Contracting vs permanent roles: pros and cons

We’ve all seen the seemingly glamorous images on social media of self-employed contractors who work from all sorts of exotic locations.

But are these idyllic images a true representation of what it’s like to leave the office, the boss and the salary behind for a life dedicated to chasing contracts? We look at the pros and cons of working for yourself.

Permanent roles

The benefit of working a permanent role is largely in the job security this gives you. Your job description dictates what your job is, and all you have to do is fulfil those requirements to a high standard - while someone else organises the regular payments that land in your bank account.

It may also be that you work better in a team, rather than being your own boss, your own employee and your own motivator.


  • Stable, regular income

  • Employer benefits such as health insurance and employer KiwiSaver contributions

  • Someone else works out your tax, holiday pay and other paperwork

  • You get sick pay and holiday pay

  • You have workmates, a team and (hopefully) moral support

  • There are potentially opportunities to grow within the company.


  • There may be less scope for flexibility in working hours

  • Lower potential to pick and choose your tasks/jobs to suit what interests you

  • Lower money earning potential than contracting

  • Commuting

  • Less control over changes to your career path if you are tied into a fixed-term position


The most important attributes for a contractor have to be self-motivation and proactivity. Motivation is needed on a daily basis, particularly if you are working alone, just to earn that day’s income. Being proactive is essential to landing contracts, executing pieces of work without guidance and finding more work to follow.

Unlike a workplace that is owned by someone else, and a regular salary that lands in your bank account with income tax already deducted, these tasks are all down to you.

But on the flipside, you too could become one of those people who work in social media-worthy locations and, if you do it right, find more time to enjoy life and family.


  • You get to be your own boss

  • Flexibility to fit around your lifestyle, be it family or travel or both

  • Greater money-making potential

  • Take on work that fulfils and interests you

  • The harder you work, the more reward you get

  • No need to deal with office politics, looming restructures and listening to your workmate’s latest dramas as she relays them on the phone to her mum every day

  • What money you make, besides tax, is truly for you and not for someone else’s corporation or company

  • If you can work from home, you’ll save money on significant overheads and other factors like daily commuting - maybe even childcare, if you’re ace at multitasking - and you can claim on expenses

  • Contracting can offer more variety in your work


  • Uncertain and potentially irregular income

  • Lower job security

  • Constant need to ensure you have the next job lined up

  • You have to manage your own invoicing, paperwork and taxes (or hire an accountant)

  • No holiday or sick pay. No work means no pay

  • Taking work on at short notice and working erratic hours may be necessary

  • Working hours beyond the agreed rate just to get the job done

  • Pay for all your own equipment

  • Feeling isolated without a team around you

  • No back up safety net income if things don’t quite go to plan