Contracting A to Z

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Hi,

After 8 years as a permanent employee I think it's time to start considering contracting now, especially after finding out that the second redundancy during this year is looming over me. In view of this, I have a few questions that I hope local experts can help me clarifying Basically, what I really need to know is all prerequisites (in the simplest form) for legal contracting so I don't look bad for the taxman (for keeping too much) or the wife (for keeping too little) I know that paying taxes properly is the main duty of every diligent worker, especially if he/she is personally responsible for it. I don't know what other measures are mandatory for a contractor (as pension and insurance are optional) so can the experts please shed some light on this?

I know that you can register your own company but that's hardly the easiest way. The alternative is to find an umbrella company that would "hire" you and do the payroll/taxes. So I work either for myself (my own company) or for the umbrella company? Only these two options, right? Sorry for stupid questions but I just want to get it right as, again, any mistake with the taxman could be costly. I read about becoming self-employed (http://www.citizensinformation.ie/categories/employment/types-of-employment/self-employment/self-employment-as-an-individual)
and it doesn't look appealing so I'd go for the umbrella option. The obvious choice for it would be recruitment agencies and most of them, I presume, do provide this service. The question is - how much they charge? I heard something about a hundred or two Euro per month - is it correct? So if an agency finds me a contract, they can then "hire" me and subcontract to a real employer? Just curious what would be the real expenses in this case?

Say, the pay is E300 a day. What I need to pay is income tax and PRSI - correct? But how the tax rate is calculated if that's not a permanent job and so can be for a very short period? I mean, permanent jobs are always quoted per annum but contracts could be for weeks or even days and properly assessing a yearly equivalent could be tricky. If I work one month for X Euro it would be foolish to assess my tax rate based on the X * 12 figure because I may never work that year again (intentionally or unintentionally). So how the tax rate is calculated? I mean, when I'm not self employed (where taxes are filed in the end of the year) but working under the umbrella?

For example, if I just work one month under the umbrella on the above E300 daily pay, how much would I get in the end of the month? The gross is, roughly, E6000 (20 days @ 300) but I have to subtract, at least, the following three: 1) income tax, 2) PRSI and 3) agency fee. Any idea what to expect ending up in my pocket?

OK, now let's say I do work the whole year on the same rate which makes 1500 (5 days @ 300) * 52 = E72000. Or I shouldn't multiply by 52? That's still unclear. Anyway, let's assume I do work 52 weeks non-stop and what would I get in the end?

By the way, I'm in Software development so what are the agencies offering such services? Archer, Berkley, Brightwater, Computer Futures, CPL, Eolas, Fasttrack, Greythorn, Hudson, Qualitas, Raretec, Reed, Verkom? And are there purely umbrella companies (as opposed to recruitment agencies) for IT professionals?

Cheers