Contracting question under CxC

I

iecontractor

Guest
Hi,

I've been contracting through CxC under the umbrella plan since mid August;

On my first payslip from CxC I received about 88% of the total amount paid. Which made sense, as CxC mentioned I would receive about 88% back when I first signed up.

The last payslip I received about 70% of the total amount. Because the contract was only 7 weeks, the last payslip was for September and 1 week of October, all in one.

On the last payslip I was charged PAYE (20% on the first 2833 and 41% on the rest) and on the first payslip I was charged no PAYE or PRSI . I was under the impression contractors did not pay PAYE as a normal employee would? Is this right?

Code: 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]Invoice value                              €3750.00[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]- Management fee                      -€125.00[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]-Employers PRSI                       -€351.86[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]Gross Salary                             €3273.14[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]PAYE:[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]2833.33 @ 20%                         566.67[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]439.81 @ 41%                           180.32[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]Total                                         746.99[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]- tax credits                               -293.33[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]PAYE Due                                €453.66[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]PRSI:[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]Gross Salary 3273.14 @ 2% health contributions 65.46[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]PRSI 3273.14 – 550.33 = 2722.81 @ 4% = 108.91[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial]Total Employee PRSI €174.37[/FONT][/COLOR][/COLOR][/SIZE][/FONT]
 
Contractors under a limited company of their own or an umbrella company pay PAYE like any other employee. If you had gone with your own limited company you'd be doing this yourself directly to Revenue every 3 months.

Contractors working as self-employed pay tax in one go on October 31st, but this doesn't apply to IT contractors really as most companies only hire through limited companies.
 
Brouhahaha said:
Contractors under a limited company of their own or an umbrella company pay PAYE like any other employee. If you had gone with your own limited company you'd be doing this yourself directly to Revenue every 3 months.
Click to expand...

Could be thinking of prsi.

Contractors are usually directors of their own company and as such pay
a single reduced prsi amount.

Not sure what the suitation is with cxc, but you are on the standard prsi rate,
you are loosing about 10% of your money doing this.
 
Ya - i was with cxcx in the past and changed to my own ltd company.

However i'm now changing back.

Having experienced both, life is just way easier witrh cxc if you ask me.
 
qwertyuiop said:
Ya - i was with cxcx in the past and changed to my own ltd company.

However i'm now changing back.

Having experienced both, life is just way easier witrh cxc if you ask me.
Click to expand...

With limited company you need to organise paying your own PAYE, PRSI and VAT to Revenue and would need an accountant for end of year company accounts. It's daunting at first but once you get on top of it it will work out cheaper than umbrella companies.

Personally I pay €800 (not Dublin price) for end of year accounts and do the rest myself using spreadsheets to keep track of things and www.ros.ie to pay the taxman. You also have the initial cost of setting up a limited company. CxC would remove the initial headaches but at a price.
 
Hi, I too am about to start using CXC, but have a major query.
Why am I paying employers PRSI? If I am deemed class A1 but not a limited company and therefore am not a director why are CXC not paying it. Also 125 a month in fees seems very high.
I am unfamiliar with how this works. Could some one help, please
 
You prob shuould have started a new thread.
But as far as I'm aware CXC make you a director of a Umbrella Ltd company, that's why you pay the Emp PRSI
125 a month is a bit high, but it does mean less paperwork for you
Personally I set up my own Ltd Co
 
For what it's worth I used cxc in australia and left them..found them way too expensive....also ended up paying less to the taxman by not using them...

In ireland I set up my own company ... once you've your first few months over it gets much easier....
 
If you set up your own limited company you also have more scope for claiming expenses against your invoices e.g. telephone bills, travel costs, computer costs. So you can reduce your tax bill that way. Limited companies also give you a lot of scope for tax planning via company pension contributions. And it's all pretty straight forward. You can get a contractor accountant to deal with all of your limited company accounts stuff plus tax and pension advice for €95 plus VAT per month.
 
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