Contracting: Umbrella Company vs Temporary Employee Contract

conf101

Hi all,

Looking for some advice on a contract role I've been offered.

It's a short-term contract (3-6 months). I've contracted before and used an Umbrella company, so I'm familiar with how it all works.

This time I've been offered two different options. I can go the Umbrella Company route on a €25 per hour/€200 per day rate or go on a temporary employee contract at €19 per hour.

From my knowledge, the main difference is that with the Umbrella Company I obviously won't be paid for any public holidays or days off I take and that I'll be liable for the Employer's PRSI contribution. With the Temporary Employee Contract route I'm not on the hook for Employer's PRSI and I accrue annual leave and holidays as per a regular employee.

Can anyone with experience in this area advise if there's anything else important I'm missing out on? By my calculations I'd be slightly better off going the Umbrella Company route, but I want to be sure I'm not missing anything important before I commit.

Thanks all!

Mrs OBumble

My rough rule of thumb is that the contract rate needs to be twice the employee hourly rate for it to be worthwhile contracting. Based on that 19 is way more than (25/2), so temporary employee would be better.

It does partly depend on what your PRSI situation is like now: if you have been contracting up to now, then getting a stamp fro 3-6 months won't make much if any difference. But if you have been an employee, then keeping this status willl be better from a social welfare point of view.

To be honest, 25 per hour seems very low for taking on the risks of contracting: you need to cover your own annual leave and public holidays, professional liability insurance, training, umbrella company fees - and have no employment rights what so ever.

conf101

Thanks Mrs OBumble, much appreciated.

IMO both rates are too low for the role, but that's another issue.