Make employee Redundant and hire back as consultant - Employer Savings???

B

Booh

Registered User
Messages
64
Sorry if wrong forum.

Can anyone tell me the cost savings to an employer if they made a Permanent Pensionable member of staff redundant and then agreed to hire them back as a consultant or a contractor?

Obvious Savings:
No Employer Pension Contribution - Assuming Defined Benefit Scheme

Would the employer save PRSI, if so what %?
Would the emplyer save anything else?

Thanks


 
Thanks complainer but my perspective maybe quite different.

My company needs my services but due to wage cuts and restrictions on bonuses across the board etc they can no longer afford to pay me what they used to. This is not working out for me at all.

Reluctantly therefore I need to either look for a new job that pays more OR come up with some other viable option that works for everyone.

One potential option I am thinking about is to ask my employer to give me voluntary redundancy and then hire me back as a consultant. I like the second option as it suits my short to medium term plans and it may also suit my employer if means not losing my services completely and it can be justified with some cost savings over having me as a permanent staff member. I know it comes with risks and loss of certain state benefits etc which I will need to fully explore but on the surface I am not overly concerned about that aspect.

What I want to identify is what the advantages are for my employer by paying me an up front redundancy package but then hiring me back as a self employed consultant/contractor?

Any ideas as to what the advantages are from employers perspective?

Monetary benefits....
Save employers PRSI?
Save the 22 days per annum paid Holidays
Save the defined benefit Pension Scheme employer contribution
Save Other employer benefits, mobile phone, expenses, PHI, Health insurance contribution etc....

Other non monetary bebefits?
 
No disrespect, but your perspective doesn't really matter. Revenue do not allow employers or employees to pick/choose when they are employees and when they are consultants. If you are working for the same business doing the same work, Revenue will deem you to be an employee.
 
that's fair enough, I didn't realise that, thanks.

So basically I will need to assume that my employer would still have to deduct PAYE and PRSI and pay employers PRSI and that the only savings they would see would be the rest of my "package" made up of pension, holidays and other benefits....
 
Plus I don't think that your taking voluntary redundancy would be kosher in these circumstances.
 
You must log in or register to reply here.
Back
Top