A First Timer’s Guide to Contracting

Guide to Contracting For First Timers

There is a rising interest in working as an independent contractor, and many companies are looking to hire temporary or part-time freelancers instead of full-time employees. If you are thinking about becoming a contractor or freelancer and offering your services to businesses in your field, then we have a quick guide to help you with the initial steps.

Why become a Contractor?

An independent contractor is essentially a self-employed worker that offers their skills and services under contract to a company.  This is an attractive role for many people, and there are many good reasons to become a contractor and forego the benefits of being an employee, including:

  • Flexibility in work schedule and volume, so you can plan your schedule and time off when it fits into your personal life.
  • The ability to set your own pay rates and change them when you need to, based on demand and availability.
  • Depending on your field, it may be possible to live anywhere and deliver services remotely to clients, such as in the IT or creative professions.
  • There is no need to follow an office schedule or policy, which may not suit everyone’s personality.

Money – Rate of Pay

As a contractor, you only get paid when you have a client project, and that will depend on the market demand for your skills.  In general, you will get paid more per hour or project as a contractor, but there may also be a time of no work to account for in your finances.

Don’t get lulled into a sense of complacency when you have a lot of work as it will definitely fluctuate, and there may be gaps in contracts.  You will also have to account for your own tax withholding and other payments as an independent business, which has to be figured into the amount that you charge.


Your location is less important as a contractor than an employee, and if you do onsite consulting or projects a willingness to travel from your home city can open up more opportunities. Even if you do work onsite for a client, you are not really involved in the internal office politics or expectations, and can simply do your work to completion.

Contracting is also ideal for remote work roles, and many contractors work from a home office with clients in multiple locations.  It is easier if you are near the time zone of your principal clients for communication and collaboration, but you may have to accommodate the client’s time zone and office hours, no matter where you are located.


Of course, your skills and experience will play a large role in your success as a contractor, and you have to evaluate the type of demand there is and the competition.  It can be a good strategy to have several areas of expertise to offer, either to a single client or to several at one time.

As the popularity of contracting increases, you may find that the competition becomes stiffer, and you will have to show how your skillset is unique and worth what you charge.  It may even be worthwhile to develop new skills or technical abilities to improve your stature.

Planning for Time Off

Believe it or not, getting time off as a contractor can be a challenge even though you are the one who sets your hours and amount of work.  If you have ongoing clients with continual projects it can be difficult to carve out vacation time or even a full weekend.  The key is to plan time off ahead and communicate with clients early on the dates.  That way, they can adjust their timeframes and project needs.

Time off is important since one of the trends in contracting is the tendency to overwork and suffer from burnout.  In most cases, your clients will respect your need for downtime and will be willing to accommodate you.

Sourcing for Contracts

Finding clients and contracts is probably the number one priority for a new contractor.  You can use agencies that handle freelancers as one approach, or even contact former employers who know your ability and may have occasional projects.

A growing source for new contracts are third party web platforms that allow you to post your skills, history and availability for potential clients.  You can also search for posted client projects, and make a proposal.  They all charge a fee, but these freelancer sites are a popular alternative to traditional methods.


Your CV for contracting is different from that of an employee seeking a position.  You really need to highlight the skills and experience that relate to the project, and some items such as old job history or memberships are not as important.

The interview is usually over the phone unless it is right in your own city, and that will be your one chance to sell your skills.  It is also your opportunity as a contractor to confirm the project parameters, pay rate and deadlines, to make sure that the job is a good fit.

Models of Contracting

Because you are an independent business owner, you have two options for contracting.  The first is through a third party “umbrella” organization.  They will essentially employ you, and handle all of the contracting and paperwork on your behalf.  They may charge up to 10% for this service, so build that into your contract proposals.

The second option is to contract directly with the company and handle all of the paperwork and withholding on your own.  If you choose this route then be sure to have a firm invoicing and payment system in place.  Using an escrow payment system on freelancer web platforms can help ease your mind on the payment of invoices, although they will charge you a percentage for this service.

Contractor Taxation can help you with many aspects of your new contracting role, so please contact us if you have questions or need guidance.