Ltd vs umbrella
Limited company vs umbrella: take-home compared
Your assumptions — 220 days · €5,000 expenses · 5% pension · Medium risk
Ltd vs umbrella
How much does the structure change your take-home?
| Limited company | Umbrella | |
|---|---|---|
| Gross billing | €171,600 | €171,600 |
| Structure costs | − €1,800 accountancy | − €1,300 margin |
| Employer PRSI from your rate | — | − €17,479 |
| Expenses and pension relief | − €13,240 before tax | Not modelled |
| Income tax, USC, PRSI | − €64,482 | − €62,524 |
| Net pay a year | €92,078 | €90,297 |
On these assumptions a limited company leaves about €1,781 a year more — and the Ltd figure has also put €8,240 into your pension.
- Control over salary, pension and timing
- Company pension contributions
- Business expenses deducted before tax
- A business you can build on
- Simple — no company, accounts or returns to run
- Less administration and no accountant needed
- Employment status and a PAYE record
- Quick to start between contracts
Assumptions
Limited company: a proprietary director drawing all profit as salary — PAYE income tax with the earned income credit (directors cannot claim the employee credit), Class S PRSI at 4.3875%, no USC surcharge; expenses and pension deducted first. Corporation tax, dividends and retained profit are not modelled. Umbrella: after the provider’s margin, the rate funds both your salary and employer PRSI at 11.4375%; Class A PAYE applies. Your actual result depends on your circumstances and provider. 2027 rates.
Beyond the number
- Administration. A company needs annual accounts, a CT1, payroll for your salary and a registered office. An umbrella handles payroll for you.
- Pension. Company contributions to a director’s pension are a significant lever; confirm the limits with your adviser.
- Client requirements. Some clients and agencies only engage through one route. Ask before you set up.
- Employment status. How the engagement works in practice decides its tax treatment, not the structure you choose. Revenue publishes guidance on employment status.
Questions
Is a limited company or umbrella better for Irish contractors?
Neither is right for everyone. A limited company usually leaves more at higher rates and gives more control over pension and expenses, but brings accounts, returns and an accountant’s fee. An umbrella is simpler and gives you an employment record, but the employer PRSI and the provider margin come out of your rate.
Why does an umbrella cost more?
The umbrella company is your employer, so the rate has to fund employer PRSI (11.4375% across 2027, the full-year blend, on salary above the weekly threshold) as well as its own margin before your salary is paid.
What does the limited company figure assume?
A proprietary director drawing all profit as salary through PAYE, with business expenses and pension contributions deducted first and an accountancy fee. Dividends, corporation tax on retained profit and the close-company surcharge are not modelled — your accountant can tell you whether a different salary and dividend split suits you.