diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
new file mode 100644
index 0000000..b7ae27e
--- /dev/null
+++ b/CONTRIBUTING.md
@@ -0,0 +1,24 @@
+# Contributing
+
+Thanks for your interest in improving the PostHog PHP SDK.
+
+## Development setup
+
+1. Install [PHP](https://www.php.net/manual/en/install.php) and [Composer](https://getcomposer.org/download/).
+2. Install dependencies:
+
+   ```bash
+   php composer.phar update
+   ```
+
+3. Run the test suite:
+
+   ```bash
+   bin/test
+   ```
+
+   This script runs `./vendor/bin/phpunit --verbose test`.
+
+## Pull requests
+
+Please follow the existing project conventions and include tests when you change behavior.
diff --git a/README.md b/README.md
index 460a060..0cfe366 100644
--- a/README.md
+++ b/README.md
@@ -63,9 +63,7 @@ Auto error tracking is off by default. When enabled, the SDK chains existing exc
 
 ## Contributing
 
-1. [Download PHP](https://www.php.net/manual/en/install.php) and [Composer](https://getcomposer.org/download/)
-2. `php composer.phar update` to install dependencies
-3. `bin/test` to run tests (this script calls `./vendor/bin/phpunit --verbose test`)
+See [CONTRIBUTING.md](CONTRIBUTING.md) for local setup and test instructions.
 
 ## Releasing