Never contracted, but have heard tax can be between 15-20%

[SirMille]

Hi,

I have a few questions, I hope I'm in the right forum.

I was a permie employee, and now I've been made redundant.

Recruiters are asking me if I'd be interested in a contract, usually 3 to 6 months.

I have been told that if you are on €300 per day, i.e. €6,000 per month gross, it is possible to stay within the law and get your tax down to 20%.

Does this mean I would have a take home of €6000 * 0.8? = €4,800 net?

If this is the case, do I get the money in a timely fashion, or is that 48 an average number, were you might end up with little money up front and then a glut at the end of the tax year?

Sorry if these questions are dumber than a bag of rocks, but I have to ask as I'm getting worried about mortgage payments. I didn't receive any redundancy package, and with creche fees, the bills, it all adds up.

Thanks everyone

 

[WaterSprite]

Hi,


I have been told that if you are on €300 per day, i.e. €6,000 per month gross, it is possible to stay within the law and get your tax down to 20%.

Hmmmmm - who told you that and did they say how that is possible? On €72k gross a year, I find it hard (impossible) to believe that you can fall into the lower tax bracket. Self employed people aren't taxed in any different way to PAYE workers - they pay a lower PRSI/Health Levy %age but don't have a ceiling for payments. They also don't get the PAYE tax credit. The only thing they (we) can do is claim a broader range of expenses, but the range is not huge and, in any case, you are only claiming back tax on expenses already incurred and it won't bring your tax rate down...

If this is the case, do I get the money in a timely fashion, or is that 48 an average number, were you might end up with little money up front and then a glut at the end of the tax year?

This depends on what you intend to do. Would you be working through a recruiter or something? If you are a contractor, normally you would invoice for your services (e.g. monthly) and you can add on at least 30 days for payment but, assuming that your clients are regular payers, you should have a regular income. Don't know the reasoning behind thinking you'd have a glut at the end of the tax year - can you give more detail?

Whatever you do, save your tax payments and keep them locked away until tax time. I've seen a lot of people spend their tax and end up on a sticky wicket come tax time...

Sprite

 

[Kerak]

http://www.cxc.ie/

download the brochers and talk to them

and yes if you make hefty pension contrubutions 85% retention is achievable.

 

[hhhhhhhhhh]

and yes if you make hefty pension contrubutions 85% retention is achievable.

but not take home net pay as he asked.

don't forget holidays,sickdays, public holidays.

its all down to how you manage expenses,
technically all you get is a 5.75% increase in take home pay - loss of paye tax credit

 

[Kerak]

Experienced contractors budget for 46weeks, allows for holidays, bank holidays , a few sick days .

They also tend to work in excess 40 hours a week

Professional assistance is vital if setting up as a contractor, alot of speculation and poor advice out there

I personally pay my self 38hours a week, work on average 44, retain the rest and thus get 52x38 -- and probably have enough " banked" for double salary at Xmas.

Through prudent advice and careful management of expenses etc retention exceeds 80%, nor will I have a tax liability or refund at year end as tax,VAT is deducted/paid weekly by management company.