Employee
€45,292.18
package · €50k · PAYE · rank #1
- Take-home
- €39,667.18
- Income tax
- €7,200.00
- USC
- €1,032.82
- Employer PRSI
- €5,625.00
- Timing
- PAYE withholding each payday
Sole trader vs employee
Compare · 2026
Employee vs Sole trader
Employee (PAYE) vs Sole trader / self-employed: cash €39,667.18 vs €39,648.43; package €45,292.18 vs €39,648.43 on €50,000. On €50,000, income tax ties at €7,200.00 (earned income credit = PAYE credit). Cash take-home is €39,667.18 vs €39,648.43 (Class S vs Class A PRSI). Employee (PAYE) leads on package by about €5,643.75 via employer PRSI €5,625.00.
Higher package on €50k
Employee (PAYE) wins on package
€45,292.18 vs €39,648.43, a €5,643.75 difference (employer PRSI gap ≈ €5,625.00).
Side-by-side scoreboard
Sole trader
€39,648.43
package · €50k · ST · rank #2
- Take-home
- €39,648.43
- Income tax
- €7,200.00
- USC
- €1,032.82
- Employer PRSI
- €0.00
- Timing
- Form 11 / preliminary tax (budget)
Key takeaways
- On €50,000, income tax ties at €7,200.00 (earned income credit = PAYE credit). Cash take-home is €39,667.18 vs €39,648.43 (Class S vs Class A PRSI). Employee (PAYE) leads on package by about €5,643.75 via employer PRSI €5,625.00.
- Income tax on both sides is €7,200.00 at €50k — the cash gap is Class S vs Class A PRSI; the package gap is employer PRSI.
- Employee Class A PRSI at 4.2% (modelled). Employer Class A PRSI at 11.25% when weekly earnings exceed €552 — paid on top of salary, not deducted from take-home cash here.
- Class S PRSI at the 2026 blended rate 4.2375% (or €650 minimum when reckonable income ≥ €5,000). Employer PRSI is €0 on this path.
- Income tax, USC, and Class A PRSI are usually withheld from each payday under PAYE — no Form 11 preliminary tax on this employee column.
- Usually settle income tax, USC, and Class S via Revenue Form 11 self-assessment; preliminary tax may apply — budget for October / November cash-flow.
How to read Employee vs Sole trader
Both columns use the same €50,000 figure as sole-trader profit or employment gross for tax year 2026 (single status).
Income tax ties. Cash take-home differs by about €18.75 (Class S vs Class A). Employee (PAYE) leads on total package by about €5,643.75 — driven by employer PRSI ≈ €5,625.00.
PRSI — Class S vs Class A + employer
Self-employed Class S uses a 2026 blended rate of 4.2375% (or €650 minimum). Employees pay Class A at 4.2% in this model.
Employer Class A PRSI at 11.25% (when weekly earnings exceed €552) sits on top of the employee package — not subtracted from cash take-home here.
Payment timing — PAYE vs Form 11 / preliminary tax
Employees: income tax, USC, and Class A PRSI are usually collected through PAYE each payday.
Sole traders: Revenue Form 11 self-assessment; preliminary tax may apply — plan October / November cash-flow even when the annual bill is close to employment.
Contractor caveats
This hub compares tax maths and employer PRSI only. VAT collected/remitted amounts, deductible expenses, company structures, and pension elections are excluded from the headline vignette.
Employment status (employee vs self-employed) is a legal / Revenue question — this vignette does not decide status.
Official rules behind this compare
Income tax (2026)
- Standard rate 20% / higher rate 40% with standard rate bands by status
- Personal tax credit €2,000; PAYE employee credit €2,000; earned income credit €2,000 (capped combined)
- Same band schedule applies to employment income and sole-trader trading profit on this hub
Universal Social Charge
- Banded USC on gross income with exemption threshold
- Self-employed / non-PAYE: 11% above €100,000 in this engine
- PAYE employment keeps 8% with no 11% band
PRSI Class S (self-employed)
- 2026 blended rate 4.2375% (9 months at 4.2% + 3 months at 4.35%)
- €650 minimum when reckonable income ≥ €5,000
- Settled via self-assessment with Form 11
PRSI Class A (employee + employer)
- Employee rate 4.2% in this model
- Employer higher rate 11.25% when weekly earnings > €552
- Employer PRSI is package-only on this hub — not a cash deduction from take-home
VAT registration
- Most services: register from €42,500 turnover
- Goods: register from €85,000 turnover
- This hub flags registration likelihood; it does not model VAT collected or remitted
Self-assessment / preliminary tax
- Form 11 for self-employed income tax, USC, and Class S
- Preliminary tax may apply — budget for Revenue deadlines
- Employee column uses PAYE withholding instead
Profit ladder — package gaps
| Profit / gross | Employee pkg | Sole trader pkg | Gap | VAT |
|---|---|---|---|---|
| €20,000 | €21,081.51 | €18,932.68 | €2,148.83 | — |
| €30,000 | €29,682.18 | €26,295.93 | €3,386.25 | — |
| €40,000 | €38,087.18 | €33,572.18 | €4,515.00 | — |
| €50,000 | €45,292.18 | €39,648.43 | €5,643.75 | Likely |
| €60,000 | €51,697.18 | €44,924.68 | €6,772.50 | Likely |
| €80,000 | €64,009.38 | €54,979.38 | €9,030.00 | Likely |
| €100,000 | €75,819.38 | €64,531.88 | €11,287.50 | Likely |
Myths vs facts
“Sole traders always pay more income tax than employees on the same €50k.”
On this vignette income tax ties at €7,200.00 — the earned income credit matches the PAYE employee credit. The cash gap is Class S vs Class A PRSI (€39,648.43 vs €39,667.18).
“Employer PRSI comes out of my take-home pay.”
On this hub, employer Class A PRSI is modelled on top of gross — it raises total package without reducing the cash take-home column.
“VAT only matters once you hit €100k.”
Revenue VAT registration for most services generally applies from €42,500 (goods €85,000) — not €100k. This vignette flags services likelihood when profit ≥ that threshold (expenses = 0).
“Form 11 timing is the same as PAYE.”
Employees usually have PAYE withholding each payday. Sole traders may owe preliminary tax and a balancing payment after Form 11 — different cash-flow timing even when the annual tax maths are close.
“Company structures and expenses don’t matter.”
They can change the commercial result a lot. This hub excludes companies, trusts, deductible expenses, and pension elections so the equal-profit PRSI comparison stays readable.
Exclusions
- Deductible business expenses on the headline equal-profit vignette
- VAT amounts collected and remitted (registration likelihood only)
- Company, trust, and partnership structures
- Occupational pension / AVC elections beyond the optional calculator field
- Employment status determinations (employee vs self-employed)
- Married / lone-parent band comparisons on the headline (single vignette)
FAQ
Employee (PAYE) by about €5,643.75 (€45,292.18 vs €39,648.43). Cash take-home differs slightly.
No — income tax ties at €7,200.00 because the earned income credit matches the PAYE employee credit on this vignette.
Slightly — about €18.75 apart (Class S vs Class A PRSI), with the employee usually ahead on this equal-profit vignette.
Employers pay Class A PRSI on eligible employees (modelled at 11.25% when weekly earnings exceed €552). Sole traders have €0 employer PRSI on trading profit.
VAT registration is generally required when turnover of most services reaches €42,500 (goods €85,000) — Revenue. Employees usually face PAYE withholding each payday; sole traders file Form 11 and may owe preliminary tax.
Related
Switch paths
Compare sole trader vs employee
Same €50,000 profit/gross — employer PRSI + Form 11 timing timing.
Validation notes
- €50k income tax ties: €7,200.00.
- €50k USC matches: €1,032.82.
- €50k Class S PRSI €2,118.75; Class A €2,100.00.
- €50k cash take-home: employee €39,667.18; sole trader €39,648.43.
- €50k employer PRSI: employee €5,625.00; sole trader €0.
- €50k package: employee €45,292.18; sole trader €39,648.43.
- VAT flag false below €42,500; true from that services threshold on expenses=0.
- Same Ireland tax engine as the live calculator (single, Class S / Class A).
By Sammy S. · Founder · AuthorUpdated for 2026