Go contracting or not?

Skippy21

[font=arial, sans-serif]i'm new to contracting and want to completely check it out before I start off into this route.  I have been offered a job with a company, but it would be through a recruitment agency and then they would like me to use an a umbrella company to invoice the recruitment agency. 

My hourly rate would be €30.  I would be doing around 40 hours a week plus.  I believe I would be best off selecting the PAYE option instead of going as a Limited Company. At least I still would be putting up a stamp??

Also currently I'm working in a permanent role the salary is in the mid 30's.  If i did take the contracting role what is my best financial options go PAYE employee or as a Limited company, I would still like to raise a stamp in case i became unemployed at least I would be covered so I think the PAYE employee umbrella option would be best?  Or would I be better off staying as a permanent employee without all the hassle of contracting? is there a lot of paperwork involved?

Thanks!![/font]

BabySlam

You are better off as an employee.

the hourly rate would not justify setting up a limited company and in any event Revenue frown on this type of arrangement where you work solely for one employer.

lawred2

BabySlam wrote: »

You are better off as an employee.

the hourly rate would not justify setting up a limited company and in any event Revenue frown on this type of arrangement where you work solely for one employer.

why would they frown on a legitimate contractual arrangement?

Many people in IT work their entire careers as contractors.

Skippy21

Better off staying in my permanent job or g[font=arial, sans-serif]oing down the route of the PAYE umbrella employee?  Financially would I not be better off taking the contracting role... [/font]

Killergreene

You make more money contracting but a lot of the agencies are scum. Setting up a Ltd company is precarious at best. It is done by the agencies so that they have no obligation to you as an employee. If you go the Ltd route you end up paying both employers and employees prsi which to me seems madness. The umbrella company is equally farcical, such a concept doesn't even exist In reality. Just a way for the agency to not have to employ you. All an umbrella company does is transfer your wages from the agency to your account while taking a cut off you in the meantime.

BabySlam

A Guide for Tax & Social Insurance - Employed or Self-employed (PDF, 371 KB on the Revenue website sets out the Revenue thinking. Sorry I cannot seem to attach it .

ArnieSilvia

Things to consider when contracting (I stress that this is my personal experience):

1. Holiday pay incl Bank Holidays - you pay these yourself so you get paid not 52 weeks but 46
2. Health insurance and sick pay - your problem
3. What if you get seriously sick?
4. No jobseeker benefit, only means tested allowance
5. Accountant fees, in Umbrella situation I paid 200 a month
6. No job stability whatsoever, you can be let go at any time
7. Worst thing and a deal breaker for me - no career progression. No development plans, no training, you get in and do your job and only that (don't dare trying to help anybody as it is perceived negatively - more people trained=more competition for jobs, in other words what's happening is work hoarding)
8. Almost forgot, no pension other that the one you pay yourself
9. Revenue wants to have it both ways - I ended paying mortgage in Dublin (my base where wife is, kids go to school etc.), paying rent in Limerick, paying travel costs to get to place where I was doing contract work, none of these I could put into costs.

Taking all above into consideration, in my situation, at 35 Euro per hour contract, I merely broke even compared to permanent job I had previously (50k gross + vhi for entire family + life insurance + pension + sick pay), largely because of extra rent and travel expenses.

Saying that, I'll probably end up contracting again but so far I enjoy first week of holidays this year, fully paid from my taxes by Social Welfare

Just guessing, is this job in Limerick? If so, PM me

Killergreene

Killergreene wrote: »

............. If you go the Ltd route you end up paying both employers and employees prsi which to me seems madness. ...................

It would be madness but it's not the case.

Killergreene

yes it is the case. have u been contacted by any of the scum companies like contracting plus.

Zulu

Seems like a daily rate that wouldn't make it worthwhile tbh. €240 per day?
How much experience do you have? (push for €340)

BrokenArrows

Contracting has plenty of down sides, the up side being better pay and ability to reduce tax liability via expenses.

When contracting for these recruitment agencies who force you to use their umbrella company then you have all the down sides and none of the upsides.

Your basically contracting as an employee and dont operate as a real LTD and manage your expenses to reduce tax.

dogbert27

Killergreene wrote: »

yes it is the case. have u been contacted by any of the scum companies like contracting plus.

Augeo is right. If you have a limited company and are the only employee and director you don't pay both employer and employee prsi.

Killergreene

Killergreene wrote: »

yes it is the case. have u been contacted by any of the scum companies like contracting plus.

No, it is not the case.

https://www.welfare.ie/en/Pages/Working-Proprietary-Directors-Classification-for-Social-Insurance-Purposes.aspx

"...... proprietary directors who own or control 50% or more of the shareholding of the company, either directly or indirectly, cannot be an employee of that company. This provision comes into effect from 1 July 2013.

In these circumstances the individual is classified as self-employed and is liable to pay PRSI at Class S"

Why would contracting plus be contacting me?

BrokenArrows wrote: »

............ the up side being better pay and ability to reduce tax liability via expenses.

When contracting for these recruitment agencies who force you to use their umbrella company then you have all the down sides and none of the upsides.

Your basically contracting as an employee and dont operate as a real LTD and manage your expenses to reduce tax.

One should only reduce the tax liability via expenses if they are legitimate expenses of course. Revenue recently claimed they feel they have addressed previous almost habitual claiming of unvouched expenses by contractors in various industries. Claiming unvouched expenses that are less than genuine might come back to bite.

One of the other advantages is that you can fund a pension with scope for higher contributions and the contributions from the Ltd company go 100% to the pension (less any actual pension fees).

Funmum05

My husband started contracting a few years ago. We set up as Ltd company as we felt we'd more control over our earnings. We looked into the umbrella route but it just wasn't for us. We're able to offset expenses such as mobile phone, electricity, heating, broadband and some mileage as our company is based in our home. My husband works fully from home but does have to travel to PR Events. I'm not sure it would be worth your while to go contracting for €30 an hour.

My husband gets €85 an hour and in the 4 years he's been doing it, he's only been out of contract for a month. One downside we find is a lot of the companies he contracts for don't like him taking any annual leave despite him not being paid for it.

Killergreene

I found a lot of the expenses contracting plus etc say you can claim are generally bull**** and if you aren't careful and get audited you will get hammered. I've seen people claiming mileage for petrol expenses for travelling to and from home to work for months on end which is not allowed.

The expenses thing is a complete scam anyway. All you are saving is 40% of the item you bought. So lads buying ipads etc cause they think they are getting it for free, they aren't, they are just getting them for 40% off but it still costs you a few hundred quid.

I've yet to be convinced that setting up a mickey mouse LTD like IT contractors do is more beneficial than PAYE payment. If the pay is the same and you don't have a lot of legitimate expenses, you are always better to just get paid PAYE imo.

Open to correction if anyone wants to post some sample figures.

Mrs OBumble

Killergreene wrote: »

I've yet to be convinced that setting up a mickey mouse LTD like IT contractors do is more beneficial than PAYE payment. If the pay is the same and you don't have a lot of legitimate expenses, you are always better to just get paid PAYE imo.

Open to correction if anyone wants to post some sample figures.

Mostly i agree with you.

But there can be cases eg if someone has a side income which is large enough that they're not eligible for welfare anyways, then yhe the downsides may noy be so great.

And of course it depends on the rate: as a general rule i think it needs to be least double what you make as an employee to be worth contracting.

Killergreene

Killergreene wrote: »

I found a lot of the expenses contracting plus etc say you can claim are generally bull**** and if you aren't careful and get audited you will get hammered. I've seen people claiming mileage for petrol expenses for travelling to and from home to work for months on end which is not allowed................

I'd be surprised if contracting plus allowed folks to claim to and from place of normal work mileage.
And if audited it's the company who is audited not the individual so again I doubt they are leaving themselves liable for a kicking in a few years time.

Killergreene wrote: »

The expenses thing is a complete scam anyway. All you are saving is 40% of the item you bought. So lads buying ipads etc cause they think they are getting it for free, they aren't, they are just getting them for 40% off but it still costs you a few hundred quid.......

Legitimate expenses are of course not a complete scam but focussing on your point regarding the 40%

VAT is reclaimable so that's 23% "off" straight away. The balance is than effectively half price when you consider PRSI & USC which you have forgotten about so effectively the total is over 60% "off" using your terminology.

Killergreene wrote: »

..........I've yet to be convinced that setting up a mickey mouse LTD like IT contractors do is more beneficial than PAYE payment. If the pay is the same and you don't have a lot of legitimate expenses, you are always better to just get paid PAYE imo.

Open to correction if anyone wants to post some sample figures.

Well you are looking at this with tunnel vision. For a specific role one might have the option to go the PAYE route or Ltd company route, all in if the purchase order being assigned is for X amount than in total the amount the person doing the work will get rewarded is much the same.

However if one becomes a contractor with a longterm view and actually has some specific skills that are in demand and they can/will travel than rates of €500 to €1000/day + are attainable in some industries for people where their peers (similar experience and qualifications but less entrepreneurial spirit or in some cases more ambition (promotion chasers etc) ) are on €50k to €70k in full time salaried roles.

Of course no two jobs are the same so exact like for like comparisons are difficult but there are of course people sitting next to each other today....... one being on €50k/annum + benefits and the other being on €40/hour into their Ltd company. You can do the sums on that yourself (your sums and understanding of the tax situation are not great though from what we've seen so far in this topic)

And in times of recession etc quite often the full time folk get their walking papers too.............any decent contractor ensures the rates includes some redundancy risk too

Contacting and career progression are not mutually exclusive concepts either, I know a chap who recently project managed a €500m project as a contractor, there are many like him and he's hasn't has a staff role since he was in his early 20s, he's approaching 50 now. There are many contractors out there who frequently get the tap on the shoulder to go staff and turn it down.

A decent contractor is actually 100% self employed with confidence that they have a good chance of a full employment over the coming years. You don't go contracting thinking you'll be on €30/hour for the next decade somewhere

76544567

If it IT then co sider contracting in London or further afield. You can get anything from £500- £1000 a day in London depending on which field you are in.
When looking at websites pick one like jobserve.co.uk where you can filter out all the jobs offering below £500 per day.

Teyla Emmagan

At that level of pay you would be better off as a permanent employee OP. You just wouldn't be making enough to give up the benefits.

Killergreene

Augeo wrote: »

I'd be surprised if contracting plus allowed folks to claim to and from place of normal work mileage.
And if audited it's the company who is audited not the individual so again I doubt they are leaving themselves liable for a kicking in a few years time.



Legitimate expenses are of course not a complete scam but focussing on your point regarding the 40%

VAT is reclaimable so that's 23% "off" straight away. The balance is than effectively half price when you consider PRSI & USC which you have forgotten about so effectively the total is over 60% "off" using your terminology.



Well you are looking at this with tunnel vision. For a specific role one might have the option to go the PAYE route or Ltd company route, all in if the purchase order being assigned is for X amount than in total the amount the person doing the work will get rewarded is much the same.

However if one becomes a contractor with a longterm view and actually has some specific skills that are in demand and they can/will travel than rates of €500 to €1000/day + are attainable in some industries for people where their peers (similar experience and qualifications but less entrepreneurial spirit or in some cases more ambition (promotion chasers etc) ) are on €50k to €70k in full time salaried roles.

Of course no two jobs are the same so exact like for like comparisons are difficult but there are of course people sitting next to each other today....... one being on €50k/annum + benefits and the other being on €40/hour into their Ltd company. You can do the sums on that yourself (your sums and understanding of the tax situation are not great though from what we've seen so far in this topic)

And in times of recession etc quite often the full time folk get their walking papers too.............any decent contractor ensures the rates includes some redundancy risk too

Contacting and career progression are not mutually exclusive concepts either, I know a chap who recently project managed a €500m project as a contractor, there are many like him and he's hasn't has a staff role since he was in his early 20s, he's approaching 50 now. There are many contractors out there who frequently get the tap on the shoulder to go staff and turn it down.

A decent contractor is actually 100% self employed with confidence that they have a good chance of a full employment over the coming years. You don't go contracting thinking you'll be on €30/hour for the next decade somewhere

So you agree that if you have very little expenses and the salary is the same you are better off being paid PAYE.

No need to be a smart alec anyway, you didn't provide any figures to counter my claim. If a person is on 40€ an hour and doesn't have a large expenses bill, they will be better off receiving their pay as PAYE if that option is available from the agency. Be under no illusions why these agencies want you to set up your own Ltd either.

Anyway keep paying your handy few bob to contracting plus to keep your shell company up and running.

I'd love to see your certificate of incorporation. copy and paste job I'm sure.

Killergreene

Killergreene wrote: »

So you agree that if you have very little expenses and the salary is the same you are better off being paid PAYE.

Define the same? The option of a directors pension is a significant plus IMO.
Being paid PAYE by who? I'd never advise anyone to be a PAYE paid contractor.

Killergreene wrote: »

No need to be a smart alec anyway, you didn't provide any figures to counter my claim. If a person is on 40€ an hour and doesn't have a large expenses bill, they will be better off receiving their pay as PAYE if that option is available from the agency. Be under no illusions why these agencies want you to set up your own Ltd either.

Smart alec? you were spouting crap about 40% "off" while ignoring VAT, PAYE & PRSI ......... in conjunction with your ludicrous claim before that directors pay both employer & employee PRSI. You reckon agency paid PAYE is the way to go? LOL you are the only one under illusions

Killergreene wrote: »

........Anyway keep paying your handy few bob to contracting plus to keep your shell company up and running.

I'd love to see your certificate of incorporation. copy and paste job I'm sure.

Getting personal now old boy while talking through your hoop too

I have no dealings with contracting plus, I have never payed them any money whatsoever and I'm struggling to fathom why you think I have. See the illusions point above. You seem obsessed with contracting plus for whatever reason.

Why would you want to see my certificate of incorporation?

beauf

Contracting I found was great experience. Learnt lots and faster than in a permanent role. Financially it was only worth it if you get a good rate.

beauf

beauf wrote: »

............. Financially it was only worth it if you get a good rate.

Most definitely.

xabi

I had the same concerns as you OP about 15 years ago, I went for it and haven't looked back, been contracting ever since. There are loads of contracting roles out there currently, one plus for me is I don't need to get involved in company politics and it's easy to move around as you've no real loyalty to who you're working for. At 240/day it's on the low side though, try negotiate up.

I'd never take a permanent role now.

Killergreene

Augeo wrote: »

Define the same? The option of a directors pension is a significant plus IMO.
Being paid PAYE by who? I'd never advise anyone to be a PAYE paid contractor.

You reckon agency paid PAYE is the way to go? LOL you are the only one under illusions

if you are offered 40 euro an hour as a rate from an agency, and they are willing to give you the option to pay your Ltd or pay you that directly as PAYE, and if you have no major expenses to claim, rather than setting up shell company you are better to be paid as PAYE from the agency.

You need to be claiming a bucket load of expenses for it to be worth your while.

How much are your monthly accounting fees or do you do it yourself?

how % of your earnings in tax do you pay each month out of interest ?

Killergreene

Killergreene wrote: »

.....

how % of your earnings in tax do you pay each month out of interest ?

You are making many assumptions if you think the answer to that question as a stand alone piece of info is any way interesting or informative
1) that I am a contractor with what your refer to as a shell company
2) that my earnings are the income of this shell company
3) I have no employees to pay
4) that I have no company vehicles
5) that I have no company equipment to purchase/maintain
6) my so called shell company has no capital allowances on the balance sheet
7) I'm not superfunding an executive pension & paying myself a small salary from the company as I have other income to live on
8) there's quite a few more too
All considered do you expect me to answer? How does 26% sound to you

Killergreene

Killergreene wrote: »

if you are offered 40 euro an hour as a rate from an agency, and they are willing to give you the option to pay your Ltd or pay you that directly as PAYE, and if you have no major expenses to claim, rather than setting up shell company you are better to be paid as PAYE from the agency.
....

What gross salary do you think the agency will offer going the PAYE route?

Killergreene

Augeo wrote: »

What gross salary do you think the agency will offer going the PAYE route?

Ah you haven't answered my question though. In IT contracting many independent contractors are forced to set up shell companies for the primary intents of getting paid. They can then seek to claim dubious expenses - half of phone bill, a laptop, computer , half of electricity bill etc, courses and fees etc in an attempt to reduce tax bill. However, if they can get paid the same per hour from the agency as a PAYE employee and have minimal expenses, they are better off not going Ltd route.

beauf

When I was contracting (a long time ago) they wouldn't hire a sole trader. They would only hire someone via a ltd company. That might no longer be true. I understood the reason for this was so that the customer wouldn't be liable for PRSI. Which was also why they would regularly break contracts. As if a contractor was in place for a long time, it be construed as a means to avoid PRSI. Maybe this is a myth or no longer true. I don't know.

Augeo

Augeo wrote: »

What gross salary do you think the agency will offer going the PAYE route?

Killergreene wrote: »

Ah you haven't answered my question though. In IT contracting many independent contractors are forced to set up shell companies for the primary intents of getting paid. They can then seek to claim dubious expenses - half of phone bill, a laptop, computer , half of electricity bill etc, courses and fees etc in an attempt to reduce tax bill. However, if they can get paid the same per hour from the agency as a PAYE employee and have minimal expenses, they are better off not going Ltd route.

Hold on a second.

What salary will be offered instead of the €40/hour. I cannot answer until you quantify it, "the same" is not an answer.

BTW, I answered your other question above

Killergreene

Augeo wrote: »

Hold on a second.

What salary will be offered instead of the €40/hour. I cannot answer until you quantify it, "the same" is not an answer.

BTW, I answered your other question above

40€ an hour will be offered. The same rate. But as paye so Without the ability to claim expenses.

Killergreene

Killergreene wrote: »

40€ an hour will be offered. The same rate. But as paye so Without the ability to claim expenses.

So the agency will pay me €40/hour for every hour I work and as I'm a PAYE employee I'll get my 20days paid holidays & the 10 public holidays off?

So a salary of €73k per annum and my holiday entitlements?

And they'll be paying employers PRSI too.... now it's clear why I wanted you to clarify the salary. This is going to cost the agency 20%+ more than if I was Ltd company invoicing them.

Are you actually serious here?

Wheeliebin30

Could be corporation tax on profits too with limited company.

Claiming expenses and writing it off against tax is way over exaggerated as being a huge plus.

You really can't claim much expenses, and anything you write off against tax still has to be bought. So you still have to spend money anyway. What items is there that's worth it? An Ipad, laptop? Nothing else you can put through the company that's not work related.

I go by the 1/3 rule while been self employed.

When you take everything into account coming out with about 1/3 of your earnings as cash in your hand is about right. For me anyway.

Wheeliebin30

Wheeliebin30 wrote: »

.....

I go by the 1/3 rule while been self employed.

When you take everything into account coming out with about 1/3 of your earnings as cash in your hand is about right. For me anyway.

Presumably 2/3s

Wheeliebin30

Augeo wrote: »

Presumably 2/3s

Ah I'm not in I T so probably different ball game.

So if you earn €100k you get €33,333 after tax etc...... seriously.

Wheeliebin30

Augeo wrote: »

So if you earn €100k you get €33,333 after tax etc...... seriously.

Yes.


Insurance.
Work van.
Van insurance.
van tax.
tools.
overalls.
diesel.
accountant fees.
doe for van.
usc.
paye.
prsi.
corporation tax.
bank fees.
I T equipment.
tyres for van, general maintenance.


The list goes on...

By the time all that is spent there ain't a lot left.

Killergreene

Augeo wrote: »

So the agency will pay me €40/hour for every hour I work and as I'm a PAYE employee I'll get my 20days paid holidays & the 10 public holidays off?

So a salary of €73k per annum and my holiday entitlements?

And they'll be paying employers PRSI too.... now it's clear why I wanted you to clarify the salary. This is going to cost the agency 20%+ more than if I was Ltd company invoicing them.

Are you actually serious here?

This is exactly what I mean.

Do you agree this method is more beneficial for the contractor ?

Killergreene

Killergreene wrote: »

This is exactly what I mean.

Do you agree this method is more beneficial for the contractor ?

That method doesn't exist.... for a €40/hour gig a €73K salary isn't equivalent.

If that's what you mean you are fairly clueless but it explains your hatred of agencies as you must think for every €40/hour contractor they have they are making the guts of €20K/annum on top of their actual cut.

Killergreene

Augeo wrote: »

That method doesn't exist.... for a €40/hour gig a €73K salary isn't equivalent.

If that's what you mean you are fairly clueless but it explains your hatred of agencies as you must think for every €40/hour contractor they have they are making the guts of €20K/annum on top of their actual cut.

What do you mean it isn't equivalent?

It doesn't exist for you is what you mean to say.

I know someone with this arrangement.

On 40/hour if you take 4 weeks off & all your public holidays you work 46 weeks so invoice €73k ish.

End user gets charged the 73k ish & the agencies cut.

If you want PAYE set up agency still get the same cut but they have to pay employers PRSI, your holidays and public holiday entitlements out of the 73k. So your salary will be less.

If you think otherwise I'm not actually surprised.

Again..... you have no clue what exists for me bud.

Killergreene

Augeo wrote: »

On 40/hour if you take 4 weeks off & all your public holidays you work 46 weeks so invoice €73k ish.

End user gets charged the 73k ish & the agencies cut.

If you want PAYE set up agency still get the same cut but they have to pay employers PRSI, your holidays and public holiday entitlements out of the 73k. So your salary will be less.

If you think otherwise I'm not actually surprised.

Again..... you have no clue what exists for me bud.

No, the salary won't be less.

If the deal is 40 euro an hour, this is what you get regardless of how u get paid (paye versus ltd).

The bottom line is if a person gets paid 1000 euro per week and has a choice to receive that money as a PAYE employee or set up a Ltd company to receive that money it is better to do so as a PAYE employee if they don't have many expenses to claim.

I think you're getting confused with the figures I'm posting. I'm not fussed re your set up. If you have a legitimate business fair enough. For a one man contractor it is always preferable to be paid as a PAYE employee rather than setting up a shell company.

If you calculaye a sample set of figures for a person on 40 euro an hour working 35 hours for one week you will see how net take home pay is more if paid as PAYE rather than Ltd.

Woden

UK related but here.

http://www.sjdaccountancy.com/about/ourservices/ltd_vs_umbrella.html?utm_expid=137194620-40.oIiHgDbxRoWPDUKtzDP3GQ.0&utm_referrer=https%3A%2F%2Fwww.google.co.uk%2F

http://www.sjdaccountancy.com/about/resources/examples.html

http://www.itcontracting.com/calculators/limited-umbrella-tax-calculator/

Killergreene

Killergreene wrote: »

No, the salary won't be less.

If the deal is 40 euro an hour, this is what you get regardless of how u get paid (paye versus ltd).

.....

I think you're getting confused with the figures I'm posting. I'm not fussed re your set up. If you have a legitimate business fair enough. For a one man contractor it is always preferable to be paid as a PAYE employee rather than setting up a shell company.
....

Of course the salary will be less. Who picks up the tab for the bank holidays & holiday entitlements otherwise? Actually answer that for us.

If a grand/week is funding a contractors hours or a PAYE worker employers PRSI & holidays have to come out of the 1000 as well. This isn't rocket science bud.

For someone not fussed about my set up you made many assumptions & were asking many questions.

icanmunch

Does anyone know how agency's work in terms of IT contracts? If I am on a day rate of €250 for example, what sort of cut would the agency get on top of that? Also, if you ask for a raise, does the extra money come from the agency's cut or come from the company that are paying the agency? Hope that makes sense!

icanmunch

icanmunch wrote: »

Does anyone know how agency's work in terms of IT contracts? If I am on a day rate of €250 for example, what sort of cut would the agency get on top of that? Also, if you ask for a raise, does the extra money come from the agency's cut or come from the company that are paying the agency? Hope that makes sense!

Depends on the case.
Some large companies insist on visibility of the cut and won't pay over a certain % or amount per hour so as to ensure they get the best possible candidate, ie the candidate is getting the bulk of the money and not the agency.

Raise generally comes from the company.

Agency would be getting 10% ish more often than not. (so 10% on top of the cost to the company charged, your salary or rate comes out of the balance, along with employers PRSI, holiday pay etc if you are salaried .......... as most of us know )

there are of course cases where agencies charge loads and pay a low rate but that's not the norm these days.

Vyse

Killergreene wrote: »

No, the salary won't be less.

If the deal is 40 euro an hour, this is what you get regardless of how u get paid (paye versus ltd).

The bottom line is if a person gets paid 1000 euro per week and has a choice to receive that money as a PAYE employee or set up a Ltd company to receive that money it is better to do so as a PAYE employee if they don't have many expenses to claim.

I think you're getting confused with the figures I'm posting. I'm not fussed re your set up. If you have a legitimate business fair enough. For a one man contractor it is always preferable to be paid as a PAYE employee rather than setting up a shell company.

If you calculaye a sample set of figures for a person on 40 euro an hour working 35 hours for one week you will see how net take home pay is more if paid as PAYE rather than Ltd.

Are you talking about taking an "employee" status as opposed to a contractor status? Typically a company will look for one or the other. Often a contractor role will be required to keep permanent head count down. This would be determined by the company and not the agnecy/ third party.

Also, I've never heard of a company offering an equivalent hourly rate for a PAYE earner as that of a contractor. If you are PAYE you would typically be on a fixed salary, not an hourly rate. I've gone from contractor to staff in the same company and had to take approx a 1/3 cut. Add on top of that I wasn't getting paid overtime and it worked out as more i.e. the decrease.

Vyse

Vyse wrote: »

............

Also, I've never heard of a company offering an equivalent hourly rate for a PAYE earner as that of a contractor. If you are PAYE you would typically be on a fixed salary, not an hourly rate. I've gone from contractor to staff in the same company and had to take approx a 1/3 cut. Add on top of that I wasn't getting paid overtime and it worked out as more i.e. the decrease.

Indeed, the chap mentioned 35 hour week though so who knows what game he's in or wanting to be in, the only folk I know on 35 hr weeks are in the public sector.

Killergreene

Vyse wrote: »

Are you talking about taking an "employee" status as opposed to a contractor status? Typically a company will look for one or the other. Often a contractor role will be required to keep permanent head count down. This would be determined by the company and not the agnecy/ third party.

Also, I've never heard of a company offering an equivalent hourly rate for a PAYE earner as that of a contractor. If you are PAYE you would typically be on a fixed salary, not an hourly rate. I've gone from contractor to staff in the same company and had to take approx a 1/3 cut. Add on top of that I wasn't getting paid overtime and it worked out as more i.e. the decrease.

One of the other lads posting above has it completely wrong and doesn't have a clue what he is talking about. Happy to continue this discussion via PM if you want accurate information; this thread seems to have been infiltrated by a contractor who is spreading disinformation and trying to convince people that setting up a Ltd is the only game in town, and if you get paid as PAYE you'll be left penniless. Only a cowboy would try and postulate that if you were a PAYE employee that money would be deducted from your wages to pay employers PRSI. On top of you paying employee PRSI. This lad is very misinformed and as I said spreading disinformation intentionally. If you are an employee of a company and are covering the bill for employer's and employee's PRSI there is something seriously amiss and illegal going on. Some folks on this thread would have you believe this is the norm though.

Bud.... the only misinformation is coming from you. Your claims that self employed pay both employee and employer PRSI for example.

No where do I claim money is deducted from wages to pay employers PRSI... it along with holiday pay is taken into account when the salary is being calculated.

There us someone in here clueless and your posts show it to be you.

Take it to PM for the real truth.... lol

You're back to claiming I'm a contractor I see.

Killergreene

Killergreene wrote: »

40€ an hour will be offered. The same rate. But as paye so Without the ability to claim expenses.

To flesh this out............. there's a project and a contractor is required. Budget is approx €80k.

It is decided that the weekly hours will be capped at 39 and an agency or three are contacted........... rate is €40/hour for 39 hrs/week.

Contractor takes that they'll invoice €40 (rate) x39 (hrs) x 46 (weeks worked after taking the 10 Bank Hols unpaid & 20 days unpaid annual leave) = €72k approx + VAT

Agency gets 10% so that's the €80k done and dusted.#

Now you are suggesting that they'll (the agency) give a PAYE worker a €72k/annum salary. (you actually are suggesting €40/hr worked which is more lunacy again as I'll show you below)

The agency still needs their margin (they aren't philanthropists) so who picks up the employer PRSI bill ?

Not to mention you are suggesting actually paying them hourly, so what happens when there's a BH or they take the week off? STAFF get holiday pay, who pays for the 170 ish holiday hours and the 10 bank holidays there are ENTITLED to be paid if you've handed them €40/hour for every hour worked?

PM job I suppose, LOL

Vyse wrote: »

.......... I've gone from contractor to staff in the same company and had to take approx a 1/3 cut. ............

Sounds about right