As spooky season descends upon us here at Icon Accounting, we're tackling some of the spine-tingling challenges you might think you'll encounter in your career or contracting journey. Here's why you can cast aside your fears about these myths as a contractor!
Myth 1: Contractors Don't Retain Social Welfare Benefits
Some candidates starting their contracting journey may think that changes to their tax rates and operating as self-employed means they won’t make contributions to social welfare benefits. However, that's simply not the case. Opting for a PAYE Umbrella Company structure can ensure that you retain your Class A PRSI contributions and your normal social welfare contributions. Alternatively, if you do decide to pay Class S PRSI, there have been significant advancements in welfare entitlements for Contractors and it will mean you continue to make contributions to the jobseeker benefit, the state pension, and parental benefits too. Starting from the last quarter of 2019, Contractors are also entitled to access Jobseekers' Benefit for the first time in the history of the State.
Myth 2: Contractors Can't Get a Mortgage
Applying for a mortgage can be a confusing experience in itself. Misconceptions such as ‘contractor candidates cannot obtain a mortgage’ add to the frustration and headache!
Thankfully, contractors are no different to any other person who’s decided to become self-employed and the truth is that mortgage lenders are perfectly willing to speak with Contractors. Many of the rules applying to permanently employed PAYE workers also apply to Contractors. If you are a contractor looking to get a mortgage in Ireland in 2023, here’s our latest blog that explains the process - And what better way to save for a deposit than when you have a higher pay whilst operating as a contractor!
Myth 3: Contractors Have No Job Security
It is understandable that everyone has financial commitments and values the so-called 'certainty' that permanent employment carries with guaranteed payment every month. But can this certainty last forever, or have we already seen the beginning of the end?
The realization for many is that permanent positions are not as 'guaranteed' as they once were, as we have witnessed throughout the COVID-19 crisis. While being a contractor may have brought questions as to what will happen after my current role, contractors can now be confident in the demand in the market, which is constantly increasing too as we expect to see a sharp and steady rise in demand from both sides of the market.
Myth 4: Contractors Can't Avail of Employee Benefits
When considering this career development path, one of the most common questions we get asked by candidates is how they can plan for their future, particularly how can they organize a comprehensive package in line with a traditional employment package associated with past roles.
When operating as a contractor, it's true that you get paid based on a market rate, which means it's non-inclusive of standard employee benefits such as health insurance, paid holidays, and sick pay. What many people don’t realize is whilst you operate as self-employed, you can now have these benefits in place in a very simple and tax-efficient manner. With higher income, good advice, and forward planning, these measures can be replaced privately. Rockwell Financial, the wealth management partner of Icon Accounting, has been consulting with first-time contractors for over ten years and is available to any client of Icon Accounting for any financial advice. It is entirely complimentary and is part of your service as an Icon Accounting client.
Myth 5: Contractors Are Flying Solo in the Workplace
Some workers may fear that they won't receive the same workplace community as a ‘traditional employee’ does. However, since the pandemic, we have seen a significant transformation in what is known as the new norm, with many employees operating in a capacity that contractors would have been used to doing so in the past. With this adaption and with clients continuing to transform their working environments to meet contractors’ needs so they can ensure retention of talent, we are confident that this concern has ceased to exist in the Irish market and workplace. In addition, here at Icon Accounting, we also recognize the importance of community. That is why building and strengthening our contractor community has always been a priority. We look forward to continuing to organize a range of learning and networking opportunities and events.
In conclusion, don't let these spooky myths scare you away from the world of contracting. The modern workforce is evolving, and contractors are an essential part of it. The benefits, flexibility, and opportunities are there for those who dare to embrace this exciting career path. So, if you've been hesitant about becoming a contractor, it might be time to cast aside those fears and take the plunge into a thriving and fulfilling career. Happy contracting, and happy spooky season!
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