All About Contractor Work: What It Is, Pay, and More

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Are you tired of working nine-to-five every day, all year long? Then working as a contractor may be the right solution for you. What is a contractor?

In this article, we will explain what a contractor does, how much they are paid, and how it can benefit you to work like that. Stay tuned.

What Is a Contractor?

Contracting is one of the most attractive forms of self-employment, and it has long been widely accepted as an alternative to a full-time job. But what’s a contractor, exactly?

A contractor is an individual who offers his service and skills to companies for a given period of time. A contractor is responsible for supplying the needed materials, tools, as well as taking care of everything happening on the site. They are usually self-employed individuals, but, in some instances, they can be a part of their own limited company. Contractors can also be employed by an umbrella company or an agency.

A contractor is not a regular employee; they work on a contractual basis. Contractors are not obliged to take on any project if they think it is not worth taking or which is simply not in their area of expertise; they can decide on the spot whether to accept the project offered or decline it.

DID YOU KNOW: When hiring a contractor, just as with regular employees, the employer needs to conduct a background check to make sure the contractor has the expertise he claims to have and does not pose a threat to others.

What Does a Contractor Do?

Someone who is a contractor is responsible for the project planning, shows leadership abilities to coordinate a team, and needs to be able to enforce strict discipline among the workers. Among many other responsibilities, a contractor is also responsible for the financial details (equipment costs, the price of the materials needed, paying subcontractors for their work) and the documentation, as well as calculating the possible risks that may occur during a project. But what does a contractor do besides the points mentioned above? Some further things include:

  • directly communicating with the clients
  • listening to their wishes and complaints and advising them in making the right choice
  • acquiring permits and licenses needed for the project
  • managing the workers

Involved in any decision-making situation, contractors are basically involved in everything happening on the construction site.

When talking about what contracting is, many may wonder which industry hires contractors. One thing’s definite – the construction industry prefers to hire contractors. One might even argue that when learning about starting a construction company, understanding what a contractor is is mandatory. Such companies opt for contractors solely because of the benefits the construction company gets (no tax calculation, Social Security numbers, etc).

DID YOU KNOW: When looking at contractor job description templates, the most sought-after attributes include: skilled, responsible, and having leadership abilities.

What Are the Different Types of Contractor Jobs?

We all want to hire one person who will successfully get the job done. In reality, most often it takes an army of people with specific skills for the process to run smoothly. The most common type of contractors that are key in homebuilding are:

General contractor

A general contractor (GC) is the one left in charge of hiring, managing, and basically dealing with everything going on on the site. In a way, a GC is the acting project manager when a building is being built. He is also the one who communicates with the project owner.

Electrician

An electrician’s duties include installing wires, outlets, lighting, etc. throughout the building. Some contractors specialize in installing particularly complex systems. Because dealing with electricity is a risky business, hiring a professional electrician is important to ensure the safety of everyone on the construction site. While many types of contractor licenses exist, electricians need to obtain a Class C electrical contractor license.

Carpenter

A carpenter is an individual who has amazing woodworking skills and is responsible for everything wood-related during and after the construction of the building.

Painting contractor

Once the building is finished, you need to paint the walls, ceilings, etc. That’s where a painter, another specialized type of contractor, comes in.

Mason

A mason deals with any stone-related work, from building patios to installing fireplaces or marble countertops.

Roofer

Roofing contractors are those that deal with roofs. They are the ones who are involved in the building and repairing of roofs.

Plumber

A plumbing contractor is a type of contractor that has expertise in several areas. Some of them are installing water supply pipes in bathrooms and kitchens, as well as being responsible for gas delivery in commercial and residential buildings. He is also an expert in unclogging pipes, fixing refrigerators, etc.

HVAC

HVAC systems are designed to make you feel comfortable in your home. HVAC contractors are in charge of setting up or repairing the heating and cooling systems (central heating/ air conditioning).

DID YOU KNOW: Licensing for general contractors usually varies from state to state. Each state has its own requirements; one of them determines how long a contractor has to work in a particular field.

Key Takeaways

Contracting is one of the most popular forms of self-employment.
A contractor can have numerous responsibilities, depending on his sphere of expertise.
Construction is in the top 10 fields that prefer to hire contractors instead of full-time employees.
There are various types of contractors; some contractor jobs include plumber, electrician, roofer, etc.

How Much Does a Contractor Make?

If you decide in favor of contracting, you should have some idea about how much money you’ll make. The great news is that contractors are generally well paid, and in most cases, earn more than full-time employees. This is because working as a contractor has three major advantages:

  • contractors usually charge more (the average hourly rate is $50)
  • they are exempt from some taxes
  • they can deduct their expenses

But how much does a contractor make on average? When it comes to salaries, you need to consider various factors (location, expertise level, etc.).

Usually, if the contractor works 40 hours a week, the hourly rate is $50. That said, the estimated annual salary of a contractor varies from $70,000 to $95,000 according to The Bureau of Labor Statistics (BLS). It could be more once you’ve made a name for yourself and have an established professional reputation.

DID YOU KNOW: A contractor’s salary is not fixed. The more experience the contractor has, the more money he can make.

Benefits of Working as a Contractor

Working as a contractor comes with many benefits. One of them is that you don’t need to sign a contract longer than six months and that you can choose which projects you want to work on. Below, are five more benefits to consider:

Be your own boss

What you got to love when working as an independent contractor is the freedom that comes with it. Every success and failure is your responsibility. So, how do contractors work? They decide how, for whom, and for how much they are willing to work, which offers great independence. However, as tempting as this may sound, it requires a good balance between taking on too many projects and not finding enough projects to cover all your living expenses.

Flexible working schedule and place of work

It’s amazing to have a flexible working schedule – you can work 10 hours one day and 2 the next one. The way you plan your time is left entirely up to you just as long as you meet the given deadlines.

Earn more money than regular employees

Now that it’s clear what’s a contractor got to gain from working independently, let’s look at the financial side of the question. On average, contractors tend to make more money than regular employees.

Working as a contractor means that you work at an hourly rate. Simply put, the more hours you work, the more money you make. And on top of that, if you are a highly skilled contractor, your income could be even higher than average.

Pay taxes differently

Since contractors are self-employed, the employer doesn’t withhold their taxes. You still pay taxes; you just pay them in a different way. Contractors pay taxes four times a year with the advantage that some expenses can be deducted from your taxes (internet and phone bills, office expenses, travel expenses, etc.)

Possibility to try new things

Working as an independent contractor allows you to have more freedom in managing your time, and it also gives you the possibility to find your own area of expertise. Trying various jobs during the first couple of months when you are just starting as a contractor can prove beneficial.

Furthermore, one thing not often mentioned in the contractor job description but vital for the job is the need for good communication skills. By working on various projects, you not only gain experience in the different aspects of the construction business, but you also grow your contacts network and get experience in working as a team.

DID YOU KNOW: As a contractor, you are not bound by a regular contract of employment, meaning that you can work for more than one client, as long as you manage to finish the projects on time.

Contractor vs Subcontractor – What Is the Difference?

Many have heard both terms, so let’s take a look at the actual difference between contractor and subcontractor. A contractor is an individual or company hired to employ their skills and abilities on behalf of the company that hired them. Usually, a contractor is the one who has more on-site responsibilities. They can either be self-employed or work for an agency or a company.

The chief difference between the contractors and subcontractors lies in the hiring hierarchy: a contractor is hired by the client or a company, while a contractor can then hire a subcontractor if necessary. So, what does a subcontractor do, exactly? The job description is more or less the same as a contractor; it can be in a sphere that the contractor’s expertise doesn’t cover. For example, a plumbing contractor could find an electrician subcontractor to get the entire job done.

DID YOU KNOW: Both contractors and subcontractors need to have insurance to cover the risks associated with their workplace.

Conclusion

Now that you know what is contracting and understand the difference between employees, contractors, and subcontractors, you can decide whether it’s a good way of working for you. There are many benefits to working as a contractor that might be the perfect fit for you. Give it a try!

FAQ

What is an example of a contractor?

A plumber who has his own business providing his services while employing others to work for him on projects is a perfect example of a contractor.

How does an independent contractor get paid?

An independent contractor can get paid in different ways, depending on the contract between the contractor and the client. Usually, contractors are paid hourly.

What is the role of a contractor?

What is a contractor and what role does a contractor play in the business industry, you may wonder? A contractor is self-employed, takes on projects from various clients, and is the one responsible for getting the job done. He can hire subcontractors to do so.

ABOUT AUTHOR

I’m an entrepreneur by profession and an artist by passion. I do business to pay the bills and make music to bring the thrills. Thanks to a bachelor in Business Administration, I'm well-versed in all things business. Owning a construction company certainly helps, too, but it also brings out my love for building and home protection.

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