Employment status

Introduction

The way you work - and the way people work for you - have very important legal implications.

In simple terms, there are five categories of employment recognised by the law and the tax system:

• self-employed individual
• worker
• employee
• director
• contractor

The same person could be classed in one way for one area of legislation and another for a different area of legislation. A person could also be classed differently depending on the job they are doing.

There are also essential tax and National Insurance contribution differences that come with different ways of working. As an employer, you must recognise the category to which the people who work for you belong, to ensure you fulfil your legal and tax obligations to them.

This guide provides a general overview of the different employment status categories and what they mean.

Subjects covered in this guide

• Introduction
• Workers and employees
• Am I legally classed as self-employed?
• Employment status of company directors
• IR35 and other special rules