top of page

4 Things To Consider Before Becoming A Contractor

Before you are tempted into leaving your permanent job and becoming a contractor, there are some things you need to consider before committing to this lifestyle change.

Contracting is a fantastic opportunity for you to take control of your career, and for some people, it’s the best decision they’ll ever make.

Take into consideration these 4 things:

1. Do you have the right mentality?

When considering moving into a contract role, you need to think about your motivations for making this change. It is all about having the right reasons for making the switch. Is it to grow your experience in a new industry, learn and enhance your skills, or achieve a better work/life balance?

Someone is perfect for contracting when they get excited about delivering projects and seeing what the next challenge is. You’ll always want to give the best service to the client and make sure you become an invaluable member of the team regardless of how long your contract lasts.

2. Will you set up as a limited company or use an umbrella company?

Becoming a contractor means that all the benefits you used to receive as a permanent employee, you now have to manage yourself.

Using an umbrella company is one way contractors can get help in sorting all these issues. Umbrella companies can handle things like tax, pension contributions, and holiday entitlement, but this comes at a cost and the umbrella company could take as much as 15% of your salary through their fees.

The other option for contractors is to set up as a limited company. But there are pros and cons too! You’ll take home more money, but you’ll be responsible for things like your own pension plan and submitting your own tax returns. Some contractors even employ an accountant to help deal with the financial side of things. Definitely something to consider!

3. What are the financial implications?

Depending on the role, candidates might need a significant pay increase to help cover additional outgoings and make the switch worth it. Contractors should be aiming to earn at least twice as much as a permanent salary. You might be away from home a lot, and you’re not guaranteed work, so you’ll need this extra money to act as savings to cover additional travel expenses, living expenses and employment gaps. This all depends on your lifestyle!

And don’t forget to check when you’re going to be paid. Agencies will only pay you once they’ve been paid themselves, so if they’re on 60-day payment terms, that means you’ll have to wait two months for your first pay cheque.

4. Do you have all-important soft skills as well as the technical know-how?

Many well-performing contractors will be considered for a permanent role within the company when their contract ends, because of the soft skills the contractors possess. Those skills really set them apart from the rest. A positive attitude and willingness to learn are important soft-skill traits candidates looking for contracting roles need to possess! You should be able to talk to the business, understand what they need, and translate the technical aspects into a workable space that the business can use.

For more in-depth discussion about Scala Contracting or if you're looking for a contracting role, contact


bottom of page