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What is the Difference Between an Employee and a Contractor in New Zealand?

For a very long time, there is a stark difference between a contractor and an employee. As a job seeker, you will have to choose between these two professional options. Let's take a look at the features of each one of them and what are the gains and ventures of each in New Zealand:

Contractor Vs. Employee in New Zealand:

contractor vs employee

New Zealand is like any other country. It has its promising lifestyle, a welcoming sphere, and encouraging investments. However, if you are going to move to New Zealand, you should consider your professional future. Would it be safe under a working contract? Would your rights be guaranteed as a self-employed contractor? What type of applicants should be eligible for contracts and public employment? Fratres provides answers to the frequently asked questions, explaining the cons and pros of each professional choice. If you have any queries related to your dream job, you should sign up to Fratres and explore its career advice. 

 Unfortunately, contractors in New Zealand are negatively viewed for not securing a stable job like a public sector employee. But, some people do not realize that a contractor has some specific advantages that employees in the public sector may not have. So, let's establish a comparative column to show the differences.

Contractor Vs. Employee Inland Revenue Division (IRD):

There is a "default" definition stating that contractors are fewer beneficiary professionals.

  • They can be dismissed at the probationary period/ trial period.
  • They are excluded from state holidays
  • They do not get an automatic promotion at work.
  • Employees' benefits do not cover them. 

Despite these four unfortunate facts, contactors have the following advantages that employees do not get:

Contractors can have multiple jobs simultaneously: contractors can have more than a job entitled to the private sector and reconcile between consulting and tutoring, journalism, and outsourcing jobs.

-Contractors can renew their contracts: in case of being well settled in a job, contractors can renew the contract and add new agreements related to wages and schedules.

-Contractors get extra payment for performance and achievements: unlike employees paid for total work without extra additions for professional milestones, contractors are having motivational payment, in case of working extra hours or contributing to the company's advancement.

-Contractors can have sector-related benefits: contractors operating in specific industries can get gifts from that industry. For example, contractors operating in retail markets can have discounts on products and gifts from the market. Take a look at; What are Workplace Exposure Standards in New Zealand?

-Contractors can be from another country: immigrants looking for job opportunities in New Zealand are usually entitled to specific contracts.

-Contractors can be self-employed: contractors can launch their own investments in New Zealand and manage their projects.

-Contractors can operate in the public sector: many people think that civil services only hire local citizens. However, exceptions also exist in public sectors such as hiring foreigners for teaching, nursing, and medical jobs in New Zealand. These fields can invite contractors for a limited time and in specific cases.

-Contractors can have accommodation jobs: employers who hire contractors can ensure residential benefits for them, especially if they are immigrants and need a stay-in job.

-Contractors can build bridges for third-party business projects: contractors that usually operate as ex-pats in New Zealand can establish business ties between their New Zealand business owners and workers in their homelands. They can help in outsourcing projects and work on behalf of small companies settling in New Zealand with affordable costs.

Contract for Services in New Zealand:

contract types in NZ

Many contractors operate in service jobs such as social assistance, tourism, and customer service. They work through a contract that highlights these rights:

-The duration of the contract: depending on the type of service, the duration varies and may have a flexible schedule

-The nature of the job: a service contract defines the type of work, be it permanent, full-time or part-time, occasional or seasonal.

-The wage and payment: the contract includes salary arrangements and the type of payment.

-The promise to escalate in rank: in case of aiming for a better opportunity under a work contract, employers explain how you would advance in your career, what type of requirements you would have to reach promotion at work. How to get a Promotion from Your Employers?

- Penalties and policies: contract work includes the limits that lead to dismissal and penalties in crossing the rules.

Mandatory terms of independent contractors:

Independent contractors are also contractors engaged in self-employment and work independently in joint projects. Their employment agreement may have extra exceptions to define their rights. it includes:

The company/ organization for which the contractor is recruited.

The definition of the position held,

The date of recruitment and the end of the contract,

The terms and conditions

the salary, commissions and benefits

Employees Vs. Contractors Salaries:

contractor vs employee salaries

There is a stark difference between payments between contractors and employees. Each sector has a definite salary rate. Concerning employees they have a salary, including tax reduction and pensionable service, paid holidays and leaves. contractors, on the other hand, have service-rated salaries. Depending on the service they make, they can claim the compensation. In some sectors, salaries can increase for contractors significantly if the performance rate has increased or a professional milestone is achieved.

These were the differences between employees and contractors in New Zealand. For more information on careers in New Zealand, visit Fratres and get updated on your dream job's recent entry requirements and merits. 

 

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