When it comes to deciding how to manage your contractor payroll or locum payroll, there are two main options available in Ireland. You can set up your own personal limited company or choose a more managed payroll solution, known as an umbrella company. But what really is the difference?
A PAYE Umbrella Company is the easiest route into contracting. You are engaged as an employee, and the umbrella manages all your admin. This includes support with:
- Contracts and invoicing
- Tax deductions and payment through the umbrella company payroll
- Cover under the umbrella’s insurance policies
- Low cost, pay-as-you-use fee structure
What’s more, you retain your access to state welfare benefit and keep all the independence of a contractor, with freedom to chose your roles and manage your time.
A limited company is a stand-alone legal entity. You own it and you’re the boss. This approach can have its advantages, allowing you to process expenses tax free, take on employees and access more flexible pensions.
However, there are some big considerations to factor in when setting up a limited company. You take on a number of responsibilities such as:
- Costs; you will need to pay for an accountant, suitable insurance cover and annual filing, whether you are in contract or not.
- Directorship; being a Director is a big deal. You are legally responsible for your company’s management and records.
- Cover under the umbrella’s insurance policies
- Lack of security; accessing state welfare is more complex as a director, as you do not pay Class A PRSI.
Traditionally, the deciding factor for many has been the tax benefit of a directorship. However, with Keystone’s fresh and innovative tax planning solutions, the PAYE Umbrella company can now offer contractors simple, low admin access to the highest possible returns.
Some would call it having your cake and eating it. Thankfully, at Keystone, we really like cake.
If you would like further information on how we could increase your take home pay please call us on 01 264 0600, email us on sales@keystone-resourcing.ie or use our direct WhatsApp function on the website.