charges for the first chat ;)


I did check the ACC and seems like i don't have to pay anything when i did their calculator. But since i wont make any big money, with insurances and everything this might not be a good choice. The horses seem to be better now?!

[Meanie]

I run my own business and have employees. As i read it You will be self employed therefore will have all sorts of expenses coming at you from all sides
For $15 an hour with the terms you are describing you may as well bend over and drop your pants
Demand more or work on wages

[Virago]

Dude, you're being shafted. Seriously. As a rule of thumb, most contractors need to charge double their hourly pay rate, to cover overheads.

At $15.00 an hour, most of your money will be swallowed up by expenses.

You don't know about Liability Insurance? You'll probably need it. Im not sure what you're doing in this job, but if say you accidentally drill a hole in a water pipe in a building, tens of thousands of dollars in damage could result - and you're liable.

As an independant contractor, you'll need to cover your own sick leave, holiday pay etc, and your own ACC.

There's also a lot more to vehicle costs than petrol.

You need financial / legal advice - urgently. The whole thing sounds very dodgy - and I would suspect illegal.

[p.dath]

Some good things to know here, I've read the contract a couple of times and not seen anything about liability insurance. What's that for?

Must i have a accountant to do my figures?

If as an independent contractor you cause some damage you pay for it. So lets say you have an accident in a $40k work vehicle. You owe their insurance company $40k.
People typically take out at least $1 million in public liability insurance.


You can probably get away with a cash book. You record every transaction you make, and just have your accountant prepare your EOY return.

Do note that once you are not listed as a wage and salary earner it affects all sorts of things you may need further down the line, such as benefits, child support, etc.

[Mully]

Sounds like they want it both ways - if you're a contractor, you don't get holiday/sick pay either.

$15/hour as an employee is barely acceptable for that job

IMO - it's a rip off.

[p.dath]

Yeaa i feel it's not a good offer and i can't be on any dole because i am not an New Zealand resident. But the horse job fucking kills me!

So if you actual tax is 20%, then your $15/hour is actually $12/hour.

If your tax rate is meant to be 33% then at the end of the year you need to pay the short fall. Then your actual hourly rate would be $9.90/hour.

This is the gross amount. You still need to pay ACC levies. potentially public liability insurance. Potentially accounting fees.

[Headbanger]

And cover your own sick days and holidays, including public holidays.

You will be getting about 50c of that hourly rate.

[Mumbles]

You wont get paid to be sick or go on holiday so you better factor in 5 weeks a year of not earning any money …. Now does that $15.00 sound good.
Might be a good point to raise the $15 hr to something better, that’s why they want you to contract so they don’t have to pay it to you say $600 a week x 5 weeks is $3000 you lose before you start so you could try for another $1.45h more to cover your costs…
But if you can contract to other companies then that’s ok …. Remember also as soon as they run out of work they don’t have to pay you and they don’t have to warn you…. Don’t mean to be a downer but good luck. (I’ve been contracting and it can be rewarding you have to be the best at your job to keep it though)

[Argyle]

You wont get paid to be sick or go on holiday so you better factor in 5 weeks a year of not earning any money …. Now does that $15.00 sound good.
Might be a good point to raise the $15 hr to something better, that’s why they want you to contract so they don’t have to pay it to you say $600 a week x 5 weeks is $3000 you lose before you start so you could try for another $1.45h more to cover your costs…
But if you can contract to other companies then that’s ok …. Remember also as soon as they run out of work they don’t have to pay you and they don’t have to warn you…. Don’t mean to be a downer but good luck. (I’ve been contracting and it can be rewarding you have to be the best at your job to keep it though)

Been talking to my fiance and she says i should look for something other now. It's just to much mocking around for shit money. Which i have realized now by reading all answers. I could do this job if they pay me 22 - 25dollars per hour maybe?! Since i have to save for my own holiday money, pay my own insurances, acc etc. And it says I'm not allowed to work for another company in the contract.

[p.dath]

... And it says I'm not allowed to work for another company in the contract.

If it says that then it isn't a legal independent contract (as in it would fail the test under the IRD rules). It is effectively an employment contract.

These guys sound like bad employers. Your doing the right thing. Walk away.

[Argyle]

If it says that then it isn't a legal independent contract (as in it would fail the test under the IRD rules). It is effectively an employment contract.

These guys sound like bad employers. Your doing the right thing. Walk away.

It says like this

Restraint

Work for, either directly or indirectly, or have any interest whatsoever, in any business or venture in direct or indirect competition with (the company) without the express written consent of (the company)

[p.dath]

It says like this

Restraint

Work for, either directly or indirectly, or have any interest whatsoever, in any business or venture in direct or indirect competition with (the company) without the express written consent of (the company)

That's not quite the same. That's an anti-competition clause. Once again, not normal in an independent contract, as being "independent" usually implies you are free to work for whomever you please.
However this is reasonably legal.

This contract makes you *dependent* on them. Walk away.

[Mumbles]

Been talking to my fiance and she says i should look for something other now. It's just to much mocking around for shit money. Which i have realized now by reading all answers. I could do this job if they pay me 22 - 25dollars per hour maybe?! Since i have to save for my own holiday money, pay my own insurances, acc etc. And it says I'm not allowed to work for another company in the contract.

Nothing stopping you asking for 25hr you never know... dont let them :spanking: better to not take it after demanding what your worth then you can always get them on the contract restraint of trade deal....

[Virago]

It gets worse and worse, eh?

I'm horrified - and curious as to who these bastards are...

[Mom]

And it says I'm not allowed to work for another company in the contract.

I wont bother to reitterate what others have said before me on here, but this is the kicker for me.

The people that have offered you this amazing deal are attempting to shaft you, and no doubt are in fact shafting others. They will find themselves in the deepest of doo doo if IRD learn of these independant contractors they "employ".

There are some fairly watertight rules around what defines an independant contractor and what defines an employee. Stay away from this one is my advice.

Pisses me off there are people/companies that will try to negate their liabilities for annual leave/sick leave and the like by "employing" contractors that they treat worse than employees!

[Argyle]

It gets worse and worse, eh?

I'm horrified - and curious as to who these bastards are...

Hehe, i am a foreigner and easy to fool of course. But since i had heard some bad things about these independent contracts i wanted to make sure if this would be a good thing for me or a bad thing.

The company is a major home care provider based in Auckland who's just expanded to Waikato.

[Argyle]

I wont bother to reitterate what others have said before me on here, but this is the kicker for me.

The people that have offered you this amazing deal are attempting to shaft you, and no doubt are in fact shafting others. They will find themselves in the deepest of doo doo if IRD learn of these independant contractors they "employ".

There are some fairly watertight rules around what defines an independant contractor and what defines an employee. Stay away from this one is my advice.

Pisses me off there are people/companies that will try to negate their liabilities for annual leave/sick leave and the like by "employing" contractors that they treat worse than employees!

Hmm yes, i think i should be an employee instead. Strange this contract, seems like i would be in deepest shit if i sign this. Most fun of all is they require a witness when i sign.
No i will back away from this, look for another job!

[cowboyz]

I have many problems with this whole idea.

1. If you are a contractor and you are contracting your services then you set the price. Not them..

2. this just wreeks of an employer trying to get out of their responsibilies reguarding holiday pay/ acc/ insurance/ kiwisaver etc

keep walking... I havent even seen the contract and I can smell dodgey all the way from here.

signed..

agricultrual/dairy contractor for 16 years.

Run forest... run!!!

[Argyle]

So as i understand it, you can't do independent contracting on 15dollar per hour it would just be a great loss for me.

I'm wondering now what should i write to the woman who interviewed me. I would really want to do the job but i don't want to be ripped off and i don't want to do lots of paperwork and mocking around with taxes etc. I just want a job, work and get payed. Like I do now but not working 50 - 70h per week.

Any suggestions? I can ask if the company would be able to employ me as a employee instead? Give my reasons, trying won't kill anyone.

cheers!

[p.dath]

So as i understand it, you can't do independent contracting on 15dollar per hour it would just be a great loss for me.

I'm wondering now what should i write to the woman who interviewed me. I would really want to do the job but i don't want to be ripped off and i don't want to do lots of paperwork and mocking around with taxes etc. I just want a job, work and get payed. Like I do now but not working 50 - 70h per week.

Any suggestions? I can ask if the company would be able to employ me as a employee instead? Give my reasons, trying won't kill anyone.

cheers!

Companies that write contracts like that tend to be bad employers. Careful what you wish for.

But if you really want, say your keen but want to be an employee, not a contractor. And that you want $x/hour.

And I assume your visa allows you to work in New Zealand ...

[Argyle]

Companies that write contracts like that tend to be bad employers. Careful what you wish for.

But if you really want, say your keen but want to be an employee, not a contractor. And that you want $x/hour.

And I assume your visa allows you to work in New Zealand ...

A yes my Visa is a sponsored one on my fiance who's a radiographer. We are about to apply for permanent residency.
The Visa i am on now allows me to take any job.

[Macontour]

Been talking to my fiance and she says i should look for something other now. It's just to much mocking around for shit money. Which i have realized now by reading all answers. I could do this job if they pay me 22 - 25dollars per hour maybe?! Since i have to save for my own holiday money, pay my own insurances, acc etc. And it says I'm not allowed to work for another company in the contract.

If it says you can't work for anyone else, you hardly come under the "self employed, independant contractor category for IRD purposes.

I am no accountant but years ago I worked in a similar fashion installing home security systems. The benefit to you of being Self employed, independant contractor are that all your business costs are tax deductible including a percentage of vehicle expenses, cell and landline phone costs, house costs(ie rates etc) because you WOULD have an area of the house set up as a home office WOULDN'T you, possibly clothing/uniform costs and so on.

However it really sounds like you would technically be an employee and they are just renting you out.

Best to get some legal and accountant advice and if the boss says you don't need to...run away as fast as you can.

The advice may cost you little money, porobably will, but may save you a lot in the long run.

[Argyle]

If it says you can't work for anyone else, you hardly come under the "self employed, independant contractor category for IRD purposes.

I am no accountant but years ago I worked in a similar fashion installing home security systems. The benefit to you of being Self employed, independant contractor are that all your business costs are tax deductible including a percentage of vehicle expenses, cell and landline phone costs, house costs(ie rates etc) because you WOULD have an area of the house set up as a home office WOULDN'T you, possibly clothing/uniform costs and so on.

However it really sounds like you would technically be an employee and they are just renting you out.

Best to get some legal and accountant advice and if the boss says you don't need to...run away as fast as you can.

The advice may cost you little money, porobably will, but may save you a lot in the long run.

It says i must consult with the company if i will work for someone else. But the problem this is as a Caregiver. There are no one else who i can take some work from, caregivers i assume are always employees? Who should give me work outside the employer i got?
There is a point there, they will as you say hire me out to their clients.
I mean they can only provide me so far a sunday and monday. 16h hours work permanently based at a mans house. I will get 240dollars after tax for that work, that is only pocket money and top of this i am supposed to pay ACC, insurances etc etc.
Sure they might have some more work for me but i can only refer to them for some work, not to anyone else. Other company's have their own employees.

[BiK3RChiK]

Forget it mate! It's a crock........

[Argyle]

this is what i wrote to the lady who i have been in contact with

Hi Sally!



During the weekend and today I have been seeking some advice about the independent contract you gave me.

As it says in the contract I have to pay for all my own expenses except the ones you mentioned to me. But I have to pay ACC, liability insurance, sick days, holiday and annual accountancy on 15dollars per hour, this won’t leave me much in the end I am afraid.

A friend to me said the contract is more an employee contract then an independent contract. Since (the company) will more “hire” me out to their clients I will also work more like an employee then an independent contractor.

Another said the contract is illegal and (the company) more tries to get away from paying sick days, holidays, Acc, Kiwi saver by offering this contract.



I have not gone to an accountant yet to seek some legal advice but I understand that 15dollars won’t take me far if I have to pay for all my own expenses as mentioned above.

It does look more like I have to earn 30dollars per hour if I am going to do this work as an independent contractor.



But if I were employed as an employee I could start of with 15dollars per hour that would not be a problem for me. If they don’t want to give me a certain amount holidays they can pay me some extra on my hourly rate, for me to put aside myself.



I really would like to do this job but not under the conditions as an independent contractor but as an employee.



I hope you understand my position in this matter?



Regards

Robin Andersson

[reofix]

Your reply is a more than reasonable response to what amounted to an exploitative slavery contract... No employer with an ounce of decency would entrap a staff member into becoming a "contractor " at that hourly rate. Th e costs of being a sole trader and meeting all compliance costs are increasing all the time. A suitable charge out rate is 3 times the wage rate. If you are paying someone $15 per hour (even if it yourself you are paying) you need to charge out at $45 per hour + gst to have a business that will meet its costs and show a return for the risks involved.

[Argyle]

Your reply is a more than reasonable response to what amounted to an exploitative slavery contract... No employer with an ounce of decency would entrap a staff member into becoming a "contractor " at that hourly rate. Th e costs of being a sole trader and meeting all compliance costs are increasing all the time. A suitable charge out rate is 3 times the wage rate. If you are paying someone $15 per hour (even if it yourself you are paying) you need to charge out at $45 per hour + gst to have a business that will meet its costs and show a return for the risks involved.

Hmm okay, no i fully understand they try to fuck me sideways here. But i learned allot from this, always something. I know they won't offer me the job anymore, they will probably get someone who will accept this. I might just report them to the IRD or go to fairgo? Blacklist the company!?

[Meanie]

this is what i wrote to the lady who i have been in contact with

Hi Sally!



During the weekend and today I have been seeking some advice about the independent contract you gave me.

As it says in the contract I have to pay for all my own expenses except the ones you mentioned to me. But I have to pay ACC, liability insurance, sick days, holiday and annual accountancy on 15dollars per hour, this won’t leave me much in the end I am afraid.

A friend to me said the contract is more an employee contract then an independent contract. Since (the company) will more “hire” me out to their clients I will also work more like an employee then an independent contractor.

Another said the contract is illegal and (the company) more tries to get away from paying sick days, holidays, Acc, Kiwi saver by offering this contract.



I have not gone to an accountant yet to seek some legal advice but I understand that 15dollars won’t take me far if I have to pay for all my own expenses as mentioned above.

It does look more like I have to earn 30dollars per hour if I am going to do this work as an independent contractor.



But if I were employed as an employee I could start of with 15dollars per hour that would not be a problem for me. If they don’t want to give me a certain amount holidays they can pay me some extra on my hourly rate, for me to put aside myself.



I really would like to do this job but not under the conditions as an independent contractor but as an employee.



I hope you understand my position in this matter?



Regards

Robin Andersson

Good for you, Good luck with this, hopefully something will turn up for you soon and youll get a reasonable job offer

[Argyle]

Good for you, Good luck with this, hopefully something will turn up for you soon and youll get a reasonable job offer

Will anyway be fun to read the answer!

[Argyle]

Haha, this how they applied my letter!

Hi Robin,

Thankyou for your email.
Unfortunately the terms of the contract are not negotiable.
Thankyou for your application and good luck in your future endeavours

Regards
xxx
xxxx
xxxxxx

[duckonin]

whoa ,$15 an hour and you pay all your expenses?

If thats the case, I fully support you staying on the dole and continuing to look for a job, That offer is offensive.

At this time in NZ Harcourts employs independant contractors (sales persons) at such a high rate sales persons per number of houses per town, that most of those independant contractors before paying all of their expenses and there are a heap of them, are earning less than $15 per hour, but they stick it out in hope of doing better, but with the number per office employed it has become a lottery....Who makes a small dollar this week, a lot say it is better to make Fuck all than go on the dole..

[cowboyz]

thank god for that....... You just dodged a bullet.

[Argyle]

At this time in NZ Harcourts employs independant contractors (sales persons) at such a high rate sales persons per number of houses per town, that most of those independant contractors before paying all of their expenses and there are a heap of them, are earning less than $15 per hour, but they stick it out in hope of doing better, but with the number per office employed it has become a lottery....Who makes a small dollar this week, a lot say it is better to make Fuck all than go on the dole..

I can't be on the dole and never been taking any benefits in my whole life. I will find another job, if I don't I can still continue do horses, cows, sheep whatever. I am a farmer.

[ynot slow]

That offer is insulting as others have said.To give you an idea my brother completed his electrical apprenticeship with trade cert,awards etc.His boss offered him to options,employee at $300 per week,or sub-contract to him(boss)for $400 p/w both for 40 hours Mon-Fri 8.00-5.00pm standard day.Off hand the boss supplied sign written van which brother was using,brother paid fuel,oil,tyres,boss paid wof,rego,insurance was 50/50% as technically the van wasn't owned by brother.Any work outside 40hours was still charged at normal rates,unless he was required to work on weekend,then days in lieu.Brother weighed up ACC,tax,fuel,loss of 4 weeks leave and took subby position.This was back in 1984 so $15.00 p/h is crap.He made enough in a bit over a year to go overseas so paid little tax as well.

[The Pastor]

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[davereid]

A narrow escape there, you would have ended up in a very poor financial position, it was a shocking contract.

As an employee you would have been entitled to 4 weeks leave, sick leave, and your ACC and tax would have been paid on your behalf, without you needing a tax professional to do it for you. You would also have been paid for 11 statutory holidays, or recieved extra pay if you were required to work them.

Assuming ACC at 3%, 4 weeks annual leave, one weeks sick leave, and 11 statutory days..

Potential year 52 weeks
less leave 47 weeks
less stat days 45 weeks

actual employee hours = 1800, but paid for 2080

So an employee with an hourly rate of $13 would gross $27040

A contractor at $13 would gross $23400, but have to pay ACC at $700 so would start for $22700

Or way way less than the minimum adult wage.