Calculation basis, sources and review
PAYE and umbrella use the existing 2026 PAYE model; umbrella gross salary is (budget − fee − other employer costs) ÷ (1 + employer PRSI). Sole trader uses the existing 2026 sole-trader model on turnover less allowable costs.
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- Count.ie, operated by K Imports
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- — explanatory content and transparency information, not a new rules verification.
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Any dated method notes below apply only to their stated scope. A formula or user-entered rate is not evidence that statutory rules are current.
Uses the cited Revenue guidance for the stated method and scope. This is not Revenue approval or endorsement.
Source references
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Is a contractor, umbrella or PAYE job worth more after Irish tax?
Compare 2026 take-home pay as a PAYE employee, a sole-trader contractor or a PAYE umbrella worker. The three routes start from different numbers: a salary offer, an assignment budget and invoiced turnover. Umbrella pay is what remains after the fee and employer costs come out of the budget, so the gross salary is lower than the headline rate. The comparison is cash only; employment rights, pension, sick pay and status are not equivalent, and VAT, accountancy fees and losses are excluded.
How the calculation works
PAYE vs contractor vs umbrella applies one fixed set of rules to the inputs described below, so the same entries always give the same answer. The exact formula is published once, in the Sources, formula and methodology section further down this page.
PAYE job: annual gross salary offered (€) is entered as 70,000 in the illustration. Keep the unit shown on the field when substituting your own measurement or amount. Employer PRSI rate (%): Your assumption, not a verified universal 2026 rate; confirm the rate and any exemption with payroll. Other fixed employer costs per year (€): Employer pension, insurance or levies. Also deducted from the umbrella budget. Umbrella: annual assignment budget paid to the umbrella (€): What the client pays in total, excluding VAT. Fee and employer costs are deducted before gross salary.
Worked example
A fixed illustration uses PAYE job: annual gross salary offered (€): 70,000; Employer PRSI rate (%): 11.25; Other fixed employer costs per year (€): 0; Umbrella: annual assignment budget paid to the umbrella (€): 95,000. Paye Net Annual: €50,200.93; Umbrella Net Annual: €57,040.14; Sole Trader Net Annual: €59,278.01. All remaining illustrated settings are listed in the example-input disclosure below. These are reproducible sample figures, not saved visitor inputs; this text does not change when you edit the interactive form.
Compare paye net annual, umbrella net annual, sole trader net annual using matching periods and units. A total cost, a recurring payment and a percentage answer different questions. Check omitted costs and the timing of payments before using the result as a spending commitment.
What moves the answer
Each comparison changes one input of the fixed example and re-runs this calculator’s engine. Other assumptions stay unchanged.
- Raising paye job: annual gross salary offered (€) from 70,000 to 77,000, with everything else unchanged, paye net annual moves from €50,200.93 to €53,546.51.
- Raising employer prsi rate (%) from 11.25 to 12.375, with everything else unchanged, umbrella net annual moves from €57,040.14 to €56,636.99.
Frequently asked questions
What happens if I increase paye job: annual gross salary offered (€) in this example?
Changing paye job: annual gross salary offered (€) from 70,000 to 77,000, with the other example settings unchanged, changes paye net annual from €50,200.93 to €53,546.51. This isolates one input using the form's actual calculation. Compare changes separately rather than attributing a difference to several assumptions at once.
What assumptions should I check for PAYE vs contractor vs umbrella?
Employer PRSI is your own assumption (default 11.25%, unverified). Cash comparison only for a single person aged 18–64 with standard credits. Salary and invoiced turnover are separate contracts. Employment rights, pension, sick pay, redundancy and employment-status checks are not equivalent. VAT, accountancy fees, capital allowances, losses and umbrella expense schemes are excluded. The linked sources support the documented method, not every possible circumstance. Confirm transaction dates and eligibility where relevant, and distinguish a statutory rate from a rate you enter yourself.
Quick answer
The PAYE vs contractor vs umbrella model returns paye net annual, umbrella net annual and sole trader net annual. The three routes start from different numbers: a salary offer, an assignment budget and invoiced turnover.
Outputs and units: Paye Net Annual (euro (€)); Umbrella Net Annual (euro (€)); Sole Trader Net Annual (euro (€)).
Fixed worked example results
PAYE vs contractor vs umbrella example — PAYE job: annual gross salary offered (€): 70,000; Employer PRSI rate (%): 11.25; Other fixed employer costs per year (€): 0; Umbrella: annual assignment budget paid to the umbrella (€): 95,000. Paye Net Annual: €50,200.93; Umbrella Net Annual: €57,040.14; Sole Trader Net Annual: €59,278.01.
Illustration only, not your entered figures. Use the complete example inputs below, selected options and stated limitations when quoting these results.
| Result | Example value |
|---|---|
| Paye Net Annual | €50,200.93 |
| Umbrella Net Annual | €57,040.14 |
| Sole Trader Net Annual | €59,278.01 |
Exact inputs used in the worked example
- PAYE job: annual gross salary offered (€)
- 70,000
- Employer PRSI rate (%)
- 11.25
- Other fixed employer costs per year (€)
- 0
- Umbrella: annual assignment budget paid to the umbrella (€)
- 95,000
- Umbrella annual fee (€)
- 1,200
- Sole trader: annual invoiced turnover excluding VAT (€)
- 95,000
- Sole trader: annual allowable business costs (€)
- 6,000
- Age reached in 2026
- 35
Cite this calculation example
Count.ie. PAYE vs contractor vs umbrella: fixed worked example. Page updated 2026-10-16. https://count.ie/finance/paye-vs-contractor-umbrella-comparison/#worked-example
This citation describes the fixed example above, not your entered figures. Include the complete assumptions and relevant year when quoting a result. Official sources remain the authority on the underlying rules.
Link to the worked exampleFixed example, assumptions and sources (JSON)AI discovery index
Sources, formula and methodology
| Step | Formula or calculation | When it applies |
|---|---|---|
| Published calculation method | PAYE and umbrella use the existing 2026 PAYE model; umbrella gross salary is (budget − fee − other employer costs) ÷ (1 + employer PRSI). Sole trader uses the existing 2026 sole-trader model on turnover less allowable costs. | Use the stated input units, supported modes and limitations below. |
Assumptions and limits
Employer PRSI is your own assumption (default 11.25%, unverified). Cash comparison only for a single person aged 18–64 with standard credits. Salary and invoiced turnover are separate contracts. Employment rights, pension, sick pay, redundancy and employment-status checks are not equivalent. VAT, accountancy fees, capital allowances, losses and umbrella expense schemes are excluded.
Explanation of the implemented calculator, not independent professional review, enactment verification or a promise of AI citation. See the source links and review scope above.