Employee, worker or self-employed?

About this guide

Below is a brief guide to being an employee, a worker or self-employed. Remember, regardless of employment status, there should always be a contract in place.

Are you an employee?

An employee is a person employed under a contract of employment.

There are two elements to a contract of employment: mutuality of obligation and control which can help determine your employment status.

You are likely to be an employee if:

  • The employer provides you with your work, plus any tools and equipment for it, and the employer decides how and when you do the work
  • You have a written contract. The contract is called a 'contract of service'
  • You are expected to do the work that you are employed to do and may be moved to different tasks
  • You are paid a regular amount according to the hours you work and Tax and National Insurance is deducted from this pay
  • You have to work a set amount of hours. You may get extra pay for overtime and bonuses

Are you a worker?

A worker is not an employee and is said to be engaged under a contract of its own kind.

Workers are defined more widely than employees and are different from the genuinely self-employed. The status of worker includes individuals working under a variety of contracts. Employees are worker, but employees have different employment rights and responsibilities from workers.

Workers are usually:

  • Agency workers ('temps') – the Agency will find the work and pay the wages and the Company who hires the worker will pay the Agency for the work carried out
  • Short-term casual workers – casual workers are not usually part of the permanent workforce but supply their services on an irregular or flexible basis or have a 'minimum guaranteed hours' contract
  • The company deducts tax and National Insurance contributions from wages (PAYE system)
  • The company provides any tools, equipment or materials needed to undertake the work

Are you self-employed?

You are likely to be self-employed if:

  • You determine how and when you do the work within reason
  • You can hire helpers or replacements for yourself if you are unable to do the work
  • You pay your own tax and National Insurance contributions on a self-employed basis (by completing a Self Assessment tax return)
  • You are contracted to provide services to the client/employer over a certain period of time for an agreed fee
  • In effect, you run your own business and take financial responsibility if it is successful or not and provide the main items of equipment
  • You may work on your own premises and you may work for several different employers at one time

If you are self-employed, your contract is called a 'contract for service'