Advice on "overemployment" potential?

[maluchristian]

Hi PFNZ whanau,

Throwaway account in case my old/new bosses are on here. I've worked in IT for over 15 years now. Recently, with COVID lockdowns I have been able to find remote work and try my hand at being a contractor. The past year has been easy cruising, but have had a recent shake-up recently. I am hoping for advice!

I need help on potentially becoming "overemployed". Here's the situation:

1. I work at Company A as a self-employed consultant. They told me 2 months ago they might not renew my contract once expired (expires this month) because the project I've been working on has run its course.
2. I go on a job-hunting craze as I can't afford to be unemployed. People rely on my as sole breadwinner. Animals too lol
3. I found Company B and C after 1.5 mos. They have both offered me a full-time permanent PAYE job this week.
4. Today, Company A told me they want to sign me on for another 12 month contract. New project, they didn't anticipate they'd get funding but did.
5. All three companies are fully remote/work from home.

Here are some numbers:

Company A:

$170k/year pretax. No benefits, no KiwiSaver, and I do my own taxes. I still get paid sickies and paid-time-off and I get to deduct expenses though, which are nice.

The type of work I do here can realistically be done in 4-5hours/day. They trust me there and I am well-respected.

Company B:

$140k/year pretax. Kiwisaver match and I am a full-time employee. Based off the interviews, they're a fast moving company with lots of work and not too many people to do it. I might need to work a full 8 hours in this company. It is well structured and established. They work different projects in a wide scope. Getting a 'toxic work culture' vibe from the interviews.

Company C:

$130k/year pretax. Same as Company B - I will be a permanent employee with usual perks. Based off interviews, they are a very small team wanting to scale. Not too much structure, trying to figure things out, but need all the help they can get from experienced people like me. They have a narrow scope of work. Based on the JD, I might be able to complete work in 5-6 hours a day.

Now, I am torn. I would have happily continued coasting through Company A had they not told me I might not get renewed for my new contract. Now that I have options, I am confused.

Considering I can do work for Company A in 4 hours a day, I might be able to pull off signing up for Company C and be overemployed. But what would that mean in taxes? Also, will they find out I am still consulting (considering I will have to give them tax code ST, which is for secondary income?) I could really use the extra income as we've always wanted to buy a home and it's been hard saving considering so many human (I support my family and extended family with health issues; it's complicated but rest assured I am not being taken advantage of) and furbaby mouths to house and feed.

I have never done anything like this before and I feel (kind of) dirty doing it? I'm a real stickler for the rules, but I am out of my element here.

Should I ignore Company B and C, just focus on A and pretend I never got those offers?

Your advice is very welcome!

 

[lex123]

@maluchristian Heres the simple answer.

1) Ignore Company B - Thats a no.

2) Take up company A's offer. It's too good to give up. Be honest with them & say that you are also wanting to explore Oppurtunites for secondary projects/consulting works etc. Rest assured it wont impact your deliverables and normal day to day job.

3) Be honest with company C and tell them you have a gig & can help out x hours a day as a contractor. Come to an agreement - problem solved.

 

[superduck]

@lex123 Good advice. I think people underestimate oe, it's pretty easy to tell when someone is doing it and it'll be a breach of any perm contract. You only need a couple of meeting clashes and it would get obvious so... go honest and at the end of the day who wants to play the top bracket if option c falls through

 

[anthonywaynepalmer]

@maluchristian If I were you, I would go with an honest approach. Take company A up, it’s clearly the best deal. No point in engaging with company B.

Then be honest with C, you have a contract at another employee that is a better deal. But you are open to X hours per week contracting. They may look at restructuring the role if they like you enough.

That way the potential issues are vastly less. As a consultant in NZ your reputation is extremely important and I wouldn’t want to risk it. Just too small a place. But this way best case you get the upside without the risk.

 

[maluchristian]

@anthonywaynepalmer Thank you very much for this advice. I'm going to go in this direction and just be honest. If C decides to pass, then I'll have lost nothing but probably gained a good contact. If they do engage, then I can operate with peace of mind. Thank you, Captain!

 

[anthonywaynepalmer]

@maluchristian Hey! Using Reddit for good. It can happen.

Good luck with the negotiations

 

[manuele]

@maluchristian New Zealand is small much higher chance of getting caught than in the US where it’s more popular.

Take into account BD, seems like A is a pretty good gig all the benefits of being a contractor and employee in one

 

[inquirer17]

@maluchristian Doesn't pass my red face test.

It's a small country. I suspect that the companies offering to employ you would not be stoked if they knew you were working 4 hours a day somewhere else. Word would get around. Why not tell them and see if they are still interested in employing you as a full time employee? I think I know what the answer will be. Alternatively, offer to work for them as a consultant for 4 hours a day? They might be pretty keen for that, or at least to try it out and see how it goes.

 

[maluchristian]

@inquirer17 Thanks for this. I'm curious - What is your 'red face' test?

 

[inquirer17]

@maluchristian If people found out, would you be embarrassed? A fairly good rule to play by for commercial decisions in a small market.

 

[maluchristian]

@inquirer17 Ahhh. That makes a lot of sense. Wisdom from a stranger. You rock, thank you very much.

 

[daveedg9]

@maluchristian I would go with A and not bother with C.

A has good salary, you know the team etc and you dont need to work long hours. Sounds like a good gig especially now it wil be a 1 year contract.

Im actually looking for an A gig myself so if you don't go for it, let me know

What area of IT are you in and how do you find contracting vs full time employment. I would have thought contracting would be more work and you would need to fill in timesheets etc

 

[cleannie]

@daveedg9 I'm curious about this as well. Also looking for an A type job in the next year or so.

 

[earlene]

@daveedg9 You generally have to fill timesheets ass a contractor (even if only to the agency), but depending on the company then you're generally treated as adults and not micro managed. Can see how working 2 jobs could be done remotely!

Only problem is if meetings clash, what happens then?

 

[jason123]

@maluchristian It's not uncommon for companies to not have even started thinking about a renewal until the last minute, so 2 months heads up that you may not be renewed AND coming through with a renewal as a Contractor is excellent. They like you and your work.

If you keep contracting, get at least 6 months' expenses saved up ASAP. Your family & mental health will thank you for it.

 

[tearikk]

@maluchristian I was in a VERY similar scenario recently and chose A only. I use the spare time for (in no particular order)

- Upskilling/learning about new tech

- Networking: meeting potential clients and new people who are interesting and / or may help my career in future

- Doing research/market validation on a couple of business ideas I'm exploring,

- Family stuff

 

[charlyrich]

@maluchristian Here's the fun part;
If you accept company C you go for M tax code. It is your only paye income and not a secondary job.

A is contract so self employed, even if wt deducted doesn't change C tax code.

I'd avoid B for toxicity personally.

Can you comfortably do A and C and keep both happy without burning bridges.
Will A have another contract role in 12 months?
Or is security of C more ideal now.

A will basically all be taxed at top tax rate.

 

[cbonetwobe]

@charlyrich Tax codes don't make any difference. You're taxed on your total income.

Even if they get it wrong week by week and under or over tax you, it will get fixed at year end.

 

[charlyrich]

@cbonetwobe I know you're taxed on total income, I work in the industry.

Ird will tell your employer to change the tax code direct if it's wrong, which will signal to the employer theyhave another job.

That's what they don't want to happen, but can't control that.
Yes, I see that happen every month for people.

Everything in my original post is correct with IRD.