Ryanair irish vs Spain taxation

[737 CL]

Hi guys,
I've Been offered a job as DEC in Ryanair. I'd like to know if somebody can help me. Flying 80 hours a month. How much is the income you receive at home taxing in Spain vs Ireland? If I tax in Ireland , Could I use the Social security in Spain?

Regards

[Hobo]

Based where?

Lots of info already on the other FR threads in this forum.

[737 CL]

Hi Hobo,
Based in Spain , I read a lot about but nobody answer the question. Some people says 55% retention other 80% .

[Hobo]

It might depend on exactly which contract they are on. Drive to the base in Spain you will be based at and ask a FR CAPT (preferably DEC) what his rate is.

Presumably you know what your houly rate will be having been offered a job, so income rates for Spain and Ireland are freely available online.

[Nightstop]

24.75% tax if you qualify for the "Beckham" tax deal, but only if your contract is with a Spanish entity...unlikely in your case :=

[skyloone]

Spoke to a Spanish island Captain

99 hours = €4300 Net in his pocket. Not sure about any pension contribution.
Pretty grim if having to keep two houses going. FO's earning more than captains at the mo.

[Skyjob]

Depends if offered a Ryanair contract or Brookfield contractor one...

[Shooting_Star]

Depends on the contract, latest Ryanair contracts give around 4000-5000€ in the pocket in Spain, although that varies also on the base. Some FO's on Brookfield contracts do indeed earn more than the captains :{

[VaniosLenos]

Being offered a contract with Storm, at the base of my first choice. They told me that I would have to set up my self in a company in Ireland, for taxation etc. For a month of 10000 Euros gross earning, you end up about 4800 net. Add on to that your business expenses and you can increase that, depending on how much you can claim, but its not a lot and are not repetitive (headsets, uniform, subscriptions, internet, etc). If out of base flying then you can claim basically everything but at the end of the day is your money that you get back and not something extra. So basically one can expect about 5000 Euros net per month for 900 hours of flying. So if in winter you don't fly as much and your yearly average is 800 hours then your salary will be reduced accordingly.
Obviously is not a lot, and probably they are better jobs out there. It all depends on one's choices, circumstances, etc.

[mach85]

Flew with a Spanish f/o the other day who told me the 'Beckham tax' has now been scrapped.
Could be wrong so dont shoot the messenger

[captplaystation]

Don't think "scrapped", but I heard the criteria to benefit from it had been tightened considerably.

[Skyjob]

The structure was very well known but the loopholes are closing to benefit from it.
As a result I wonder if it will become time for such structures to be replaced by other or more financially rewarding ones, in line with industry changes.

[737 CL]

Really It's impossible to believe how a FO could Earn more than a Captain. Could somebody explain the differences between the contracts? Who is providing the best contract?

[speed_alive_rotate]

Sorry if its a stupid question guys, what is "Beckham Tax"? Also usually which contract is better: storm or Brookfield ??Or is it more base dependant.

[Nightstop]

The so called "Beckham Tax" was introduced into Spanish tax law in order to attract the footballer David Beckham to play for Real Madrid years ago. But it couldn't be introduced for just him, so many others have benefited. In order to qualify you had to (amongst other things) have not worked in Spain before, be employed by a Spanish company, apply within 6 months of starting work in Spain etc. The tax rate used to be 24% flat rate with no other tax allowances (for kids, mortgage relief etc.). The tax rate is now 24.75% as far as I know. It lasts for 5 years, after which it's normal taxation from then on, unless you've left employment with a Spanish company before then of course.

[speed_alive_rotate]

Thanks so much for explaining that Nightstop, I hadn't heard of that before. I would love to work in Spain so great Info.

[737 CL]

I understand that the gross salary as a captain is higher but I read in a lot of posts as a Fo you earn more finally in your pocket. I think that is for taxation ... I would like to know what is the best contract as captain? . BK, storm or FR?

[Skyjob]

When you are an FO you are probably still writing off your training expenses, thus taking more untaxed into the pocket.
As a captain that expense has been removed/paid off and as such cannot be used each month as a tax deductible item.

Both cases are only applicable when you are on a Brookfield contract/construction with Irish company to be set up, not as a Ryanair contract as you are then an employee with basic salary and so on, taxes paid by company and no expense posts.

[despegue]

Can Brookfield/storm not just deposit the salary you earned on a bank account of your choice?

[172_driver]

The way it works is your Irish Ltd. company, run by a Ryanair approved accountant, will invoice Brookfield or Storm, as applicable. Your Irish Ltd. company pay out your salary which will be deposited into your personal bank account.

The difference to other companies using contractors, e.g. Norwegian, (and please correct me if I am wrong) is that you are hired directly by the Agency providing pilot services. Hence you've got a proper contract, taxes and social security matters sorted (even though tax rates can differ depending on where you are based).

I believe I am speaking for the majority of Ryanair contractors that the biggest issue is the complexity of tax/social insurance affairs and staying within the law. The social contributions are a significant cost to any company that Ryanair has (cleverly) managed to dump on the pilots.

737 CL, you asked which contract is best. I think it's highly subjective. FR contract gives high security, basic salary, taxes paid by company, (slight) pension pot, other allowances. BRK pays best hourly rate, but no guaranteed hours. Tax and social contributions can be quite high depending on your circumstances and you may see more or less take home pay than FR contract. Storm has same structure as BRK. Pays slightly less but has min. 30 hours guaranteed per month.

To mud the waters further, no FR contract is the other alike. They're tailored after living expenses in the country you are based. Also keep an eye on your sector pay if it's referred to as net or gross.

[737 CL]

Thank you very much for your answer 172 Piot. I understand the difference, So comparing Nas with FR You are able to tax in Ireland and you Could be based wherever Fr Wants with less taxes but If you tax in Ireland Are you able yo use the SS of Spain for example?.

[SpGo]

As you will be based in Spain, both you and the company which employs you (your own Irish setup) will have to pay social security in Spain. On top of that you will have to pay income tax in Ireland, according to the Irish-Spanish double taxation agreement.

[172_driver]

Yes, income tax will be paid in Ireland regardless. There are bilateral tax agreements in place with most European countries. They could all be different, but my feeling is that they're all similar. They're available on internet, but difficult to understand. The common advice is to seek assistance from a fiscal advisor. The majority I know of stay under the radar where they're based and only pay in Ireland. It's all very muddy.

Other local taxes, property taxes, council taxes you may have to pay if you own a property somewhere.

The social security is a different game. There are EU legislations available on internet, but again hard to read/understand. What they say is you should pay SS in the country where you are based, even if you don't live there or have any other connection to that state. The rates vary, they can be quite high like Belgium 48 %, Spain 37 %, Sweden 32 % (of your gross salary, not the invoiced amount… slight difference, but still high).

It's the high SS rates together with income tax in Ireland which brings down the retention rate, sometimes to well under 50 %.

I wouldn't expect to receive any benefits from a country where you are not socially insured. Perhaps if you're Spanish, always worked in Spain, registered in Spain, you'd be able to claim benefits for a while.. I remained in the system for 2 years after leaving my home country.

[737 CL]

I Understand The High retention rate is because you pay in 2 places. According What I read here Comparing with Nas You earn less money in FR But From What I´ve seen gross salary is almost the same. This due to the taxation or Do you have ítems free of Taxes in Nas?

[SpGo]

I Understand The High retention rate is because you pay in 2 placesYou do not pay in two places and I think you still didn't understand it.
There is no choice, it is covered by European laws and taxation agreements.

Your are based in Spain: you will have to pay employees social security in Spain. The company which pays you a salary will have to pay employers social security in Spain even if it is an Irish company. You are covered by the Spanish social security system.
You, a resident of Spain, receive a salary from an Irish company and will have to look at the double taxation agreement between Spain and Ireland to find out where you have to pay income tax. In your case its Ireland.

[jeehaa]

Don't forget that in the case of a Storm McGinley contract (BRK contracts not given anymore), the company will NOT pay the employers part of the social security and the contracter has to pay both employers and employee fee (in Spain in this case which sums up to 37,25% of gross income for 2014). The contracter pays income tax in Ireland initially (21%-41%), but can opt each year to declare tax afterwards ofcourse) to pay income tax in Spain en get a tax refund from Ireland (after proof of tax declaration in Spain has been confirmed by Ireland)

[737 CL]

Thank you very much for patience I got everything !!!!!

[RAT 5]

It seems quite an financial incentive for people to test the case IF they are self-employed contractors or actually employees of one of the entities. Imagine being based for a couple of years in one EU country, then shifted to another; then after command to another, and later on even another, none of which might be your true country of residence. Then, at retirement, trying to receive all these little tiny pots of state pensions from different states. What a nightmare and waste of paid money.

[speed_alive_rotate]

Hey Jeehaa, has Brookfield contracts been stopped?? Thought they were still business as usual?? Thanks

[jeehaa]

Still in business, but not for new-comers, ie cadets (all Storm McGinley) or DEC (same). Existing contract are renewed in most cases, upgrades RYR contract for the time being only (therefor paycut for most former BRK FO's if doing the upgrade, hence loads of the upgrade-candidates are looking for other opportunities)

[speed_alive_rotate]

Do you know if they have any other contracts, or obviously when their current contracts run out they will be finished. I wonder are they affiliated with any other airline contracts. I have checked their website, but you know yourself they will put any airline they have ever dealt with even once up just to boost their profile. Do you think it is the start of Ryanair starting their own employment process??Thanks for your reply.