Ireland: Contractor vs Employee
In Ireland an employee and a sole trader on the same income take home almost the same - both pay PAYE, USC and 4.1% PRSI. The real difference is the employer PRSI a client doesn't pay.
How to use it
- Enter your annual income. The gross salary or business income to compare.
- Compare the two. PayGlance shows employee net and sole-trader net side by side.
- See the rate headroom. The employer PRSI (~11.15%) a client avoids is the margin contractors price in.
FAQs
Do Irish contractors take home more than employees?
At the individual level, barely - an employee (PRSI Class A) and a sole trader (PRSI Class S) both pay 4.1% PRSI plus PAYE and USC, so net pay is almost identical. The advantage is that the client saves employer PRSI of about 11.15%, which contractors often build into a higher day rate.
What about a limited company?
Trading through a company adds corporation tax and dividend planning, which can change the picture - this tool compares employee versus sole trader, not the company route.
Is this exact?
It's an estimate: it ignores deductible business expenses, VAT registration and pension contributions.