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Query regarding daily rate contract role

MaxPayneXL

I am currently in discussion for a daily rate contract IT role. Have never worked in a daily rate contract role before.

How would the company pay the daily rate? Would they pay directly to my bank account each day or month or fortnightly?
Is it mandatory to have an accounting firm, to deal with the USC, PSRI etc? Would the salary be paid to the accountancy firm's bank account first and then to me?
Any thing to be beware of while entering a daily rate role?

Thanks...

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FishOnABike

How many different client companies will you have as a contractor? If you're 'contracting' to one client company in what amounts to a full time role you're not really a contractor.

MaxPayneXL

I would be working for just one company as contractor.

FishOnABike

https://www.boards.ie/discussion/comment/120546229#Comment_120546229

If you're working full time for one company, under their direct direction without the indepence to sub-assign contracted work it's probably not a true contractor relationship.

https://www.revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-on-employment-status.pdf

Revenue's view on it...

homer911

There are plenty of people who operate in this way and accounting businesses that can set you up as a director of one of their admin companies and will do all the invoicing for you, pay tax and directors PRSI and pay you the net after their tax-deductable fee, which is well worth it in my opinion.

Cant remember the name of the company I used in the past but they were great

xabi

Been doing it for 20 years, get an accountant. I have a LTD company that I pay myself a salary from, the accountant looks after my tax and the company's annual return, I do the VAT returns.

MaxPayneXL

Any good companies that anyone could suggest?

[Deleted User]

https://www.boards.ie/discussion/comment/120546565#Comment_120546565

Fenero

[Deleted User]

https://www.boards.ie/discussion/comment/120546565#Comment_120546565

I used Contracting Plus a good few times over the years.

I found them very good.

homer911

https://www.boards.ie/discussion/comment/120546576#Comment_120546576

Thats the one I used, very good

igCorcaigh

https://www.boards.ie/discussion/comment/120546565#Comment_120546565

I used to use Icon Accounting when I was contracting as a software developer and found them very good.

The salary was first paid to Icon, they done all the taxes, but I used to pay around €100pm for the service. Probably more now (this was a few years ago.)

You will have to keep track of your timesheets, and upload them to your accountant, and probably as well to your client.

You may have to wait for a month before your gross salary is paid to your bank account. So, that is two months of working before you see a penny. Make sure you have savings to cover that period, and if you are currently unemployed, ask Social Welfare for an extension to your SW payment for those two months.

You have two options: to go as an "employee" under an umbrella company, which the accountant will create for you, but you pay more tax, especially employer's PRSI. Or go self-employed: you pay less tax but will have no PRSI cover.

Also, remember that as a contractor, you will not get paid holidays, so factor that in to calculating which daily rate to ask for. The accountant will provide more information about this, and will help you calculate the right daily rate for you (which will be dependant on which sector of the IT industry, your experience, etc.)

Once you have more experience, you may decide to do your own taxes rather than pay the accountants' fee. Many contractors do this. I didn't want the hassle (or risk), and I didn't want to be without PRSI cover, so I chose the safer but more expensive option.

MaxPayneXL

The role is only for a couple of months. If the company is willing to pay the salary direct to my bank account, would it be mandatory to pay the tax? I know lots of taxi drivers declare the income themselves and pay tax for what they declare and NOT what they earn. Is it illegal?

FishOnABike

Tax evasion is illegal.

Mrs OBumble

If there is a salary, you are not a contractor. If you are a (daily rate or whatever) contractor, you only get paid on invoice.

Do not even think about not declaring income that comes into your bank account. Revenue have access to data about transactions made by (your employer ) Or (companies purchasing your services), - and to your bank account. Bank account = paper trail = needs to be declared.

TBH the questions you have asked so far are very naive. Give your lack of exposure in this area, I think you are best-suited to operating under an umbrella company.