Contract vs Permanent Project Roles in Australia: How to Choose

Project, program, BA and change roles in Australia are split between permanent positions and fixed-term or daily-rate contracts. Government agencies, banks and large transformation programs in particular rely heavily on contractors. Both paths can build a strong career, but they suit different people and different life stages. Here is what to weigh up.

How contracting usually works in Australia

Most delivery contractors are engaged in one of two ways:

• Through a recruitment agency on PAYG (labour hire): the agency pays you, withholds tax and pays superannuation on your behalf. Administration is simple, but you usually have less control over how your rate is structured.
• Through your own ABN: as a sole trader or through your own company, you invoice the agency or client directly. You take on responsibility for your own tax, superannuation, insurance and, above a turnover threshold, GST registration. You may have more flexibility, but also more administration.

Some clients and agencies only offer one of these options, so ask early.

The case for contracting

• Higher headline pay. Day rates are typically higher than the equivalent permanent salary to compensate for the lack of leave, job security and benefits.
• Variety. Contracts usually run for months rather than years, so you build experience across organisations, sectors and technologies quickly.
• Focus on delivery. Contractors are often brought in for a specific outcome, with less involvement in internal politics and performance cycles.
• Flexibility. Gaps between contracts can be used for travel, study or family time, if you plan for them financially.

The case for permanent roles

• Stability. A regular salary with no end date makes budgeting, borrowing and planning easier.
• Paid leave and benefits. Annual leave, personal leave, parental leave and sometimes bonuses, salary packaging and training budgets are included.
• Career progression. Promotions into leadership roles such as Head of Delivery or PMO Director are usually easier from inside an organisation.
• Depth. You see the long-term results of your work and build deep relationships and domain knowledge.

Comparing a day rate with a salary

A day rate can look much higher than a salary, but it is not a like-for-like comparison. When comparing offers, account for:

• Unpaid time: public holidays, annual leave, sick days and time between contracts are all unpaid for most contractors.
• Superannuation: check whether a rate is quoted inclusive or exclusive of super, as this makes a meaningful difference.
• Costs: ABN contractors may pay for professional indemnity and public liability insurance, accounting fees and their own equipment and training.
• Utilisation: as a rough guide, many contractors plan on billing somewhere in the low 200s of days per year rather than the full year, to allow for holidays and gaps.

Questions to ask yourself

1. Do I have a financial buffer to cover a few months between contracts?
2. Am I comfortable regularly selling myself in interviews and networking for the next role?
3. Is my experience and specialisation strong enough to be productive from week one, which is what contract clients expect?
4. Do I want to move into people leadership, which is often easier in a permanent role?
5. How do lenders view contract income for a home loan or other finance I may need?

A common middle path

Many delivery professionals move between the two over a career, for example contracting to build broad experience, then taking a permanent leadership role, or going permanent during a period that needs stability. Fixed-term contracts directly with an employer, which include leave entitlements, are another option that sits between the two.

This article is general information only and is not tax, legal or financial advice. Speak to an accountant or financial adviser about your own circumstances before choosing how to contract.

Compare your options: browse both contract and permanent delivery roles on Tech PM Jobs, and use the job type filter to narrow your search.