Irish payroll is transparent on payslips, but contractors still underestimate **PRSI Class S** and the cost of replacing **employer pension + health**.
Tax comparison
| Income | PAYE net (model) | Sole trader net (same headline) | | --- | --- | --- | | €50k | ~€36k | ~€31k on €50k profit | | €70k | ~€46k | Needs €78k+ profit to tie | | €100k | ~€61k | Watch real marginal rates + USC band 4 |
Benefits you lose
Employer pension (6–12% equivalent), group health (€1,200–€2,500/yr), death/disability covers.
Break-even profit
Expect +15–25% profit versus PAYE net for the same cash after tax.
Hidden costs
Preliminary tax, accountant, PI insurance, unpaid holiday.
When freelancing makes sense
Outside IR35-style arrangements, multiple clients, €450+ day rates in Dublin market.
When it does not
Mortgage stress tests with variable income, young families without savings buffers.
Real numbers: employer PRSI and USC
Median full-time earnings ~€45k-48k; Dublin tech contractors often need €550+ day rates for parity once Class S PRSI and no employer PRSI are netted out.
| Benchmark | Order of magnitude | Why it matters |
|---|---|---|
| Median gross (context) | ~€45k-48k | Use your cohort. |
| Employer PRSI | ~11.05% bands | Hidden load on payroll. |
| USC + PRSI employee | stacked | Marginals bite jumps. |
| Pension employer match | lost | AVC from profit. |
| VAT cash | bi-monthly | Working capital matters. |
Benefits gap — replacement costs
- Health: corporate schemes €1.2k-2.5k/yr equivalent—buy retail. - Income protection: group vs €800-2k/yr retail. - Death cover: often 2-4× salary as employee. - Training: €2k-4k/yr to stay current. - Sick pay: statutory thin—cash reserve needed.
The break-even point
Expect +20-35% more Schedule D profit than PAYE gross for similar cash after USC/PRSI and ops—lower multiplier than US but no paid leave still hurts.
Structures
- Sole trader — modeled here. - Ltd + salary — different splits. - RCT — construction withholding—separate cash rules.
Five-year sketch
3% PAYE growth vs 4% freelance day rate at 85% utilisation wins with multi-client pipeline. Mortgage tests may lag—keep €15k-30k buffer.
FAQ
Not modeled—contractors in construction need RCT-specific cash planning.
Different PRSI—get bespoke advice.
May lift net—not modeled in depth.
Year-end reconciliation can surprise—plan preliminary tax.
Near **€37,500** threshold—watch cash timing.
Two years of accounts often requested.
KEEP/RSU separate—different tax.
OSS/ICP VAT rules—consultant needed.