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Paye or contractor

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  • 21-04-2017 8:34pm
    #1
    goonup
    Registered Users Posts: 49 ✭


    I've been offered a role with a Salery of 80k per year with no perks.

    It was also brought up about going in as a contractor. If I go down that route, I'm guessing I'd need a day rate of €450 per day.

    What do you think is the better option?

    Thankd


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    #2
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    goonup wrote: »
    I've been offered a role with a Salery of 80k per year with no perks.

    It was also brought up about going in as a contractor. If I go down that route, I'm guessing I'd need a day rate of €450 per day.

    What do you think is the better option?

    Thankd

    I can't see you'd be any better off on your proposed day rate. Why would you consider the contract option unless there's a significant financial benefit?

    It wouldn't be unusual for an 80k permanent role to pay 50% - 100%+ more in a contract role.


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    #3
    L.Jenkins
    Moderators, Computer Games Moderators, Technology & Internet Moderators Posts: 19,240 Mod ✭✭✭✭L.Jenkins


    If you work 48 weeks, taking into account time off, bank holidays and so on, you'll come out with ?108,000 per year. The catch is, you'll pay your own PAYE, PRSI, USC and if applicable, LPT.

    If you do go contracting, you may want to take into account pension contributions and VHI or similar as well. All before your final pay.


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    #4
    goonup
    Registered Users Posts: 49 ✭goonup


    Graham wrote: »
    goonup wrote: »
    I've been offered a role with a Salery of 80k per year with no perks.

    It was also brought up about going in as a contractor. If I go down that route, I'm guessing I'd need a day rate of €450 per day.

    What do you think is the better option?

    Thankd

    I can't see you'd be any better off on your proposed day rate. Why would you consider the contract option unless there's a significant financial benefit?

    It wouldn't be unusual for an 80k permanent role to pay 50% - 100%+ more in a contract role.

    50% more...... I had in my head 25%. Would 50% be the norm?


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    #5
    goonup
    Registered Users Posts: 49 ✭goonup


    L.Jenkins wrote: »
    If you work 48 weeks, taking into account time off, bank holidays and so on, you'll come out with ?108,000 per year. The catch is, you'll pay your own PAYE, PRSI, USC and if applicable, LPT.

    If you do go contracting, you may want to take into account pension contributions and VHI or similar as well. All before your final pay.

    If I went paye, I wouldn't get a pension or vhi paid. So that wil have to come my wages as it is


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    #6
    srsly78
    Registered Users Posts: 7,157 ✭✭✭srsly78


    L.Jenkins wrote: »
    If you do go contracting, you may want to take into account pension contributions and VHI or similar as well. All before your final pay.

    Contractor can set up their own occupational pension fund, and avail of more tax relief than most permanent employees.


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    #7
    Wheeliebin30
    Closed Accounts Posts: 5,593 ✭✭✭Wheeliebin30


    srsly78 wrote: »
    Contractor can set up their own occupational pension fund, and avail of more tax relief than most permanent employees.

    What tax relief?


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    #8
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,688 Mod ✭✭✭✭Stheno


    Wheeliebin30 wrote: »
    What tax relief?

    If you contract using a ltd company as a director, you can claim offset a much higher amount of pension contributions against the overall income than a paye employee would.

    Depends on age, but can be up to 50% of turnover iirc.


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    #9
    goonup
    Registered Users Posts: 49 ✭goonup


    Stheno wrote: »
    Wheeliebin30 wrote: »
    What tax relief?

    If you contract using a ltd company as a director, you can claim offset a much higher amount of pension contributions against the overall income than a paye employee would.

    Depends on age, but can be up to 50% of turnover iirc.

    As far as I understand you can offset a lot of expenses against the business such as broadband, mileage, phones etc. The pension as well. I think you pay class s prsi as well.

    If the rate is right, it looks the more attractive option to me at the moment


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