Finding the Right Fit: Choosing the Contracting Setup That Works for You

Finding the Right Fit: Choosing the Contracting Setup That Works for You

Valentine’s Day is all about finding the right match..and while that usually brings relationships to mind, it’s also a good moment to think about another important partnership in your life: your contracting setup.

Just like any good relationship, the way you structure your contract work should support you, suit your goals, and evolve as your circumstances change. If it doesn’t, it might be time to reassess.

Knowing What You Actually Want

Before choosing (or sticking with) a contracting solution, it’s worth asking yourself a few honest questions. The answers will shape which option makes the most sense for you.

Consider the following:

• How long do I expect to stay contracting?
• What level of income am I earning, and is it likely to increase?
• Do I want flexibility and control with managing my contract funds?
• Am I thinking about pensions, investments, or longer-term plans beyond my current role?
• Will I work with one client or multiple clients?
• Do I need my own company to pursue other business interests, hire employees, or manage business assets?

Taking time to reflect on these factors early can help you avoid choosing a structure that no longer supports your goals a year or two down the line.

The Contracting Options

There’s no single perfect company structure. Each option comes with its own advantages and trade-offs, depending on your circumstances.

Below is an overview of the most common contracting solutions.

PAYE Umbrella Company

A PAYE Umbrella Company is a limited company solution that acts as an intermediary between you and your end client. It offers immediate setup and ensures contractors retain Class A PRSI status, meaning access to benefits such as Illness Benefit.

Under this structure, the umbrella company manages all invoicing, payroll, and tax compliance on your behalf. This allows you to focus fully on your contract work without worrying about administration.

This option is particularly suitable for:

• Short-term contracts
• Contractors who want a simple, hassle-free solution
• Those who wish to retain Class A PRSI status

Director Umbrella Company

The Director Umbrella Company is another limited company structure that acts as an intermediary between you and your client. This ready-made solution allows you to become a company director without the setup time or costs associated with forming your own personal limited company.

Operating as a director enables Class S PRSI contributions and increased tax efficiency, while Icon Accounting manages all administrative and compliance requirements on your behalf.

This solution can be ideal if:

• You’re unsure how long your contract will last
• You incur expenses such as relocation or business equipment
• You want more flexibility than a PAYE umbrella, without committing to your own company

Personal Limited Company

For those considering contracting as a long-term career, setting up a Personal Limited Company offers the greatest level of flexibility and control.

This structure allows you to manage your contract income, plan effectively for the future, and still benefit from a fully managed service and dedicated support from Icon Accounting.

A Personal Limited Company is best suited to contractors who:

• Plan to contract long term
• Work with multiple clients
• Want to maximise self-employment benefits
• Employ others or purchase business assets
• Have significant or varied business expenses

While incorporation and tax registration can take some time initially, many contractors find the long-term advantages make it a worthwhile investment in their future.

Finding a Setup You’re Comfortable With

Choosing the right contracting setup isn’t about ticking boxes — it’s about finding a solution that genuinely supports your goals, your income, and your future plans.

If you’re unsure whether your current structure is still the best fit, or if you’re considering a move into contracting, a conversation can make all the difference. Our team works with contractors at every stage of their journey and can help you understand which option suits your circumstances ( now and in the longer term!)

Talk to Icon Accounting today to review your contracting options!