Govt gears up to hammer self-employed contractors

It looks like the government is gearing up to hammer self-employed contractors by forcing  them (or the contractor who hires them) to pay employers’ PRSI.

This is what  Regina Doherty, the Minister for Social Protection, has to say in today’s Irish Times:

“There are great examples for argument’s sake in Portugal or Montreal where they have what is called a contractor’s tax, so people who work for a single company for maybe more than 70 or 80 per cent of their working week or month or year, that single company practically is that person’s employer for all intents and purposes and shouldn’t be able to escape the 10 per cent plus employer’s social insurance contribution.”

Employers’ PRSI is charged at between 8.6% and 10.85% of earnings. Contractors are likely to be doubly exposed as the rates they charge their customers are inclusive of overhead and other input costs.


Expect a flurry of new company formations in the coming months as self-employed contractors seek to protect themselves from this shakedown.