One of the greatest benefits of becoming a contractor is the increased pay rate. You could earn more than twice that of someone doing the exact same job as someone in a permanent position. When you take this into account, it’s only natural that you’ll want to get the best possible rate when you start a new contract.
In the following paragraphs we’ll outline the key steps you can take to put yourself in a position to command a higher rate from your next contract.
Not every contract position will allow you to command the highest rate you would like to charge. Therefore, you need to be able to identify the positions that require contractors with a highly coveted skillset because these will be more likely to pay higher rates. There are two broad approaches that you can take to identify such roles.
The first is to monitor the positions in your industry that offer the highest pay rates, there is little sense in mass applying to every position you see on the job boards. It’s useful to read the news and keep up to date with the latest trends in your industry to track the best earning positions. As you identify these you can then ensure that you develop the relevant skills to enhance your chances of winning such contracts.
The second approach is to identify key sectors in your industry. A good place to start would be to find the sectors that have the most contract positions available and to also identify key emerging markets so that you can apply to positions before they become mainstream and competition becomes too intense.
You will only be able to command a rate of pay that is fitting to your skills and experience. Therefore, if you are currently searching for high pay positions but can see that there are holes in your CV, focus on filling them.
Many skills you can develop whilst working on an existing contract, but let’s say you are looking to learn a new programming language, you would likely get more out of attending a course than spending endless hours on end watching online video tutorials. The good thing is that you can claim the cost of the course of an expense, which is then offset against your overall tax liability. Bear in mind that an expense needs to be “wholly and exclusively” for the purposes of your business, so as an IT contractor you can’t claim a physiotherapy course as an expense.
Make sure that you keep up to date with the latest trends in your industry, if there is a new skill that you need to develop to stay on top of your game, do it! By keeping your skillset broad and current, you’ll find those higher paying contract positions to be much more accessible.
Remember that you can charge a higher rate if your skillset warrants it, but don’t skin the client alive. News travels fast in certain industries and your reputation is your single most important asset as a contractor, so it is essential that any rate you charge be reinforced by your skills and expertise.
Once you find a contract position, you’ll need a good contractor accountant in your corner to ensure that you are constantly working in the most tax efficient way possible.
At Contractor Accountants Online, we offer an all-inclusive, fixed-fee service for just £55 per month. We’ll take care of all of your accountancy needs and make sure that there are no nasty surprises along the way. For this low-cost, fixed monthly fee, we offer:
To find out more about our all-inclusive, fixed-fee service, call our friendly experts on 020 7481 4743.
Now that you have a greater understanding of how to get the best rate as a contractor, you might also find the following resources useful: