Self employed vs Employee

CiniO

I actually have no knowledge about this subject in Ireland.
But I know in some EU countries, many employees (especially better paid f.e. in IT sector, etc) instead of being employed by a company, decide to register as self employed. They still technically speaking work for that company, but instead of being PAYE workers, they instead just issue invoices to the company they work for - still doing regular 9-5 jobs...

Are there any limitations of doing that in Ireland?
Is this a common practice or not at all? If not - why?
Is it illegal by any means?
Are there any tax benefits in doing one way or the other?

Thanks for any replies.

barneystinson

CiniO wrote: »

I actually have no knowledge about this subject in Ireland.
But I know in some EU countries, many employees (especially better paid f.e. in IT sector, etc) instead of being employed by a company, decide to register as self employed. They still technically speaking work for that company, but instead of being PAYE workers, they instead just issue invoices to the company they work for - still doing regular 9-5 jobs...

Are there any limitations of doing that in Ireland?
Is this a common practice or not at all? If not - why?
Is it illegal by any means?
Are there any tax benefits in doing one way or the other?

Thanks for any replies.

In Ireland if it walks like a duck and quacks like a duck, it's a duck.

Employment legislation is quite strong here and the facts would dictate whether the relationship is one of employment (contract of service) or of self employment (contract for services).

Employers may prefer to have the person's services but without the onerous obligations of employment (holiday pay, redundancy rights, sick pay, access to pension, employer's PRSI etc...) while some individuals will prefer being an employee and having all these rights, whilst others would rather be paid >30% more per hour...

It's more common in some industries than others.

Legal or illegal doesn't come into it. It's simply a question of determining what the relationship between 2 parties is.

There can be tax benefits (primarily pension based) to the self employment route, by setting up a Ltd company to trade your services through, but you'd want to be commanding upwards of €100k (or substantially more than you want to draw down as a salary) for there to be much benefit...

And things can go VERY wrong if you are ill advised... https://www.irishexaminer.com/business/revenue-takes-17m-haul-from-contractors-346864.html