Is Your New Team Member an Employee or Self Employed?

In practical terms what is the difference?

  1. You both pay less tax if they are self employed.
  2. Employees have employment rights the self employed don’t.

These two factors can be big.

Whether you are self employed or not depends on the facts not on how you label them.  You may be liable for unexpected tax and penalties if you get it wrong so care needs to be taken.  The rules are set by The Revenue but in essence if you answer yes to most of these questions they are probably an employee:

  • Do they have to do the work themselves?
  • Do they have to work to hours you set?
  • Do they work a set amount of hours?
  • Are they paid by the hour, the week or the month?
  • Do they get overtime or a bonus?

But if they answer yes to most of these questions they are likely to be self employed:

  • Can they hire someone else to do the work, or to help them?
  • Do they take commercial risk?
  • Do they use their own equipment?
  • Do they do the work to a fixed price and take the risk if it takes longer (or less time)?
  • Can they decide how to do the job?
  • Do they do work for different people?
  • Do they have to correct work in their own time at their expense?

If you are still unsure please get in touch and we can discuss the exact nature of your circumstances.