Employed or self-employed?

Contents

Introduction

Employed pointers

Self-employed pointers.

Special rules.

Several jobs and part time working.

How do I pay contributions?

Still not sure?

For further information.

Introduction

Your employment classification affects the amount of contribution you have to pay, so it is important you know which heading your job falls under. The law doesn't define 'employment' and 'self-employment'. You or your employer can't simply call your job 'employment' or 'self-employment'. The questions on pages 3 and 4 should help you to decide your employment classification, although they are only a brief guide and don't cover every situation. It is not possible to list all the factors which may be relevant or provide a precise guide to their relative importance. For each engagement the whole picture needs to be looked at in the light of all the facts. If you are unsure, or you have any questions, ask at our office.

Employed or self-employed

In most cases it will be obvious whether you are employed or self-employed. For example, if you work for a company as an office clerk, you are almost certainly employed. It may be clear that you are an employee because you have been given a written statement of your employment terms, or you may be a member of a pension scheme open only to employees. You are self-employed if you are in business on your own, for example if you run your own shop, or are buying and selling goods, or providing services direct to the public from your own premises. However, sometimes it isn't so easy to decide. You'll need to look at your job as a whole, taking into account all the conditions you work under in the light of the guidelines below. However, you should remember that your position under social security legislation will not necessarily be the same as under the income tax law. Bear in mind that because you are self-employed in one job doesn't necessarily mean you will be in your next job.

Employed pointers

If you can answer 'Yes' to the following questions, you are probably employed.

• Do you have to do the work yourself for the whole or substantial part of your time at work?

• Can someone tell you at any time what to do or when and how to do it?

• Are you paid by the hour, week, or month? Can you get overtime pay?

• Do you work set hours, or a given number of hours a week or month?

• Do you work at the premises of the person you work for, or at a place or places he or she decides?

Self-employed pointers

If you can answer 'Yes' to the following questions, it will usually mean you are self-employed.

• Do you have the final say in how the business is run?

• Do you risk your own money in the business?

• Are you responsible for meeting the losses as well as taking the profits?

• Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?

• Are you free to hire other people on your own terms to do the work you have taken on?

• Do you pay them out of your own pocket?

• Do you have to correct unsatisfactory work in your own time and at your own expense?

Special Rules

These may apply to certain jobs or positions. If for instance you

• work in the building or construction industry as a labour only contractor;

• are a minister of religion paid by salary or stipend;

• are a salaried doctor, dentist, vet or pharmacist;

You should probably be classified as an employed person.
On the other hand, if for instance you

• work as a share fisherman;

• work for a company in which you have enough shares to have substantial control in the company;

• work for your spouse in a business;

you should probably be classified as a self-employed person.

Several jobs and part time working

The same considerations to determine employment classification will apply even if you work part-time or for a short period. Unless you can answer 'Yes' to the self-employed questions above, you will normally be an employee.
If

• you have more than one job, or

• you work for a number of different people for a few days or weeks at a time you will need to answer the questions on pages 3 and 4 for each job.

Remember, because you are self-employed in one job, it doesn't necessarily mean you will be self-employed in any other job you take on. Where, however, you provide services to many different persons and do not work regularly for one person to the exclusion of others, this may be relevant to the decision whether your work for each is as an employee, or a self-employed person. You can even be employed and self-employed at the same time in different jobs. For example, you could be employed as a part-time shop assistant and spend the rest of your time running your own business from home. You could work full time in a bank as an employee, and run a part time business in the evening or weekends. You may have a number of short term or part-time activities, some of which may amount to employments and others to self employment. It all depends on the facts.

How do I pay contributions?

Employed

It will be your employer's responsibility to deduct contributions from your pay and forward it to the Social Security Department. The leaflet 40 'Employed persons' explains this in more detail.

Self-employed

You are responsible for your own contributions. This means

• Telling the Social Security Department if you haven't already done so, that you are in business;

• Completing an application if you wish to pay earnings related contributions.

You will be sent a contribution card every 13 weeks, in advance, unless you choose to pay monthly or quarterly by direct debit.
The leaflet 41 'Self-employed persons' explains this in more detail.

Still not sure?

If you are not sure whether you are employed or self-employed, or if you have any other questions, please get in touch with the Contributions Assessment Section in our office on 732504 for advice.
This leaflet is for guidance and must not be treated as a complete and authoritative statement of the law.

For further information.

You can phone or call at the Social Security Office, Guernsey, or the States Office, Alderney where staff will be pleased to help you and from where copies of any other leaflet mentioned may be obtained.
If you are writing to us please quote your social security number if known.