self employment verses paye employment

M

Meath Lady

Registered User
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Asking for a friend. Are there advantages /disadvantages to being self employed as against being an employee. On a daily /weekly basis how much of a difference in pay would a person need to be getting to to cover holidays, bank holidays, lack of paye allowance etc. Please advise what else should be factored into a decision to accept self employment. thanks
 
Biggest issue is the uncertainty over remuneration.

1. PAYE income = 52000 per annum = 1000 per week.
On self employment, work on 40 weeks to allow for no work, holidays of those you work to etc. So each week worked as self employed you want to net 1300 per week.
2. PAYE tax,prsi etc , V self-employed , self employed is (for those used to paye) messier on taxes /allowances etc and not the (money maker) it is sometimes portrayed.
3. If he/she is getting self employed contract from present paye employer and is sure of good ongoing work @ a premium rate ,it can make sense,
though, Revenue are watching companies that foist self-employment when in reality its not !
4. As self employed your friend will (to succeed) probably work longer hours , be at the beck and call of people and not have agreed holidays,
5. There is a lovely freedom in self employment , provided you work hard.

Big issue is what present commitments mortgage etc your friend has.
 
How come the friend has a choice? The Revenue have broadly clamped down on contract work being classed as self-employment. What position is this person in that they can make a choice on the categorization?
 
Your friend would also lose out on the PAYE Tax credit. That's €1650 per annum. There is a new self employed one this year but it's just €500.
That means a loss of €1150 in hard cash (assuming he/she will be honest in his/her tax return regarding all income/costs etc.)
 
It would also be harder to claim social welfare assistance if needed in the future if self employed.
 
What is the context of this? Is the person an IT consultant doing daily rate or is it something else?

Working for yourself brings its own rewards but it is rarely financial in the first number of years. If they are looking at it in a purely financial sense, in the vast majority of cases, make more money as an employee for a number of years. If the self employed person has got their business established, they should earn more.

If it's daily rate work you are talking about, they will get paid more from the outset. There is huge demand for IT contractors at the moment and there is a lot of money to be made. The longest contract I've heard of is 2 years at which stage they have to become an employee. They will almost certainly have to set up a limited company too.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
What is the context of this? Is the person an IT consultant doing daily rate or is it something else?

Working for yourself brings its own rewards but it is rarely financial in the first number of years. If they are looking at it in a purely financial sense, in the vast majority of cases, make more money as an employee for a number of years. If the self employed person has got their business established, they should earn more.

If it's daily rate work you are talking about, they will get paid more from the outset. There is huge demand for IT contractors at the moment and there is a lot of money to be made. The longest contract I've heard of is 2 years at which stage they have to become an employee. They will almost certainly have to set up a limited company too.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Click to expand...
Hi, Friend is an engineer and is currently employed on a salary with a company, working very long hours and travelling a long distance to current project which will finish in the next two months. Current Company will keep him on but he has been offered another position with a different company as self employed engineer on a six month contract which will lightly be extended and eventually become an employee in that firm. Friend has no huge commitment currently but has a mortgage application pending .
My husband is self employed so I would tend to say steer away from this as times have been very lean this past few years but just wanted other peoples opinions and ideas. Thanks
 
If he has a mortgage application pending, he shouldn't make any changes to his employment until he closes. The mortgage lender will phone his employer before they close to confirm that he actually works there. If he goes out on contract, he won't get a mortgage.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
If he has a mortgage application pending, he shouldn't make any changes to his employment until he closes. The mortgage lender will phone his employer before they close to confirm that he actually works there. If he goes out on contract, he won't get a mortgage.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Click to expand...
didnt realise lender would ring his employer. Thanks for that.
 
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