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.
Three Irish profiles who ran the numbers
Senior software engineer, Dublin
Current situation (employee):
€90,000 gross, net ~€59,000 (USC + PRSI + income tax). Hidden employer cost: PRSI 11.05% + pension 8% ~€17,145.
Question they’re asking:
I have a contract at €600/day outside PAYE — is that a real step up?
Freelance scenario:
Sole trader : €600/day × 200 = €120,000 revenue. Class S PRSI ~€4,800, income tax + USC ~€46,000, health €2,000, accountant €2,500, PI €1,500, pension AVC €6,000 → net ~€57,200.
Honest verdict:
€600/day ≈ break-even minus benefits. Dublin tech €650–900/day typical. Minimum to move ahead: €680/day. Preliminary tax year one hurts cash — don’t take €600/day without a 6-month guarantee.
Project manager, Cork
Current situation (employee):
€65,000 gross, net ~€44,000.
Question they’re asking:
What day rate matches my Cork salary?
Freelance scenario:
Break-even sole trader ~€72,000 profit. At 190 days = €379/day; at 170 = €424/day. At €400/day × 185 = €74,000 → net ~€45,800.
Honest verdict:
€400/day at 185 days = +€1,800 net — marginal. Cork PM market €350–500/day. Below €380/day you can trail PAYE. Ltd above €80k revenue can help efficiency.
UX / product designer, Dublin (employer conversion offer)
Current situation (employee):
€75,000 gross, net ~€50,000.
Question they’re asking:
My employer converts my role at ‘€75k equivalent day rate’ — fair?
Freelance scenario:
Trap : €75,000 ÷ 220 = €341/day salary math only. Minimum viable: €75,000 × 1.22 ÷ 185 = €495/day. At €500/day × 185 = €92,500 → Class S PRSI €3,700, tax + USC €33,500, health €2,000, accountant €2,500, bench €5,500 → net ~€45,300.
Honest verdict:
Even €500/day can land below €50k PAYE net at this band — Dublin sole-trader tax bites. Minimum: €550/day with 12-month contract. Below that it’s cost transfer to you.
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.
Coming soon: personalized transition kit
We are preparing country-specific checklists, break-even PDF exports, and vetted partner introductions (accountants, fiduciaries, umbrella companies). For now, save your results with the download or email tools on calculator pages where available.