Spotlight on contracting: How do I get paid?

If you’re thinking about contracting, either for a few months or as a career, there a few things you need to know and decide before taking that plunge. In our contractor series, we’ll be taking a look at working with umbrella companies, setting up your own limited company, and what impact IR35 will have.

In the first blog of our series we take a look at how contractors get paid.

How do I get paid?

There are three common ways of getting paid as a contractor:


The client will employ you directly on a fixed term contract and will pay you on the same day as the rest of the workforce at you agreed rate. This is a straightforward way of getting paid, but many employers will not want to take on the payroll admin.

Umbrella Company

If you choose to join an umbrella company, they will become your legal employer even though you are working at the client’s site. Through an umbrella company you submit timesheets and get paid weekly or monthly, dependant on what has been agreed.

Working through an umbrella company means you can legitimately offset business expenses against your taxable pay which results in an uplift to your take home pay.

If you fall under the new IR35 regulations that come into force in April 2020, you will need to get paid under an umbrella company.

Limited Company

Setting up a limited company gives you full control of your revenue. Through your limited company you will invoice the agency or end client yourself. You will be responsible for your own tax and VAT returns, plus submitting end of year accounts – many contractors that have a limited company will appoint an accountant.

If you do not fall under the new IR35 regulation in April 2020 you can continue to contract through a limited company.

How do I make sure I get paid on time?

One of the biggest worries when you start contracting is whether you will get paid on time or not. Raising invoices and chasing down payments has the potential to be one the biggest headaches for contractors.

Most clients will be efficient and reliable at paying you on time – however, you may find something might slip through the cracks or a smaller company may not have the system in place to pay you on time.

If a payment has been missed sometimes the quickest way is sending a simple reminder, a phone call or an email is usually enough to get the issue sorted. Invoices may get lost or buried under paperwork, so it is important that you keep a track of the invoices that you have sent and whether you have been paid or not.

If working through your own limited company and invoicing the company directly set reminders in your diary to chase the client after a set number of days – be sure to check your contract for payment terms. It seems simple, but make sure you are raising invoices correctly, labelled with a purchase order number (if required), and sent to the correct contact.

Working with a recruitment agency

If you find your next (or first) contract through a recruitment agency, they will deal with the payment side – effectively they become the client. Here at KDR we pride on ourselves on our contractor care, we aim to make our process as smooth as possible for our contractors to get paid on time.

“You’ve been excellent – never in my 18 years contracting have I experienced a more superior and efficient process than yours” – BI Consultant

Our contract payment process

  1. You will submit your timesheet and limited company invoice – please note the timesheet must be signed by a manager at the client’s site
  2. We will invoice the client based off the timesheet you have submitted
  3. The client will pay KDR Recruitment directly
  4. We will pay you as per your invoice and timesheet

If the client is late at paying us, you will still get paid. We ensure all our contractors get paid within 10 days of the invoice.

“Can I take this opportunity to thank you for all your help to date. I only wish more companies operated in the way that you do.” – Data Management Contractor

Becoming a data, technology and analytics contractor can be a life-changing decision. Hopefully we have answered some of your questions above, it’s always best to do your research before making any decision.

If you do have any further questions about contracting, you can contact Declan or check out our latest roles here.

Read part 2 – Umbrella Company vs Limited Company here

KDR Recruitment is the home of the best data, technology and analytics jobs. For more career advice check out the KDR blog or follow KDR on LinkedIn.

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