6 reasons to become a contractor

Thursday 31st July, 2014
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Contractor Info

For some, the world of contracting can be a very daunting prospect because working in this way can bring with it challenges and risks, but for many the positives of working in this way far outweigh the negatives.

If you operate as a contractor you are essentially selling your skills and working for a fixed period of time under a contractual basis, usually at an hourly or daily rate. The demand for contractors has continued to grow with many businesses increasingly looking to draw upon the skills of contractors in order to become more flexible and thus remain competitive.

So, if you're still undecided about whether to go permanent or contract, here are 6 reasons why becoming a contractor might be the best fit for you.

  • Greater flexibility

Traditional employment usually dictates a very set way of working as your day-to-day working routine will have little variation and you will be expected to work set hours with little flexibility.

However, when working as a contractor you may have the ability to dictate greater flexibility with your working hours, which is especially beneficial for parents who are trying to juggle work and family life.

You will also find that you move between different industry sectors, allowing you to continuously build your skills set and develop your knowledge from a variety of companies and roles.

  • Financial benefits

For the most part, the average wage of an umbrella or limited company contractor tends to be higher than that of a permanent employee. This is because when clients look to use a contractor, it is to fulfil a particular business need, generally for a specific project that requires a specific skill set, so they will pay extra to gain access to the necessary flexible resources. If your skill set is particularly niche or highly sought after you will also find that you have greater leverage when negotiating higher pay rates and better conditions.

However, it is not just higher salary expectations, but a contractor's ability to claim expenses that leads to higher take-home pay. This is because when working as an umbrella or limited company contractor you are able to offset allowable business expenses against tax. Also when contractors choose to work through a limited company they can draw some of their funds as a dividend rather than being paid a full salary, so their overall tax burden is reduced.

If you'd like to see how your take home pay could be increased by working as a contractor visit our online take-home pay calculator.

  • Greater autonomy

As a contractor you will have the ability to dictate when, where and how you work, leaving you free from the usual constraints you might experience as a permanent employee. With this control comes greater motivation as you will find yourself doing roles you actually enjoy.

  • Greater career prospects

Unlike traditional employment, as a contractor, you are not tied to a single company or industry. This invites a lot of opportunity to network and build professional relationships.

The variety of roles and companies you will take on builds a greater diversity of skills and work related experience, further enhancing your CV and potential work prospects.

  • You are still entitled to a lot of the benefits experienced by permanent employees

    You may think that when moving to contract work you lose the statutory benefits that are enjoyed by permanent employees, however this isn't the case for umbrella company contractors. When working in this way, because you become an employee of the umbrella company, you are still entitled to statutory benefits such as sick pay and maternity pay, alongside auto enrolment into the work place pension scheme.
  • Avoidance of office politics

    Most permanent employees, whether they want to or not, find themselves becoming embroiled in office bureaucracy and politics. For many this can become very demoralising.
    As a contractor you are, for the most part, able to avoid this. You are judged entirely upon your skills and work output. Your focus is to complete the task you have been brought in to do and not to worry about becoming emotionally involved.

Of course, there are other factors to consider when entering the world of contracting. The uncertainty of always having work lined up means that as an individual you have to be in position to occasionally take risks. However with its higher pay rates, greater flexibility, increased autonomy, and the chance to gain new experiences and in turn achieve greater work fulfilment, becoming a limited or umbrella company contractor has never looked so attractive.



As a contractor you will have the ability to dictate when, where and how you work, leaving you free from the usual constraints you might experience as a permanent employee. With this control comes greater motivation as you will find yourself doing roles you actually enjoy.