Skip to main content
Contractor Management

Contractor Management – What is it? How does it work?

By 21 November 2014No Comments

‘Contractor Management’ is a term which is thrown around a lot, but do people really know the meaning or benefits? Contractor Management quite literally means the managing of contractors business affairs on behalf of the contractor/the organisation which they are contracting to. There are specific companies, like Pendragon, that specialise in this area and act as a surrogate employer for a contractor.


Contractor Management Companies are useful for both independent contractors and companies alike.


With independent contractors, freelancers or consultants, it allows them to solely focus on their current contract and core skills while all their administration and office management gets taken care of. Independent contractors usually have to run their own ABN, which comes with a number of other responsibilities and additional hassles. Usually Contractor Management Firms can offer an alternative solution to working through their own ABN stressed-woman-at-work-paperwork whilst still allowing them the benefits of being self-employed. Without the ABN, contractors are free from GST/BAS reporting hassles, giving them piece of mind and saving them quite a bit of time.


Contractor Management Companies also eliminate the need for the contractors to raise and chase invoices themselves from the entity they are providing their services to, plus under most contractor management companies it eliminates the 80/20 PSI ruling.


For companies, it alleviates some of the liabilities and costs associated with running contractors and allows for a more controllable and flexible workforce. Contractor Management Companies also provide workers compensation, professional indemnity and public liability insurances which is a bonus for both the companies and the independent contractors.


Some Contractor Management companies also offer Salary Packaging options – meaning the independent contractor usually gets more net pay at the end of each pay cycle through legitimate tax minimisation.


In the end, Contractor Management Companies eliminate the need for the contractors to do much paperwork, usually resulting in more free time for the contractors, as well as the money they will save from not having to pay for the relevant insurances. From the companies point of view it saves time/money processing individual contractors pays and adds value to their operation or clients as they can upscale or downscale when appropriate making them competitive in the marketplace.


If any further explanation or understanding is required please do not hesitate to talk to us…


Purnima Kabra