minimum wage for a self-employed person

PlanBee

Hi,

I am just wondering how much minimum wage a self-employed person can pay himself on quarterly payment basis:
8.65 euro*40 hours a week=euro 1384*4 = euro 5536 per year is Gross pay,
then minus 4% prsi (5536*0.04=221.44 euro, no paye tax, so net pay = 5314.56 euro, or 1328.64 = net pay himself every quarter

is that correct?

Alan Shore

Wages don't apply to self employed people. You can take the profits of the business.

modmuffin

PlanBee wrote: »

Hi,

I am just wondering how much minimum wage a self-employed person can pay himself on quarterly payment basis:
8.65 euro*40 hours a week=euro 1384*4 = euro 5536 per year is Gross pay,
then minus 4% prsi (5536*0.04=221.44 euro, no paye tax, so net pay = 5314.56 euro, or 1328.64 = net pay himself every quarter

is that correct?

Something funky with your maths there, minimum wage is around €17k per year.

To answer your question, you can pay yourself as little as you wish or as much as the business can sustain.

I pay myself up to the standard rate of tax, I think this is around €32k for most people (it will vary depending on tax credits and personal circumstances)

jimmii

I would imagine quite a high percentage of self-employed people pay themselves less than €8.65 an hour and work a lot more than 40 hours a week.

PlanBee

modmuffin wrote: »

Something funky with your maths there, minimum wage is around €17k per year.

To answer your question, you can pay yourself as little as you wish or as much as the business can sustain

I pay myself once a quarter, not every month, that is where the calculation came from

farfallaa

Well I don't pay myself at the moment but I guess this happens to many start-upers.. my business needs money more than I do. However I would avoid paying wages to myself - I would rather take profits of the company if I was a soletrader.

Victor

PlanBee wrote: »

8.65 euro*40 hours a week=euro 1384*4 = euro 5536 per year is Gross pay,

That is 160 hours worked per quarter, when 40 hours per week is 520 hours per quarter. Note that there are more than 4 weeks in a month and that you need to account for holidays.

DubTony

PlanBee wrote: »

I pay myself once a quarter, not every month, that is where the calculation came from

Your calculation is wrong

Go here for some help

PlanBee wrote: »

Hi,

I am just wondering how much minimum wage a self-employed person can pay himself on quarterly payment basis:
8.65 euro*40 hours a week=euro 1384*4 = euro 5536 per year is Gross pay,
then minus 4% prsi (5536*0.04=221.44 euro, no paye tax, so net pay = 5314.56 euro, or 1328.64 = net pay himself every quarter

is that correct?

See what you did there?

PlanBee

Victor wrote: »

That is 160 hours worked per quarter, when 40 hours per week is 520 hours per quarter. Note that there are more than 4 weeks in a month and that you need to account for holidays.

Thanks Victor, that's correct, however I can afford to pay myself 1384 euro quarterly only which is calculated on a monthly basis, my question is how my calculation is right for the year regarding tax paye and prsi, I presume there are not paye and usc, just 4% prsi

Graham

Minimum||
Hourly Rate|

8.65

|
Weekly Hours|

40

|(hourly rate X weekly hours)
Weekly Pay|

€346

|
Annual Pay |

€17992

|(weekly pay x 52)
Quarterly Pay|

€4498

|(annual pay ÷ 4)
Monthly Pay|

€1499

|(annual pay ÷ 12)


I'd recommend you seek professional help.

SpaceTime

You'll find it varies enormously when you're starting up too! In most businesses you will have some good months and some scary months. So, you need to ensure you've a provision in your plans for that.

The banks are also not as willing to grant business overdrafts as they used to be. It can mean months of Aldi tea bags and relying on someone else to put dinner on the table

Being self employed has really big upsides but the downside is there are profits not wages and your income will often be your last priority in terms of payments.

I'm not trying to put you off but you definitely need a passion for more than just the financial reward as there quite often isn't any for a long time.

Also get yourself an accountant who is used to dealing with small business. You'd be amazed at how much they save you headaches and money.

PlanBee

SpaceTime wrote: »

You'll find it varies enormously when you're starting up too! In most businesses you will have some good months and some scary months. So, you need to ensure you've a provision in your plans for that.

The banks are also not as willing to grant business overdrafts as they used to be. It can mean months of Aldi tea bags and relying on someone else to put dinner on the table

Being self employed has really big upsides but the downside is there are profits not wages and your income will often be your last priority in terms of payments.

I'm not trying to put you off but you definitely need a passion for more than just the financial reward as there quite often isn't any for a long time.

Also get yourself an accountant who is used to dealing with small business. You'd be amazed at how much they save you headaches and money.

Thank you both Graham and SpaceTime, I'll try to follow your advices

ambera52

Hi, I was in business for 7 years just ceased sole trader in May 13, my own advice to you or any one in business is. if you can not make good money after 3 month of 6 month after the start up of your business. please stop and think again. its a circle and you will put your head inside it and risk your family life style and please try not to work in credits ever.
and very good luck to yourself. just read my post landlord can change the door locks!
Thanks