IT contracting - personal services company vs agency direct

Hubby has left his salaried IT position to contract again. We've got two options for pay - personal services company vs agency direct
PS take a few dollars per hour out of his rate but can provide a letter of salary, tax variation each week against claimable items (IP interest etc), and on going employment statement if he changes contract employer

Agency - no cost to him

We're hoping to purchase in the next six months - given the APRA changes would the PS items still be advantageous ?

 

Hi Mooze my husband had the same dilemma last year - go fully self employed via a recruiter or have them act as his employer with payslips. We went with the payslip option. The lenders we've recently gone with have accepted the payslips along with long term history of employment in the IT industry as if he was a PAYG employee. Much less headache than going down the self employed route or any need to wait for the minimum self employed time periods imposed by the lenders.

 

Tread carefully - if he is paid as a PAYG (i.e. a payslip) then no problems although some lenders like Bankwest will require 6 months employment if you are paid via a recruiter even at 80% LVR. Most lenders will be ok with a PAYG Contractor though.

The other thing to consider is the probationary period if that applies.

However if he is paid to an ABN then lenders are going to treat him like a self employed applicant and thus will require at least 1 year employment and financials.

 

Thanks
The personal services company places him in an already established company - not his own abn- so as he changes who he contracts to his "employer" stays the same

 

@Mooze. I have done contracting for a while, exactly the same as what @beachgurl said. They looked at the history of employment, and I have been in the same career for a while. I have applied for the loan 6 months after getting contracting payments.

My accountant managed to create a company, and I became the director of the company. I went this path, as I was travelling a lot, and lots of expenses had to be claimed.

hope this helps

Thanks
Ramez

 

Very shaky grounds here. If you're planning to purchase in the next 6 months, go direct and get a payslip. This makes finance easy. If you go via a personal services company the odds of a successful finance application are at best marginal within the first year or two.

 

There would be no tax savings with setting up a company for PSI services. Downsides with finance and extra costs.