How can an Umbrella Company Help with Contracting in Ireland?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Ireland. Even better, most are experts in Ireland and expat tax law, meaning they’ll also help you optimise your earnings in Ireland.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Ireland.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Ireland, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Ireland and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Ireland
One of the most consistently challenging aspects of contracting in Ireland is complying with the country’s tax system. As well as paying tax in Ireland, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Ireland
If you’re working in Ireland under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Ireland for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Ireland, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Ireland through PAYE is left with the prospect of doing everything themselves.
Do you know much about Irish Tax Law? Does Ireland have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Ireland can range from 20 to 40 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Ireland
|When Do You Need to Lodge Your Tax Return?||After the tax year (Calendar year)|
|Tax Filing Deadline||31 October. If filed between 1 November and 31 December, a surcharge penalty of 5% applied. If filed after 31 December, a surcharge penalty of 10% applies.|
|Can you file it online?||Yes, https://www.revenue.ie/en/Home.aspx|
How to File Taxes in Ireland as a Contractor
Personal income tax in Ireland is based on a process of self-assessment. Filing taxes in Ireland involve the following steps:
Step 1: Apply for a Revenue Online Service (ROS) Access Number (RAN). This will be sent out by post to your chosen address within 3 working days.
Step 2: Apply for your Digital Certificate using your RAN number. A ROS system password will be sent to your address within 3 working days.
Step 3: Using the ROS password, you can retrieve your ROS Digital Certificate which allows you to access ROS.
Step 4: If this is your first time filing a self-assessment Form 11, make sure you are registered for income taxes by completing a Form TR1, found on the ROS website.
Step 5: Complete the required form:
- Form 11: Anyone with earnings outside of the PAYE system.
- Form 12: PAYE employees and pensioners.
Step 6: Complete your statement of Net Liabilities and Pay.
Step 7: Submit the tax return to Revenue.
Tax Figures in Ireland
|Tax-free Threshold in Ireland||None|
|Income Tax Rates||
The above table represents the income tax rates for single individuals.
For married couples or civil partners, taxation is jointly assessed.
Tax Residency in Ireland
When do you become a tax resident in Ireland
You become a tax resident in Ireland when:
- You spend 183 days or more in Ireland during the calendar year.
- You spend an aggregate of 280 or more days in Ireland during the previous 2 tax-year periods, with more than 30 days in Ireland each tax year.
- If you have been a tax resident in Ireland for 3 consecutive years, you will obtain ordinary residence. If you cease to be a tax resident, you will be continue to be treated as an ordinary resident for 3 years after departure.
Does the 183 day rule apply in Ireland
Am I taxed on my global income in Ireland
Yes, but the following exceptions apply:
- Foreign-domiciled individuals.
- Individuals who commute to work outside Ireland and pay tax on the income from the employment outside Ireland.
Can you set up your own Limited Company in Ireland?
|How long does it take to set up||5 days|
|How much does it cost||120.28 EUR|
|Is it easy?||Starting a business rank: 8. High rank means it is easy to start a business in Ireland.|
Tax Calculator in Ireland
If you are a contractor and want a calculation on your tax and net retention in Ireland, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Ireland
Contractors in Ireland are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Irish umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Irish taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Irish tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Ireland
We work with numerous umbrella companies in Ireland, many of whom are experts in tax and immigration laws. If you have any questions about tax in Ireland, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Irish work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Ireland but without the overhead of directly dealing with the Irish tax authorities. Get in touch with us today for some reliable advice on tax in Ireland!
A Contractor’s Guide to Work Permits in Ireland
Immigration is one of the primary concerns for any contractor hoping to start working in Ireland. Permanent employees will find it easy to get their Irish work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
In Ireland, there are 9 different employment permits of which the General Employment Permit and Critical Skills Employment Permit are the most relevant to an independent contractor. The General Employment Permit is available for occupations with an annual remuneration of 30,000 EUR or more and a labour market means test is usually required. The Critical Skills Employment Permit is available for most occupations with annual remuneration of over 60,000 EUR and no labour market means test is required.
These Irish work permits are dependent on the sponsorship from the prospective employer because it confirms that you’ll be earning money during your stay in the country. Contracting in Ireland is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Ireland (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Ireland. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Ireland and match contractors with the right company for them. If you’ve already secured a contract in Ireland, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).