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Moving from PAYE employee to IT contractor

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  • 05-06-2019 9:46am
    #1
    mohm.kamal
    Registered Users Posts: 66 ✭✭


    Hello

    I've been working all my life long as an employee and recently I started to receive some offers for IT contracting here in Ireland. Basically, I'm very confused and uncertain of which option should I go for; stay as an PAYE which is stable, secure and hassle option, or go to the contracting one.

    Without giving much details, the different in net salaries between what I'm getting now as PAYE and the contractor is almost 18% increase a month (I have calculated the taxes based on an Umbrella Director). So first question is; would it worth going for?

    The next question is; why would a Umbrella Director option is less taxed than the Umbrella PAYE one?

    One more question; someone told me that I can setup a private limited company which will maximize my take home cash. However, I have read a lot about this option and I can't get the benefit, my example is:

    I'm a private company, and got 10000 euros a month, If I set myself as a Director with a salary of say 4000euros a month, and my wife as a secretary with a salary of 1500euros a month. The remaining income in the business account of the company will be 4500euros, do I pay 12.5% corporate tax on these remaining amount and then take the net income home? or what exactly happens to the remainings?


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