Working as contractor, paying Employer PRSI

[Nermal]

I know someone who works on contract for a pharmaceutical multinational.

The arrangement is such that they work for an umbrella company who are paid by the multinational. The agency that runs the umbrella company deduct tax and PRSI and account for submitted expenses. I have two questions:

She is paying both employee and employer PRSI. Is some other structure possible in which she'd only be paying employee?

The agency charges €125 per month for the service, this seems quite high, is it the 'going rate' for such an arrangement?

 

[Glenbhoy]

Directors with more than 15% of the shareholding in a company pay class S prsi at 5%. Employer and employee prsi are not applicable to them.

 

[RainyDay]

Presumably she is not a director of the umbrella company?

 

[z109]

I've been in a superficially similar position in the IT industry, where the option was to be a contract employee through an umbrella company or to have my own Ltd company, which also had to bill through the contract company, but got paid at a lower rate!

The problem I had was that the primary employer (the pharma company, in your friend's case) would only deal with one umbrella company for contractors (which they owned!). Is this the case with your friend or would it be possible to set up a Ltd company and contract directly with the pharma company?

 

[Glenbhoy]

Presumably she is not a director of the umbrella company?

Whoops, didn't read the OP properly, presumed it was the old limited company scheme many IT contractors use.

 

[Nermal]

She is not a director of the umbrella company.

Is this the case with your friend or would it be possible to set up a Ltd company and contract directly with the pharma company?

I'll have to find that out. Would the idea in this case be to name her as a director, and as Glenbhoy says, exempt her from employee/employer and pay class 'S'?