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Employment Nz Contractor Vs Employee

By September 11, 2023No Comments3 min read

In today`s world, there are two key employment options in New Zealand: being a contractor or an employee. Both have their respective benefits and drawbacks, and it`s essential to understand which one is the right fit for you.

Contractors vs Employees: Understanding the Differences

First things first, let`s define what each employment option means. An employee is someone who works for a company, receives a regular salary or hourly wage, and often enjoys employment benefits like paid leave, insurance coverage, and career progression opportunities. On the other hand, a contractor is someone who provides services to multiple companies, invoices them for their services, and is responsible for their own business expenses, taxes, and legal compliance.

Pros and Cons of Being an Employee

One of the main benefits of being an employee is the security of a regular income and a stable work routine. As an employee, you can also enjoy additional benefits like paid leave, insurance, and retirement funds. However, an employee may have limited control over their work hours, assignments, and career progression opportunities. Additionally, an employee is often more restricted to working for only one company, thus limiting the possibility for diversified work experiences.

Pros and Cons of Being a Contractor

One of the main benefits of being a contractor is the freedom to work on multiple projects and clients at the same time. This can provide for a diversified work experience and potentially higher income than that of a typical employee. Contractors also have more control over their work hours and have the ability to set their own rates and negotiate the terms of their contracts. However, as a contractor, you are responsible for your own taxes, insurance, and legal compliance. Additionally, since contracting work is often project-based, there is no security of regular income.

Which Employment Option is Right for You?

Deciding between being a contractor or an employee largely depends on your personal, professional, and financial goals. Are you more interested in job security, regular income, and employee benefits? If so, then being an employee is the right fit for you. On the other hand, if you prefer a diversified work experience, the freedom to work on your terms, and potentially higher income, then being a contractor could be the right choice.


Ultimately, choosing between being a contractor or an employee is a matter of personal preference and individual circumstances. While being a contractor offers freedom and flexibility, it also comes with added responsibilities and uncertainties around stable income. Meanwhile, being an employee offers security and benefits, but may limit your professional growth and diversification opportunities. So make sure you weigh the pros and cons carefully before making your final decision.


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