PAYE worker taking on a “private job”

T

theoneill

Registered User
Messages
365
Hay Guys

I was wondering if some of you could help. A friend wants me to sub-contract on a design job for one of his clients however I am currently in full time employment and will have to do this after hours.

I would like to be tax compliant on this job but I’m unsure how to go about it.
Basically in order for it to be worth my while I will have to net about 4K, but I don’t know what the gross amount should be. I currently earn about 50K in my full time job, will this effect the gross amount I should charge the client?

This is all new territory for my so sorry if I’m not explaining myself properly

Any help / advice will be much appreciated
 
There are several existing threads on this sort of topic - i.e. PAYE employee with additional non PAYE income - which might be worth searching for.
 
if you're a top rate taxpayer and without allowing for any expenses which might be allowable, to net €4,000 you'd need about €7,400 gross, (tax & PRSI etc take about 46% ) That may or may not be acceptable to your client.
 
Can I not just fill in the additional income section of my tax return form?
I was planning on charging about 5,500 to get an income of 4K thinking that the revenue will
Calculate my yearly income as 55,500 instead of 50K
 
theoneill said:
Can I not just fill in the additional income section of my tax return form?
I was planning on charging about 5,500 to get an income of 4K thinking that the revenue will
Calculate my yearly income as 55,500 instead of 50K
Click to expand...

sorry, are you a 41% or 20% taxpayer? ( guessing 41% since one can't have a standard rate cut off of over €50,000. If you are 41% then the additional €5,500 would have tax/prsi of about €2,500 leaving you with €3,000 , not €4,000.
 
Ouch, at those prices I feel I'm ripping him off, but any less (net) I’m ripping myself off.
Thanks for the advice you've given me a lot to think about.
 
Remember, you may have expenses which would be "wholly and exclusively" for the job and these are allowable in arriving at taxable income. Not sure what they might be in your case but bear in mind.
 
You might well conclude that its not worth taking on the work. The existence of the 41% tax rate means that for many workers, overtime is pointless. Taking on extra work after hours is hard enough at the best of times and might not be worth it is half of what you earn disappears in tax & prsi.
 

Well I don't know... many small business owners do it every day.
 
I too am a PAYE worker on the higher tax band. I'm planning on starting my own business after my current job contract expires next year. Over the next few months I plan on phasing in my new business (consultancy based). By taking on additional work at the moment I realise I'm subject to ~46% tax/prsi, is there a way to set up as sole trader while being a PAYE worker at the same time??
 

Yes, you complete form [broken link removed].
 
extopia said:
Well I don't know... many small business owners do it every day.
Click to expand...

Equally, many small businesses are well used to turning down work offers when they deem the earnings from such work to be inadequate and/or they are already at full capacity.
 
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