Stay working as a PAYE worker or switch to contractor?

As a self-employed contractor, you'll be responsible for your PRSI which will change from class A to class S. Check what benefits you'll be entitled to under the new class (unemployment, illness, pension).

https://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/social_insurance_prsi/social_insurance_classes.html

Only you can answer this but what are the long term prospects for the company? Is the work you do with them transferable to other companies?

What are they like to work for generally?

Only asking this as you won't have any redundancy rights as a contractor. Your security of tenure is pretty much non existent.

So while you would be financially much better of on the gross income side of things you do need to factor in the type of pension scheme you are leaving, medical insurance, salary protection cover, contracting costs, annual leave, sick leave etc as well as, in your case, ten years service.

There is a worst case scenario where the company offer this to employees, some employees resign and take them up on the office and a month or two later the company terminate the contracts saving them much redundancy and headaches. Would be poor form but only you would have an idea whether that might happen or in the case of if happening, how easily you got get a permanent or contracting role elsewhere.

It is €27,120 extra not €37,000 or €30,000.

52 weeks per annum less 4 weeks statutory annual leave less 11 public holidays per annum.

52-4-2=46

46*40=1840 hours per annum

1840 x €43 hours = €79,120

€79,120 - €52,000 = €27,120

You will need to file an annual tax return, and pay your taxes on time. You can do that yourself or engage an accountant to do it for you. If you fail to file your annual tax return on time you are subject a surcharge of 10% of Tax payable, that is Tax payable not Tax actually paid. Meaning you may have already paid your tax but if you fail to file on time you will still be hit with a 10% surcharge.

You will have no entitlement to statutory redundancy and no recourse in the event of dismissal.

Also know its harder to get mortgages or credit as self employed.

Also they could let you know with a days notice that they don't need you anymore. Unless you get something put in your contract.

With PAYE you do have the security of not being told you don't have a job tomorrow they have to do pay you off.

As a self-employed contractor at the moment, I am saving on Tax as my wife is on maternity leave and were both directors in the company but its not worth it in the long run as we're finding it very hard to get a mortgage or even income protection insurance. If I had a minor injury tomorrow which meant I couldn't work I can't send in my invoice at the end of the month and the bills won't get paid whereas depending on the company they might pay you for a week or 6 months.

You're giving up a lot of your rights for a bit more cash.

Expanding on the maths.. from a tax perspective you're going to be paying the higher rate on all of your increase given you are already over the standard rate cutoff point for the year. You'll also be subject to the highest rate of USC on some of your earnings which will drop your actual take home increase further. Taking the other posters figures above (assuming you work 46 weeks and bring in 79,120) below is roughly how your tax would compare.

This is assuming standard credits. You might be entitled to others (like medical insurance relief if you dont get a reduction at source etc). I havent factored in pension here. Any contribution you make would drop your tax amount (but your take home wont go above the below if my calcs are correct). I have also assumed you currently pay BIK on your health insurance policy. As a contractor you would need to get your own health insurance (price will obviously depend on your age, any dependants etc. but you should factor this in as something that reduce the impact of any increase you get! Pretty sure itll run into a couple of grand a year)

Roughly, you'll take home 14.8K more a year than your currently do. A pretty good increase but worth considering what you are losing and the cost to replace them. A few things below...

1) Health Insurance as above

2) Income protection.. you'll need to pay for your own policy here. Especially relevant I think if you go looking for a mortgage as I think this is a requirement

3) Sick days... if you're sick you'll lose a full days pay. You can claim from DSP but think there's a cap of 110 a day

4) Pension contributions... If your company currently matches pension contributions you'll lose that. For example, if you company matches up to 5% and you currenly pay 5% into your pension (on your 52 salary) that is an annual contributon of 5,200 per year. You would have to pay all of this in your self if you wanted to keep the same level of pension contributions up

The last one if obviously job security, as a contractor you can be let go pretty easily with limited notice. As a PAYE employee you would have to be made redundant. Its worth giving it some thought but not something to do lightly

There are indeed, and if any of those get audited, they will be in for a very difficult time.

I have first hand experience of this. Not myself, but have been directly involved in a revenue audit where this was a major issue, and cost both the company and contractor a lot of money and grief.

Good to know - cheers.