Self employed or employee?

heyho

Registered User
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15
Hi,

my partner has recently been offered a job. He has the option to become an employee, or to be a contractor, billing monthly.

Just wondering if anyone knows "in general", which is the better option (on the assumption that job security is not an issue)? Am thinking tax-wise self employed is probably better but I really don't know much about self employed taxation.

Any thoughts?
Thanks.
 
Being an employee is better for him as it preserves benefits and annual leave and other entitlements. Being self employed he is on his own for everything.

Also the revenue won't be long in finding that it is pseudo self employment forcing the employer to pay PRSI etc.
 
Thanks.
I thought someone could contract for approx a year before having to become a permanent employee, perhaps my information is incorrect.
 
There is a Revenue review of these pseudo "employee" contracts.

If some one is employed as an employee the employer has to pay 10.75% PRSI account for the fact that the person has annual leave of 20 days per annum and 9 bank holidays. possibly the employer has to pay redundancy, deal with notice periods ect. They will have to deal with all the legislation in relation to having employees.

If someone is engaged as a subcontractor the principle pays the invoice at the end of the month and thats it. So they will pay a premium for those benefits.

So to forego the benefits the employee/contractor has to calculate if the financial return merits it.
 
I would say employee is better. He will then have sick pay and holiday pay, he will also have access to benefits such as unemployment, which he wouldn't have as a self employed person.
 
Self-employed generally must register for, and charge VAT. They also incur other expenses, their own (mroe complicated) tax return as an example - and face mroe hurdles if looking for credit/mortgage.

They can however recover more expenses. For a lassle free life, I'd be an employee. But its also not that straight-forward either - its not a simple choice, and one typically out of the indiividual's hands - much depends on the Ts and Cs of the role.
 
The contract role will almost certainly pay a lot more. It's a personal choice really whether you go for benefits and some extra security (after a year) for lower pay, or few/no benefits, less security & more money.
 
Being an employee is better for him to get many benefits, annual leaves etc, being self employed will be very hectic for him.
 
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