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Question about Umbrealla Services for contracting

  • 22-12-2017 6:45pm
    #1
    markodaly
    Registered Users, Registered Users 2 Posts: 16,018 ✭✭✭✭


    So started a new contract and have a question about umbrella services. Can you calculate your tax this was as a normal PAYE employee using the online calculators? I thought that an umbrella services means that you are basically an employee of this company and get paid out as a normal PAYE even though you are contracting services for someone else.

    The reason I ask is that, I am being charged employers PRSI. Now, I know that i am liable for PAYE, USC and employees PRSI, but why am I being charged employers PRSI? Or is this how umbrella services work?


Comments

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


    markodaly wrote: »
    So started a new contract and have a question about umbrella services. Can you calculate your tax this was as a normal PAYE employee using the online calculators? I thought that an umbrella services means that you are basically an employee of this company and get paid out as a normal PAYE even though you are contracting services for someone else.

    The reason I ask is that, I am being charged employers PRSI. Now, I know that i am liable for PAYE, USC and employees PRSI, but why am I being charged employers PRSI? Or is this how umbrella services work?

    Yes this is how umbrellas work. You pay them for the privilege of paying extra tax. Setup company and become director if you dont like it.


  • #3
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,606 Mod ✭✭✭✭Jim2007


    markodaly wrote: »
    The reason I ask is that, I am being charged employers PRSI. Now, I know that i am liable for PAYE, USC and employees PRSI, but why am I being charged employers PRSI? Or is this how umbrella services work?

    The umbrella company is just an accounting service. You pay for EVERYTHING plus a fee for their service. There are two advantages, you don't have to set everything up yourself and it much more straight forward to claim benefits such as unemployment, disability etc later.


  • #4
    LincolnHawk
    Registered Users, Registered Users 2 Posts: 364 ✭✭LincolnHawk


    Depends on what umbrella setup you chose. You can usually choose between being a straight up employee or you can be a director on the umbrella company.
    Sounds like you have the director option.

    http://www.iconaccounting.ie/first-time-contractor/
    Scroll down to: How do I set up as a Contractor


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