Sole-trader and employee at the same time

Kalada

Registered User
Messages
30
Hi,

I'm currently employed. The employer pays me in per hour-basis. Apart of that, I'm also a sole-trader.

Tax-wise I'm not sure if this situation can be the most convenient in the long-term. I've been told it might be fine if my business as sole-trader just give me a few hundreds a month but never more than what my monthly salary would be.

I have the option of asking my current employer to invoicing him every end of the month so I pay my taxes or keeping in the same scenario.

I understand that being employee has the rights of sick-leave, paid holidays, etc.

What would you do in my situation?
 

Nutso

Frequent Poster
Messages
549
Continue as you are. You have the benefit of insured employment and can continue as a sole trader "on the side". You will need to keep track of your earnings via both, so that you can have some idea of what your tax bill will be for your sole trader business and put aside some money each month to cover it.
 

Kalada

Registered User
Messages
30
What if I decide to bill my employer so I'm a 100% sole trader?

Once my income passes over 5000 euros per annum, 4% is applied. This percentage will include all taxes related to PAYE/USC/public pension, etc?
 

notabene

Frequent Poster
Messages
379
If you bill your employer as a sole trader your employer will no longer be paying PRSI for you and you will be paying at a lower rate as a sole trader so you have fewer rights regarding social welfare. Does your employer pay you sick pay or any other benefits such as maternity benefit as you would be at the loss of these as a sole trader.

Also there could be potential issues with revenue for your employer if you become a sole trader depending on the arrangement of your work if you becoming a full time sole trader - there are several tests they use to determine whether you are a sole trader or an employee (for example, where are you working, what equipment do you use (yours/theirs) how much say do you have in the work you are doing etc) but they have cracked down a lot on companies using people as sole traders when they should really be employees.
 

Mrs Vimes

Frequent Poster
Messages
952
Tax-wise I'm not sure if this situation can be the most convenient in the long-term. I've been told it might be fine if my business as sole-trader just give me a few hundreds a month but never more than what my monthly salary would be.
You can chose whether to allocate your personal tax credit and rateband to your employment or pay higher tax in employment and lower on self-employed income. It isn't unusual for someone to have both types of income - self-employed picking up a few shifts here and there or employees with a sideline. From a tax point of view it makes no difference which is the main source of income.
 
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