need suggestion about eezy service !!!

[cors187]

I can only guess that as eezy is the legal service provider, that they are charged 23% VAT for providing service and regardless of your status within eezy, your account is counter charged for that 23% VAT.Would you post up the 4 pages?

[Upphew]

The thing got so confusing that if I am working for eezy as salaried employee for fixed term, and they charge my client the bill of my service, why VAT would be deducted from my service ? I might be missing something, it'd be clear if someone who have used eezy service could say their experience and detailed deduction % (not personal tax, I mean).

Eezy bills the client. All bills have VAT. Or when was the last time you saw one that didn't have one?

[tony webb]

I recently looked at eezy service.

I would guess that in theory eezy could easily get into trouble with the authorities. In it's simplest form any one from anywhere in the world that wants to live in Finland could register with them, They would have a contract to say that they are an employee and in return be allowed to live in Finland!

The other issue is that as an employee they should be paying the employer part of your insurance and pension. They're not allowed to deduct it from your wages. If they're not paying their contribution you could end up in trouble. They certainly will.

In fairness to eezy they do tell you that they charge VAT and you can decide how much you want to charge your employee. There wouldn't have been anything wrong with charging 25€ an hour to account for the V.A.T. and your other expenses.

You could always phone

[Upphew]

My rough estimation is from 4000 I'd get 1400 in my bank account. I don't have complaints about income tax or service charge, but VAT for wage earner without selling goods is something strange. The strange thing was "Elakemaksu" was deducted twice, once at 18.15% another at 5.15%. My rough estimation is BOTH the employer tax/expenses and employee expenses are deducted from my share. Sounds crazy service !!! There is option to calculate the amount without or less VAT too but I guess that's not in my case.

Most funny thing is, if I put 4000 as my net salary, the clients bill would be around 9500, more than double
I wonder if anyone use this service....

If I understand the concept properly, they act as my employer, I pay my taxes and other expenses like PF, UF... I also pay for the expenses of their company like accident fund, insurance, etc. Which as a corporate they have to provide to their employee. PLUS, I also have to pay for their 9% service fee, and the main thing called VAT which as a corporate they have to pay to government for selling/billing customers. So, here they make me pay for all services and get the benefit/rating of nice tax payers by just billing the client and processing the payment. Lovely business concept (I must admit), but sounds like HELL NO to me.

You can always set up your own company and you would end up paying the same (minus the 9% that eezy takes). On the plus side you could then do VAT deductions, but unless you are buying something that point is moot.
Or you can work for company and the company will pay some of those "behind the curtains" and show only some on the payslip.

[Rosamunda]

I can't see anything technically wrong with those calculations. And I don't think Eezy is doing anything illegal (good point made about filtering out illegal residents and money launderers though). As Upphew says, if you were self-employed the calculations would not be very different except that you would have to pay YEL instead of TyEL. You would however be able to manage your VAT and deduct any input VAT that you may have (eg if you buy any supplies or equipment such as a computer etc)

It might be cheaper in the long run to set yourself up as an Oy or a TMI and employ a bookkeeper to do your accounting.

As for VAT... If you had a toiminimi you would have to charge VAT on all the services you sell (unless your customer is outside Finland). No getting away from it (unless you have a very very small turnover). Now... what I don't understand is why the hell the guys you are developing this SW for won't register their company??? That is weird because, if they are not registered for VAT, they cannot deduct the VAT that you (or Eezy) is going to bill them. Which is odd. Before I did any business with people like that I would want to know why they are not registered (doesn't make sense). It takes 30 secs to register a company. How can you be sure they are going to pay you? If they were a registered company, then the VAT wouldn't be an issue because it would be transparent for them. (Eezy bills them the VAT and they just deduct it from their sales VAT). As Eezy explains (quite well) in their pdf, you have to factor in the VAT in your billable amount because their machine automatically charges it on their invoices.

[rinso]

It is a weird story.
That companies prefer to pay for services (+VAT) instead of salaries (+ social benefits) I can understand.
But start up money without being registered and pushing you towards EEZY makes me wonder.
Free hand outs often come with a lot of restrictions. If you see a funny construction, you have to ask yourself "why".

[CH]

Apparently Protomo is a business incubator... so I would guess that is the reason it needs to be a new company, not an already established one.

But... what I don't get is that they want to start a business out of your code, and you will be a salaried employee? Was the idea for the program theirs or yours? If more or less everything is based on your work, as it sounds from your description, why aren't you a partner?

[rinso]

but what I was said is they will get some startup budget from Protomo (some startup fund raiser I guess) from which they can pay me.

I checked the Protomo web site (you should have done that yourself) and I get the impression they supply training and coaching to young entrepreneurs in exchange they hand over some rights of the innovations. Nowhere start up money was mentioned.
To me it sounds like you could be in for a long wait before you get your money.

[Upphew]

You can always set up your own company and you would end up paying the same (minus the 9% that eezy takes).

What ? do we have to pay both employer and employee tax, insurance, unemployment fund, etc, etc. when we are self employed ???

When you are the company, you pay the fees that company pays... taxman will get his share. Of course when you are the only one in company, you can skimp with some unemployment and pension stuff... but then you won't get much, if anything*, if you get unemployed or pensioned...

Some entrepreneurs prefer to milk all they can from the company and invest that money as they expect to get better results than pension insurance companies.

*being entrepreneur and unemployed same time is quite hard, so the unemployment payments won't help the payer much, afaik.

I checked the Protomo web site (you should have done that yourself) and I get the impression they supply training and coaching to young entrepreneurs in exchange they hand over some rights of the innovations. Nowhere start up money was mentioned.
To me it sounds like you could be in for a long wait before you get your money.

Indeed. I'd say that Protomo is more like eezy for companies than angel investor. The 9% is paid by some rights and society as they seem to be Funded by towns and ely-centers.

On the other hand they might be able to do some fancy .ppts and budgets that enable the new company to get grants, investors and loans, so they aren't necessarily the ones sitting on the money coffer.

[Rosamunda]

You can always set up your own company and you would end up paying the same (minus the 9% that eezy takes).

What ? do we have to pay both employer and employee tax, insurance, unemployment fund, etc, etc. when we are self employed ???

Read this book: http://www.masuuni.info/articles/521/

It tells you exactly what the costs of being self-employed are. Yes you do have to pay pension insurance (YEL) and you are suppose to pay according to your job/position (a kind of "Arm's Length" rule) and (in theory) the Pensions Centre will force you to pay more if you under contribute but I'm not sure that happens in practice. Unemployment is mostly voluntary but unemployment funds do exist for self-employed entrepreneurs and sole traders.

One difference between being an employee of Eezy and being self-employed is your income tax. IIRC, you fed a 35% tax card into the Eezy machine. If you were self-employed, your personal tax liability would vary depending on whether you pay yourself a salary or a dividend. But with a decent bookkeeper to help you, I think you should be able to get it below 35%.

[Upphew]

I'd prefer to wait few more months for money rather than pay double pension, insurance, VAT, etc. Here the thing is, I'm not in loss, its not my business idea and I learnt something new while coding this project, plus I haven't given them codes, and they cannot run the business without this software. So, my money is safe, but just a matter of time when will it arrive as I am still holding on to be paid as employee rather than eezy.

You will pay single pension, the company that pays you will pay the second single, so in the end it will be double too. Same with insurance. VAT will be gone though.

[Rosamunda]

One difference between being an employee of Eezy and being self-employed is your income tax. IIRC, you fed a 35% tax card into the Eezy machine. If you were self-employed, your personal tax liability would vary depending on whether you pay yourself a salary or a dividend. But with a decent bookkeeper to help you, I think you should be able to get it below 35%.

thanks for the link, it'd be helpful someday when I have my own business idea, but at the moment I am salaried worker for one company and I was working for this project for some side income.

A lot of people who have salaried jobs (including Yours Truly) also run their their own businesses on the side (either TMI or Oy). If you have a salaried job then it makes even more sense to set up your own company (and you could keep YEL to a minimum since you are already contributing to a pension fund in your day job).

I see absolutely no reason why this company would pay you a salary even after they have registered their business. It's just too much hassle for them. They would almost certainly prefer an invoice from you (or Eezy) so I don't think they will change their tune even if you wait.

But I think you are missing the point that it shouldn't make any difference whether you use Eezy or not. Your net in the pocket should be the same. The customer should be paying all the overheads and the VAT etc, not you. So just increase your hourly fee to include all that stuff. Of course it might seem to you like it's a huge amount to bill, but it's probably no more than it would cost the company to pay you a salary.

[cors187]

Roger i guess your service is a niche specialist service with little competition.that would make it easier to put up the price to cover the extra costs

[Upphew]

I'll try to work this way, hopefully it won't be an issue from client side.

Clients prefer no hassle. Get bill - pay it, seems to be the definition of no hassle. Hire someone and you have to wonder working contracts, payslips, taxes, pensions, unemployments, holidays, healthcare, notice periods...

[Tiwaz]

But I think you are missing the point that it shouldn't make any difference whether you use Eezy or not. Your net in the pocket should be the same. The customer should be paying all the overheads and the VAT etc, not you. So just increase your hourly fee to include all that stuff. Of course it might seem to you like it's a huge amount to bill, but it's probably no more than it would cost the company to pay you a salary.

thank you for the insight... calculating my pay without VAT and imposing VAT in customer bill sounds better option. By the way, I asked eezy to provide me sample calculations, and they did calculations in such a way, that I'll be receiving 4000 euros and my portion of expenses like IT, PF, UF, will be duducted from 4000, and other employer expenses and VAT would be added to the customer bill. So, not a bad deal for me, and the customer's bill amount was 6900. Lets see, I'll try to work this way, hopefully it won't be an issue from client side.

Ask yourself. If your company was running on starter money... Would you be prepared to shovel up 7k to yourself every month?