RCT/hour rate

Thespoofer

Quick one guys if anyone can help.

What kind of hourly rate could an experienced tradesman ( let's just say carpenter) charge a contractor through the RCT system.

If normal paye/hour rate was approx €25/hr, at what level would a contractor still be happy to pay taking into account none of the prsi, holidays etc etc would have to be paid by them.

Thanks.

Taxes

In order to make it worthwhile for yourself, you must charge the principal contractor a premium for your services. As this arrangement is inherently riskier than a typical employee/employer relationship.

Take your salary for the current year. Adjust this to account for next years projected inflation.

Add a risk premium, anywhere between 40-50%.

As a sub contractor, you will not be paid for weekdays, sick leave etc. So make a calculation as to how many days you will likely work next year.

Calculate how many hours on average you will work per day next year and multiply by the number of days you have roughly determined you will work next year.

Divide your projected earnings for next year by the total number of hours you will likely work next year.

Example: you were paid a salary of €50k in 2022 by your employer.

Adjust for projected inflation and add a risk premium of 40%.

€50k *1.05 * 1.40 = €73,500

You plan to work 6 days per week, take 4 weeks holiday, allow for 2 weeks illnesses throughout year and 13 bank holidays.

365 - 52 - 24 - 12 - 13 = 264 working days.

You plan to work 8 hours net per day.

264 * 8 = 2,112 working hours annually.

Rate per hour = €73,500/ 2,112 = €34.80 per hour.

Obviously the above example is a high-level calc and will vary depending on facts and circumstances .

Thespoofer

Thank you very much for going to the trouble with this detailed response. Much appreciated.

2011

Good post by Taxes, just to add I would ask others what they are getting paid. You don't want to sell yourself short.

I have been suprised at the high horuly rates I have found contractors charging.

upinthesky

Depends on line of work but do you not price per job, RCT is automatically deducted form payment and it’s normally 20 percent, I would take into account the next tax bracket and is it worth while falling into that..

Thespoofer

I understand your reasoning here, no point in working for the taxman but my thinking is to work less earn more ( more per hour ).

I'm at a point in life where the mortgage is almost paid off ( couple of years left on it ). I've been speaking to a person whom I've worked for in the past, a good while ago now and been very upfront about having a better work/life balance , maybe working 3-4 days/week.

He's also at a stage in life where if he had someone such as myself whom he knows he can rely on , it could also see him into his later years and be beneficial to both parties.

Its actually quite refreshing to speak to a contractor whom understands the work/life balance and us not immediately dismissive.