potential net income as a contractor

C

corkuser

Guest
Hi All,

Hoping for some advice regarding contract work.

My Circumstances are as follows:

Just landed a contract role at 31 euro per hour for 1 Year(assume 40 hours per week for 46 weeks).
My wife is a stay at home mum looking after the kids.

What approximately is the max I could earn in the year not including any expenses.
 
Hi,
Not sure if this is the simple answer but €31 per hour x 40 hours x 46 weeks = €57,040.
If your question is how much would your earn after tax then
45400 x 20% = 9080
11640 x 41% = 4772
PRSI 57040 x 3% 1711
H Levy 57040 x 4% 2282
I Levy 57040 x 2% 1141
18986
Less Cr 3660
15326
Earnings after tax €41,714
You would get in some business expenses travel, telephone ect you could also give a salary to your wife for looking after the books.
 
Hi

It depends on how you are set up - sole trader, umbrella company or personal limited company - but as a ballpark figure Joe's calculation is accurate, you would earn approx €3.5k per month,

As a sole trader or using umbrella company you don't have the option of employing your wife, this is only feasible if you have your own personal limited company and this may be the better solution if it is a long term contract - if your wife was employed by the company you can make full use of her standard rate cutoff point so (based on your income level) all your tax would be payable at 20% and none at the higher rate. This could increase your nett pay by about €200 per month

The calculations above are made on the basis of zero expenses and making assumptions about your tax credits, feel free to pm me if you want a more accurate calculation

Regards

podowd
www.prima.ie
 
podowd said:
Hi

As a sole trader or using umbrella company you don't have the option of employing your wife, this is only feasible if you have your own personal limited company and this may be the better solution if it is a long term contract

Regards

podowd
www.prima.ie
Click to expand...

It is possible for a sole-trader to employ their spouse in their business, pay them for the work they do and therefore the couple may avail of the spouses SRCOP which otherwise would be wasted. The employment is not insurable under PRSI but it is a valid employment once the spouse does indeed actually work.
 
Thanks for all the advice guys,

Things are a good bit clearer now.
 
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