Another IT contractor question

clint_silver

Is there a calculator where one can work out how much one should deduct as a contractor.

Lets say for maths example I'll take home 100k over 230 days a year.

For those of you that do that, what kind of percentage are you paying in various deductions?



I know theres loads allowable, not withstanding that is it easier to go under an umbrella company or register one? The contract will be long term.

Can you get insurance for protection against losing job? I suppose a good health and sickness plan is a must.

John_Mc

clint_silver wrote: »

Is there a calculator where one can work out how much one should deduct as a contractor.

Lets say for maths example I'll take home 100k over 230 days a year.

For those of you that do that, what kind of percentage are you paying in various deductions?



I know theres loads allowable, not withstanding that is it easier to go under an umbrella company or register one? The contract will be long term.

Can you get insurance for protection against losing job? I suppose a good health and sickness plan is a must.

Just about to do the same and I'm registering a private limited company. I've been told it's worth doing this if you're going to be contracting for more than a year.

You will need to get an accountant who can tell you all the ins and outs.

Basically, you must register for Vat and collect it as part of your invoice. This is money you pay Revenue (easiest if you do it every 2 months). Any Vat you've paid within that time frame on business related stuff can be subtracted from the the amount paid to Revenue.

Then you're left with your net income. You pay your business related expenses out of this (Broadband, phone, mileage & per diems if applicable etc).

The remainder is what you must calculate employer and employee PRSI and income tax against. My accountant is providing me with a spreadsheet which calculates this for me.

clint_silver

Did you work out roughly what youre going to be deducting? Im trying to weigh up my current permanent job income against goin contracting before I make a decision on it. I had a mate contracting a 5-6 years ago who had his company setup, got a decent accountant and he had his legitimate deductions down to 11%. Im guessing that may have changed somewhat since.

Is there anything in your spreadsheet to say if you take in X as income, if you do all your expenses you should be paying a particular % in total deductions to goverment?

Not including things like pension/health insurance which would be your own business anyway. thanks man

John_Mc

clint_silver wrote: »

Did you work out roughly what youre going to be deducting? Im trying to weigh up my current permanent job income against goin contracting before I make a decision on it. I had a mate contracting a 5-6 years ago who had his company setup, got a decent accountant and he had his legitimate deductions down to 11%. Im guessing that may have changed somewhat since.

Is there anything in your spreadsheet to say if you take in X as income, if you do all your expenses you should be paying a particular % in total deductions to goverment?

Not including things like pension/health insurance which would be your own business anyway. thanks man

No I'm afraid there isn't - it's a spreadsheet with the calculations built in and I haven't entered any data yet.

From my initial meeting with my accountant you're not looking at 11% total deductions. I'd definitely recommend setting up a consultation with an accountant to work it out for you, it will be worth the money.