Contracting

I tend to mix going back and forth between contracting and permanent roles, going the other way at the moment, sort of regretting the decision but we'll see.

Anyway, in my experience I've always found contracting a lot more flexible than permanent employment, simple put if you're not there you don't get paid. You'll likely still need to follow company procedures in looking for time off etc., but your time off isn't pulled from a pool of holiday days for instance.

In general contracting days are averaged at 220 days per year, so that takes into account public and personal holiday days. Of course you can work more, or possibly less, really depends on the company and their requirements. My last contract was extended by a pool of days, and I was able to stretch those days over a longer period by working slightly shorter weeks as it fitted in better with others on the project - worked a treat.

Likewise 9 to 5ish etc, you're only paid for an amount of hours per day, but like anywhere this sort of things tends to be based on company culture, some contractors are very much 9 to 5.xx only, I've always tended to be a bit more flexible, definitely the more flexible the company is the more flexible I tend to be.

If this is your first contract, and you're testing the water as it where, it's probably easier to go via an umbrella company. It's a little more expensive and less flexible than having your own company, but all you need to do is supply timesheets and it pretty much takes care of itself. If you're contracting longer term, then you should probably look at forming your own company.

HTH

D.

How much more money do people get contacting anyway? I've heard three to four times as much as a regular employee, which sounds great.

Although I imagine you're giving up job security, severance and job perks.

a fat guy wrote: »

How much more money do people get contacting anyway? I've heard three to four times as much as a regular employee, which sounds great.

Here - check that yourself.

a fat guy wrote: »

Although I imagine you're giving up job security, severance and job perks.

With current job market in IT the job security is not a problem for most experienced people.

How do you even 'break-in' to contracting per-se ? Is it really only for people at a senior ( 5-10 years ) level ?

Do you need a speciality ?

I am only a junior developer (2-3 years exp.) working in a multi-national, but long term I want to be a contractor. Does anyone have any advice to put myself on the path to getting there ?

Graham wrote: »

The only real way to try contracting is to actually do it. You occasionally get a bit of attitude from permanent staff with a grudge and you'll occassionally find a bit more is expected of you particularly in terms of 'hitting the ground running'.

More often than not you'll be treated like everyone else on the team and you'll just get on with the job. Interviews will become second nature, you'll learn to avoid the politics, you'll keep promising yourself a really good long holiday as soon as this contracts over and if you're smart you'll keep re-investing in your training/professional education.

Being contractor myself for a number of years, all I can add to this is: spot on, sir

Rua1 wrote: »

I'm considering a move to contracting from a permanent role. I'm based in Wicklow, but work in Dublin. I'm a SQL server/C sharp developer.

I have a one year old, am I crazy to be considering this?

Nobody else seems to have mentioned this, but you don't get maternity as a contractor. If there is anything other than zero chance of another baby in the next three years, you'd be mad to leave your existing permanent role.

Note also that you can't get pregnant during a long term contract. So if you sign for twelve months, you must serve out that twelve months, otherwise you're in breach.

What happens if either myself or the nipper is sick and my husband is unable to take the day to look after him?

Some clients are good about this. Most are not. They expect contractors to not come with the hassle of permanent employees. In any case, you won't get paid for any days off. Some clients will insist you use weekends to make up any weekdays missed. You have after all signed a contract, it's rigid from a legal perspective.

Is it OK to leave at regular times e.g. 5pm?

This part is generally better than being permanent. You are contracted for a fixed duration, so you work not a minute past your contracted amount. Obviously don't be a total arse about it, if there is some genuine deadline then you might work a little extra. But you always insist on being paid pro rata for any overtime.

How do people manage their affairs here - e.g. do you go the umbrella company route? Any recommendations?

If your husband wasn't otherwise working, the limited company route could hire him as a Director which can be useful for taxation.

But as he is working, an umbrella or going PAYE is much easier.

What about holidays planned mid contract?

As a general rule you don't take any time off at all during a contract. You take your holidays between contracts, ideally in off season when it's cheap and uncrowded.

Also ignore any notions that you'll earn more despite what others have posted. They're quoting gross income before all the expenses your employer pays for you. Once you've paid PRSI, pension, training and accounted for not earning between contracts or when sick, it's about 10% more. At least that's been the case for me in eight years of contracting.

There are lots of other good reasons for contracting, but in Ireland improved income is not one of them. Our tax system doesn't have loopholes that the British and US tax systems do, plus we cannot retain earnings in a close company in order to even out annual income, you are forced to either pay it out or else put it into the pension. It's most unfortunate when you get a bad year like this year for me, I've been out of contract since January and Jobseekers does not pay out unless you wind up your limited company. We are running quite low on cash, yet I cannot tap a penny of that pension.

Niall

srsly78 wrote: »

You should ask this on the state benefits forum, but my understanding is that if you have paid the necessary contributions in the relevant year you will then get the benefit. These benefits run out after only 9 months tho, and you won't be able to claim JSA unless you stop being self-employed (wind up company or cease trading).

Actually it depends on the stamps you have accumulated.

If you pay class A stamps, you get up to 9 months JSB.

If you pay class S stamps, you may get JSA after a means test and you have proven you have wound up your company with no chance of further business. Note that Welfare will take the view that as a highly skilled computer programmer, if you're not getting employed quickly, you can't obviously be taking the first job offered to you. They don't deny you JSA, they just string you out for many, many months of no income to discourage you unofficially.

If you have mixed class A and class S stamps, then it gets a bit more complex, but basically your class A stamps "expire" according to a set formula and your length of JSB drops accordingly.

Maternity benefit pays to both types of stamp, but you need continuous stamps for set periods of time before having the child, all of which is detailed on the welfare website.

Niall

Graham wrote: »

Wouldn't it be much easier for the OP mirrorwall14 to avoid 'self-employment' altogether by either being paid by the agency/employer on a PAYE basis, or by using an umbrella company to do the same.

If the OP is finding contract work through an agency, they're unlikely to accept a self-employed basis anyway.

Easier sure, but you end up paying punitive rate of tax then. The umbrella company will usually subtract the employers 10.5% prsi contribution from wages.

None of this really matters tho, stamps only last 9 months! So work out what 9 months of benefits are worth, decide if this is worth risking to be contractor. Calculation will be different depending on marital status and number of kids etc.

The whole system is a joke. If you are a responsible self-employed person and actually try to save for a rainy day this may get held against you in the means-test. Savings work against you, but invest in property and that doesn't get counted...

Graham wrote: »

Wouldn't it be much easier for the OP mirrorwall14 to avoid 'self-employment' altogether by either being paid by the agency/employer on a PAYE basis, or by using an umbrella company to do the same.

As far as I am aware, there is nothing stopping you choosing to pay class A stamps even as a Company Director. Revenue and Welfare certainly don't mind.

However the total payable in 9 months of JSB relative to 10.75% of your income is likely not worth it unless your Director's income is low.

Niall

Cona wrote: »

Question here in relation to contracting...I have the option of contracting direct to the company rather than through an agency, which I understand is more beneficial to both sides.

My question is, do I still need an umbrella company or ltd if I am contracting direct or is there some way that the company takes the tax direct before it pays me?
Bit confused on this....

No there isn't. You're setting up a company to provide the services to the client, and you are a director of that company. So you're responsible for collecting VAT on your invoices and paying that to Revenue as well as paying the income tax yourself.

It's not hard though once you've been told how the system works and you can use an online accounting platform to do all the work for you. I have no affiliation here but I use Bullet HQ as it's reasonably priced and does everything for me (generating the VAT3 and P30's for me so I just need to uploaded them etc).