The importance of knowing if you're self-employed or an employee
Your employment status is important as it effects your tax and social security, your entitlement to the minimum wage and what responsibilities you have towards people who work for you.
Work out if you're self-employed or an employee
Use the following statements to work out if you're self-employed or an employee for tax purposes.
If you have more than one job you might be employed in one and self-employed in the other. Use these statements for each job.
If after reading this you are still not sure what category you fall into, contact us for further advice.
You're probably self-employed for tax purposes if:
- you're ultimately responsible for how the business is run, you risk your own capital in the business and you are responsible for bearing losses as well as taking profits
- you control what you do, whether you do it, how you do it and when and where you do it (although many employees do have considerable autonomy)
- you provide the major items of equipment to do your job, not just the small tools which many employees provide for themselves
- you're free to hire or employ other people, on terms of your own choice, to do the work that you have agreed to carry out (however, an employee may also be authorised to delegate work or engage others on behalf of their employer)
- you have to correct unsatisfactory work in your own time and at your own expense
You're probably an employee for tax purposes if:
- you have to do the work that you have agreed to undertake yourself - in other words you can not send a substitute or hire another person to do it
- someone tells you what to do, and when and how to do it
- someone provides you with holiday time off, sick pay or a pension
- you're paid a specific amount an hour, a week or a month
- you can receive overtime pay (although some employees are paid by commission or on a piece-work basis)
- you're expected to work set hours, or a given number of hours a week or month (although some employees have a 'zero hour' contract)
- you work wholly or mainly for one business (although some employees work for more than one employer)
- you're expected to work at the premises of the person you are working for, or at a place or places they decide (however, a self employed person may, by the nature of their job, have to work at the premises of the person who engages them)
I may be an employer
It is your responsibility to correctly determine the employment status of anyone who undertakes work for you. There are different rules depending on whether they are:
- an employee
- a labour only sub-contractor
If after reading these notes you are unsure about an individual case, contact us for advice.
If you are an employer then it is your responsibility to follow any law that applies to you.
Employers' tax information
Registering as an employer for social security contributions
My contract includes my employment status
The reference to 'employed' or 'self-employed' status in a contract does not in itself establish the contractual relationship. We may have to look beyond the words to the reality of the situation.