Budgeting for Holidays when you’re Self-Employed

Budgeting for Holidays when you’re Self-Employed

As a contractor, you’re the business of you and you should take care of your business by making sure you have time to rest and recharge. Make sure you’re taking care of yourself by budgeting for time off.

Contracting is a great way to work offering a varied, flexible, and well-rewarded work life. Contractors in Ireland earn on average almost twice the salary of an Irish employee, this premium salary recognises not only the special skill sets and experience of contractors but also compensates them for annual leave and bank holidays, which they generally do not receive payment for. It is vital when you start contracting to remember you will more than likely not receive holiday pay and you will need to build a holiday fund for yourself, so you can afford to take time off without being under financial pressure.

Here are 6 easy tips to make sure you’re able to take time off without worrying about the financial impact on your earnings.


1. Decide your relaxation requirements

The average Irish employee is entitled to a minimum of 20 days’ paid leave and an additional 10 days’ bank holidays. Aspire to a minimum of this total amount of 30 days’ rest per year. Remember these days will have to cover you for major breaks such as St. Patrick’s Day, Easter and Christmas/New Year when your client may not be operating and it may not be possible to work due to client operational hiatus.

2. Decide how to fund your well-deserved rest.

What is the ideal split when you get paid? Decide on a percentage of your income to save using your daily rate. Once you know how much time off you want, you can calculate how much you’ll need to save per day to cover your lost income. Our daily rate calculator will help you to establish your daily pay rate. Existing contractors can view that information in their Contracting PLUS portal.
One easy rule of thumb would be to saving 2.5 days’ pay each month to get you an ample fund to cover 30 annual days off.

Contracting PLUS recommends its contractors save 8% of their total invoice value to allocate to a holiday fund as a general guideline. Our Dedicated Account Managers are always happy to discuss this further over the phone.

3. Set up a separate fund for your holidays.

Make sure your holiday savings are separated from your monthly earnings. Don’t be tempted to leave your holiday fund in your current account!
Set up automatic transfers from your current account into a separate savings account dedicated to holiday funds. This way, you’ll barely notice the money leaving your account and will be pleasantly surprised by how quickly it adds up.

4. Be strategic about your travel.

If you have to travel for work, or for work-related activities such as conferences or training, plan well in advance. Work-related travel as travel expenses may be tax-deductible for the proportion that relate directly to your contract or job. You may be able to capitalise on this travel by adding some privately funded vacation to your itinerary. Speak to your account manager to discuss work-related travel expenses.

5. Take your work with you.

If you only need your laptop to keep working, and you’re holiday plans involve traveling within the Republic of Ireland, why not take it with you? A freelance web designer can do the same work from their home office, or at a cafe on the Wild Atlantic Way.

6. Use Rewards Programs and Cash Back Credit Cards.

If you’re not taking advantage of rewards programs and cash-back credit cards, you’re missing out on potential savings. Sign up for loyalty programs with your favourite airlines or hotels and earn points towards free flights or hotel stays. Additionally, consider using a credit card that offers cash back on purchases like petrol or groceries – these small amounts can add up over time.

It’s also prudent to remember that the same saving rules apply to retirement and sick days. Self-employed professionals should aim to save at least 15% of their income for retirement and budget accordingly for holidays.

All of Contracting PLUS’s clients have a dedicated account manager who can help to understand how best to plan for all of these events.


Call us today to find out how we can help!

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