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Which is more beneficial, self employed or employee?

  • 24-10-2013 8:28am
    #1
    augusta24
    Registered Users, Registered Users 2 Posts: 633 ✭✭✭


    Hi all,
    I'm starting out as self employed at the moment. However, I'm also about to start working in another capacity as my main self employment is taking a while to take off (haven't earned anything yet).
    Previously when I worked in this second capacity I did it through self employment too. However this time round the person I'm working with wants to do this second job through employment so is be an employee.

    I'm basically just wondering what the pros and cons for me would be if I go ahead and be an employee at this second job vs if I keep it self employed... Bearing in mind I'll be earnig money as a self employed person for my first business anyway.

    I know I can claim expenses while self employed but in terms of taxes which is better? I'm going to need an accountant either way for my first job anyway so is it better to be self employed for second job too or is there actually a benefit to me in agreeing to let my second job be as an employee.

    I'll be receiving same hours and same hourly rate either way (but if I go as an employee they will have taken away my Taxes etc for me).

    Thanks for any help!


Comments

  • #2
    srsly78
    Registered Users, Registered Users 2 Posts: 7,157 ✭✭✭srsly78


    The answer really is "it depends". Pay attention to employers prsi for starters.


  • #3
    augusta24
    Registered Users, Registered Users 2 Posts: 633 ✭✭✭augusta24


    srsly78 wrote: »
    The answer really is "it depends". Pay attention to employers prsi for starters.

    Thanks for your reply. I understand it may have been a stupid question to most of you who have lots of experience in this field but can you elaborate on this a little more as I don't actually understand your point.


  • #4
    srsly78
    Registered Users, Registered Users 2 Posts: 7,157 ✭✭✭srsly78


    Ask your accountant to explain it, that's what you pay for after all. Not allowed to give advice on this forum really.


  • #5
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,686 ✭✭✭barneystinson


    OP, whether you are an employee or self employed is a question of fact, depending on the specific relationship between you and the employer/customer.

    What I mean is, if the terms of your engagement would be the same regardless of what it's being called ("employee" or "self employed") then it's not a question of choosing which one suits, but which one is correct.

    (Of course, if the one that is correct isn't the one that suits, then ye could change the terms of the engagement so that it is in FACT a different type of relationship.)


  • #6
    rahmalec
    Registered Users, Registered Users 2 Posts: 193 ✭✭rahmalec


    Yes it depends.

    In terms of figures, as an employee is you will be able to claim some or all of the paye tax credit, which is 1650 (I think). So, if you if you have not earned any paye income so far this year, it should work out better as an employee.

    Of course USC applies as normal. Prsi is different but its 4% for self employed and up to around 14% for employed, depending on how much is earned per week.

    As has been said, whether you're self employed or employed depends on what and how you will be working and you can't just choose one or the other as you feel like. There are a set of guidelines somewhere you can find if you google.


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