Contractor Tips
on April 14, 2022 / by Kamal Kataria

Becoming an IT Contractor: Everything You Need to Know

Over the last few years, there has been a significant change in the world’s workforce. Thousands of professionals are leaving their full-time jobs in favor of independent careers as contractors and freelancers. The IT industry has been uniquely impacted by a move to more contractors than ever before. 

The impetus behind “The Great Resignation,” varies from industry to industry. Lack of mobility, a desire for a better work-life balance, unhappiness with career development and support. There are myriad reasons for choosing a career as a contractor. But across the world, IT talent is redefining the industry and taking back control of their professional lives. 

No matter the reason for choosing the contractor life, the benefits for talent are powerful. So, if you’ve been considering a switch to contractor work in your IT discipline, this article will help you make your decision. 

What it’s Like to Be an IT Contractor

If you’ve been thinking about becoming an IT contractor, you’ve probably been dreaming of what it’s like. Lots of free time to binge Netflix, lounge by the pool, or finally learn to play the guitar, right?

Well, not quite. Contracting work can be a challenge. Depending on the contract, the projects you work on can be intensive. You’ll still need to complete objectives on time and build a reputation for producing great work. 

However, working as a contractor does afford you some advantages over working in the office. For one, you can set up your office just about anywhere. Whether it’s traveling the open roads in an RV or a quiet spare bedroom in your condo, you’re not stuck in a cubicle or office setting. 

And contracting does afford you some extra free time that traditional work does not. For one, you won’t have a commute to worry about. You won’t spend hours on the freeway driving to and from the office. Plus, with so many of us working from home these days, you’ll have more time to spend with family. 

The Pros of Becoming an IT Contractor

  1. Earn more money

For many would-be contractors, the first benefit on our list is the most important. You can usually earn much more money than working in a traditional full-time position. 

That’s because most companies are willing to pay more for contractors than they are for regular employees. Contractors mean lower overhead for businesses, so they can reinvest some of that recouped cost and funnel it toward talent. 

As a result, IT contractors can earn more than their in-house counterparts. While the percentages vary, the average increase can be up to 50%!

  1. Work on exciting projects

Many IT professionals get burnt out by working on boring projects. With contract work, you have the benefit of choosing the jobs that interest you most. 

  1. Flexibility to follow your passion

When you are hired by a firm, you are limited to the types of projects they have in the pipeline. If your true passion is AI, and you’re working for a web development company, you might not be able to explore freely. 

As a contractor, you are not constrained by the limitations of one company. Over the course of your career, you’ll have the opportunity to work with many different brands, and you can seek out the scope of work that best suits your personal vision. 

Some of the Drawbacks

As you can see, contracting work in IT presents a host of advantages over traditional positions. However, there are a few things you need to know before you make the leap. 

Depending on your level of commitment, these may be barriers to joining the growing independent workforce. 

  1. Contracts are time-bound and not permanent

With contract work, you have a little less job security than a full-time role. Most contracts are time-bound - meaning you aren’t a permanent employee. The position might disappear when the project ends, or the role might be eliminated when a certain phase is over. 

This is where working with a recruiting agency can help significantly. 

When you have a partner that is actively searching for new roles, you can gain some peace of mind knowing your next project is right around the corner. 

  1. No employer health or dental benefits

Creating a personal or business budget is a must when starting a career in contracting. One of the items to consider when laying out your plan is benefits. 

Since you aren’t a full-time employee, you won’t enjoy the same access to health and dental as a traditional hire. Depending on where you live, these benefits could be a consequential out-of-pocket expense. 

It’s vital to keep this in mind when you are making your decision. 

  1. No paid days off

Lastly, you need to consider that you won’t have any paid time off as a contractor. 

For some, the work-life balance gained from an independent career isn’t enough to offset the lack of leave. 

Weigh this carefully when considering making the jump. 

Steps to Becoming a Contractor

Convinced contracting is the right path for your future? 

Once you have decided to go this route, there are three simple steps you need to take:

  1. Land a contract role

First, you’ll need to find work. You can pursue your first contract using one of two methods:

  1. Directly approach an employer that hires contractors

This can be tricky, especially if you don’t have previous experience. You’ll want to make sure you are ready to negotiate the right compensation plan for the work outlined in the job description.

  1. Talk to a consulting, staffing, or recruiting firm

Having a trusted advisor on your side is a great way to land the perfect contract. They’ll know the ins and outs of the industry, and be able to negotiate the most lucrative and comprehensive deal for your time. 

  1. Set up your business

Next, you’ll want to incorporate your own business. There are 3 types of businesses to choose from: 

  1. Sole proprietorship

  2. Partnerships

  3. Corporations

Each comes with its own set of pros and cons. Don’t take this decision lightly. It’s vital to choose the best fit for your personal needs from the start. To find out more, check out this helpful article on the types of businesses available. 

  1. Set up an invoicing system

Lastly, you’ll need a way to get paid. 

Finding a platform or free template for invoicing is essential. There are plenty of free options available. However, you may want to consider paying for a service such as Quickbooks or Freshbooks. These tools offer you the ability to automate tasks and track revenue.

Other Things to Consider

  • Depending on the province you live in, you might need to register with the worker's compensation board.

Staying current on your registrations and licensing is crucial to protecting your new business.  


  • If you want benefits like health and dental, consider reaching out to a vendor or broker. Most will have representatives willing to walk you through your options.

Are You Ready to Become a Contractor?

If you’re ready to start your new career as a contractor we’d love to chat. Our experts have been helping IT talent find high-paying and secure positions for over a decade. 

Contact us here and schedule a meeting with our team