Employing Workers

Published 23 August 10


The definition of a worker's employment status can have important implications for the business for which they work.

Important tax and National Insurance contribution differences exist that apply to different ways of working. Employers must recognise the category to which the people who work for them belong, to ensure their legal and tax obligations are fulfilled. Furthermore, employers have more comprehensive obligations towards employees, such as providing training or Health and Safety equipment.

The definition of an employed individual, as opposed to self-employed, is determined by several factors which include:

  • Being paid a regular salary or wage.
  • Entitlement to sick or holiday pay.
  • Whether the worker works for a single business (or has a number of 'customers').
  • Whether they work using their employer's premises, tools or facilities or their own.
  • The limited range of control the worker has over their work.
  • Being unable to subcontract the work elsewhere.

A more definitive explanation of the differences between employed workers and self-employed workers can be found here.

For help in defining whether your workers are employed or self-employed, see Business Link.