Sole trader looking to take on

mcneil

If im a sole trader and im wanting to take someone on or maybe 2 people for 2 or 3 days a week what do i need to do. I work in construction and my workload is getting very busy and even thou i dont think i could afford to take someone on full time, i do need help some weeks when it gets really busy but dont kow where to start about taking someone on. Will i have to change from a sole trader to a ltd company or other and what about taxes, what rates of tax do i pay for temp employees.

davindub

mcneil wrote: »

If im a sole trader and im wanting to take someone on or maybe 2 people for 2 or 3 days a week what do i need to do. I work in construction and my workload is getting very busy and even thou i dont think i could afford to take someone on full time, i do need help some weeks when it gets really busy but dont kow where to start about taking someone on. Will i have to change from a sole trader to a ltd company or other and what about taxes, what rates of tax do i pay for temp employees.

You don't need to change to a ltd.

Get a payroll company to look after the income taxes, accrued holiday pay, returns, etc. It won't cost much for 1 employee, but whatever they charge well worth it, it's something that needs to be done right and can be tricky.... Also you will need to be careful about the contract you offer and you will have responsibilities for training / health and safety. You pay 10.75% on gross earnings of the employee. There is quite a bit to becoming an employer, some reliefs and schemes (jobs plus) are also available so look into them as well.

What what you are looking for sub contracting might be a better option initially. You will also need to check Relevant contracts tax if doing this. Or I'm not sure if there are any recruitment agencies still offering staff (i.e. you pay the recruitment agency, they are the employer).

shugy

davindub wrote: »

You don't need to change to a ltd.

Get a payroll company to look after the income taxes, accrued holiday pay, returns, etc. It won't cost much for 1 employee, but whatever they charge well worth it, it's something that needs to be done right and can be tricky.... Also you will need to be careful about the contract you offer and you will have responsibilities for training / health and safety. You pay 10.75% on gross earnings of the employee. There is quite a bit to becoming an employer, some reliefs and schemes (jobs plus) are also available so look into them as well.

What what you are looking for sub contracting might be a better option initially. You will also need to check Relevant contracts tax if doing this. Or I'm not sure if there are any recruitment agencies still offering staff (i.e. you pay the recruitment agency, they are the employer).

Does that mean if he pays 80euro a day then he pays just over 8euro on tax instead of the 20% he'd pay if he were to do them hours instead?

PARlance

shugy wrote: »

Does that mean if he pays 80euro a day then he pays just over 8euro on tax instead of the 20% he'd pay if he were to do them hours instead?

No, what it basically means is that the employer also has to pay PRSIer on all staff of 10.75%.
I.e you agree to pay someone €30,000 a year, it''ll end up costing you approx €33,300.

In the original example. The employee would pay €16 of the €80 and the employer would pay another €8 on top of that. (Not exact figures obv).

shugy

PARlance wrote: »

No, what it basically means is that the employer also has to pay PRSIer on all staff of 10.75%.
I.e you agree to pay someone €30,000 a year, it''ll end up costing you approx €33,300.

In the original example. The employee would pay €16 of the €80 and the employer would pay another €8 on top of that. (Not exact figures obv).

Does that mean if his employee takes home 375euro a week then he needs to put down about 500 when pricing work?

CIARAN_BOYLE

shugy wrote: »

Does that mean if his employee takes home 375euro a week then he needs to put down about 500 when pricing work?

Probably more. After all insurance may need to be added to as an employer. more tools may be needed.

Also you don't deal with anyone on the basis of take home. Always deal gross because if your deal is on take home they will remove their tax credits keep the take home and screw you on the gross up.

Even if you agree someine they will do a job for you for (say) 500 a week you must bear in mind error prsi, holiday pay etc.

mcneil

CIARAN_BOYLE wrote: »

Probably more. After all insurance may need to be added to as an employer. more tools may be needed.

Also you don't deal with anyone on the basis of take home. Always deal gross because if your deal is on take home they will remove their tax credits keep the take home and screw you on the gross up.

Even if you agree someine they will do a job for you for (say) 500 a week you must bear in mind error prsi, holiday pay etc.

Tbh, its something i know nothing about. Ive always worked on my own, price jobs say 120-200 a day for me but now im looking to take someone on, i naturally thought all i had to do was say put them down for 100 a day and the tax man gets 20% of this.

CIARAN_BOYLE

mcneil wrote: »

Tbh, its something i know nothing about. Ive always worked on my own, price jobs say 120-200 a day for me but now im looking to take someone on, i naturally thought all i had to do was say put them down for 100 a day and the tax man gets 20% of this.

Basics

There's two main ways of taking someone on.

1. Subcontractor/RCT
This person isn't an employee but will do work for you. They have to meet the criteria for being a subcontractor set out here

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

You have to tell revenue before paying them anything and revenue will tell you to deduct 0, 20% or 35% which you pay over to Revenue. They willl be able to claim credit for this.

2 Employee/PAYE

You hire someone, you are responsible for insurance that covers them etc. You must calculate appropriate PAYE, USC, PRSI depending on their circumstances which will be informed to you by Revenue. You must also pay employer prsi and make provision for them to be paid annual leave. You must also pay bank holidays.

17larsson

And don't forget when you're working out the cost that the employee, if full time, will only work 46 weeks but get paid for 52

mcneil

CIARAN_BOYLE wrote: »

Basics

There's two main ways of taking someone on.

1. Subcontractor/RCT
This person isn't an employee but will do work for you. They have to meet the criteria for being a subcontractor set out here

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

You have to tell revenue before paying them anything and revenue will tell you to deduct 0, 20% or 35% which you pay over to Revenue. They willl be able to claim credit for this.

2 Employee/PAYE

You hire someone, you are responsible for insurance that covers them etc. You must calculate appropriate PAYE, USC, PRSI depending on their circumstances which will be informed to you by Revenue. You must also pay employer prsi and make provision for them to be paid annual leave. You must also pay bank holidays.

If i only need them for say 2 days a week here and there while they are on the dole, do i still have to pay the holidays?

Can someone be self employed and claim dole aswell while they are working 2 day a week

davindub

You will need to accrue holidays based on hrs worked.

There are circumstances where an self employed builder can get the dole and work but I don't know the ins and outs of it (it involves a certain amount of days working for free for public schemes)
.

But generally an employee can do a short week and claim the dole if actively seeking work full time but self employed are self employed and do not fulfill the criteria for the dole.