Simply Business homepage
  • Business insurance

    • Business Insurance FAQs

    Business insurance covers

  • Support
  • Claims
  • Sign In
Call Us0333 0146 683
Chat With UsChat support 24/7

Am I self-employed? A guide to working out your employment status

7-minute read

Lucy England

Lucy England

15 May 2024

Share on FacebookShare on TwitterShare on LinkedIn

Am I self-employed? Many people are clearly self-employed or employed, but for others employment status is trickier to work out.

There are actually five main types of employment status. Here’s our guide to the different types and how to work out what applies to you.

Am I employed or self-employed?

If you don’t fit neatly into either category, it can be hard to tell. Perhaps you have more than one job. Or you freelance, but more as a long-term contractor for the same company than as a sole trader with a small business of your own.

Either way, whether you’re self-employed or employed, this guide is designed to run through your employment status meaning. According to there are five ‘main types of employment status’, so this guide should help you work out where you fit in.

From there, you can get more information on your rights and benefit entitlements. If you’re technically employed, for example, your employer will have certain responsibilities they need to meet.

Self-employed definition

According the the government, you’re self-employed if you run your business for yourself and ‘take responsibility for its success or failure’.

Another clue is how you’re earning money for your work. If you’re self-employed, you won’t be paid through employee Pay As You Earn (PAYE). And you won’t be entitled to the rights and responsibilities that apply to employees.

To work out if you have self-employed status (or contractor status), ask yourself the following questions. If it’s ‘yes’ to most of them, you’re probably self-employed:

Are you self-employed?

Are you in business for yourself? This means you’re responsible for its success or failure, making a profit or a loss.

Are you free to decide what work you do? And when, where and how you do it?

Could you hire someone else to do the work, if you wanted to?

If there was a problem with your work, would you be responsible for fixing it in your own time?

Do you and the employer agree a fixed price for your work, regardless of how long the job takes to finish?

Do you use your own money or funding to buy what’s needed to run the business and deliver for the employer?

Are you free to work for more than one client?

Are you exempt from PAYE?

The following questions relate to your employment rights. You’re probably self-employed and don’t have employee rights if you answer ‘yes’ to most of these:

  • do you put in bids or give quotes to get work?
  • do you tend to supervise yourself when working?
  • do you submit invoicesfor the work you’ve done?
  • are you responsible for paying your own National Insurance contributions and tax?
  • are you exempt from holiday pay or sick pay?
  • do you work under a contract (often called a ‘contract of services’ or ‘consultancy agreement’) that uses terms like ‘self-employed’ or ‘independent contractor’?

Difference between contractor and self employed

A self-employed person is someone who works for themselves, not as an employee. From hairdressers to market stall traders, they provide services and products to clients and customers, usually for an agreed or advertised cost.

Contractors can also be self-employed, but they perform tasks on a contractual basis, rather than selling any products or rolling, bookable services. For example, a plumber would work for a client according to an agreed, one-off contract. You could repeat it, but as another contract. A market stall trader, on the other hand, isn’t contracted to sell you bananas.

A contractor can be self-employed, employed or a worker, depending on whether they work for an agency or not.

For contractors working in the construction industry, check out the Construction Industry Scheme (CIS) for details on your HMRC status.

Self employed but working for an employer

It’s possible to be employed and self-employed at the same time, for example the person who works as a receptionist during the week and runs a pet grooming business on the weekend.

If this sounds like you, make sure your daytime employer has your employment status filed correctly and that you’re up to date with your responsibilities for the self-employed work you’re doing on the side.

Check up on your second job tax responsibilities and how to achieve a good work life balance.

Employment rights for self employed people

Your employment rights, and how they’re different for you as a self-employed person, are another key consideration. Being your own boss means employment law doesn’t give full cover, but your health and safety will still be protected, and sometimes you’ll be protected against discrimination. Check your client contracts and highlight what’s been agreed so you’re fully informed.

Telling HMRC that you're self employed

Finally, if you’ve become self-employed, it’s very important that you let HMRC know. Any changes in your employment status should be flagged to HMRC, so double-check all your records are correct. You can access a full step-by-step guide here, but here’s a quick overview.

Once registered as self-employed you'll have a number of obligations and responsibilities, like completing an annual Self Assessment tax return.

HMRC employed or self-employed tests

These are designed by to check your status for tax purposes. You can use them to do a quick employment status check.

Contact HMRC by phone or use the online Check Employment Status for Tax tool.

Other types of employment

As we mentioned earlier, there are five main types of employment status in the UK. If you don’t think you’re actually self-employed, check against the four other types of employment below to see if you fit their criteria.


The government defines an employee as ‘someone who works under an employment contract’. But this is a bit vague, as contractors and other types of self-employed people often have a contract with the client they’re working for.

The easiest way to work out whether you’re an employee is by answering the following questions. If the answer is ‘yes’ to most of them, you’re probably an employee:

Are you an employee?

Are you required to work regularly (unless you’re on leave, including holiday, sick leave or maternity leave)?

Do you need to do a minimum number of hours? And do you expect to be paid for the time worked?

Do you work from the business’s premises or at an address specified by the business?

Is it just you who can perform the role (for example, you can’t send someone else to do your work instead)?

Does the business deduct tax and National Insurance contributions from your wages?

Do you get paid holiday?

Are you entitled to contractual or Statutory Sick Pay and maternity or paternity pay?

Can you join the business’s workplace pension scheme?

Do the business’s disciplinary and grievance procedures apply to you?

Does your contract set out redundancy procedures?

Does the business give you materials, tools and equipment for your work?

Is this the only business you work for? And if you have another job, is it completely different from your work for this business (for example, you work as a receptionist but also run a pet grooming service at the weekend)?

Does your contract, statement of terms and conditions, or offer letter use terms like ‘employer’ or ‘employee’?

Am I an employee? Other things to check

You might be an employee but have a different status with the business for tax purposes. If you’re unsure, ask your employer to run through this with you.

If your employment status was worked out incorrectly, you and your employer may have to pay outstanding tax and other penalties, or you may lose your entitlement to benefits. It’s worth checking everything’s in order.

Employees can also be employee shareholders.


If you answer ‘yes’ to most of these, it’s likely that you’re a worker. Check your contract or ask your employer if you’re not sure:

Are you a worker?

Do you have a contract or arrangement to do work for a ‘reward’ (see below)? This can be written or verbal.

Is this reward for money or a benefit in kind (for example, promise of contract or future work, perks, or a loan)?

Do you have a limited right to subcontract the work?

Do you have to report for work, even if you don’t want to?

Does your employer have to have work for you to do as long as the contract or arrangement lasts?

Are you doing the work outside of setting up a limited company structure (for example, an arrangement where you run your own limited company and the ‘employer’ is a customer/client)?

If most of these apply to you, as a worker you’re entitled to specific employment rights like statutory leave and national minimum wage protection. So it’s important to get clear about your status and clarify with your employer if you think something’s not right.

Casual or irregular workers

This is a specific type of employment and will usually apply if someone occasionally does work for a business, but that business doesn’t have any obligation to offer them work. The worker is also under no obligation to accept work. A contract like this will use words like ‘casual’, ‘zero hours’ or ‘as required’.

You’ll need to sign up to your employer’s terms and conditions to work, even if it’s only verbally, and you’ll be under some sort of supervision. Unlike some workers, you wouldn’t be able to subcontract this kind of casual work. However, the business should deduct tax and National Insurance contributions from your pay and provide the necessary tools or equipment.


If you’re a company director, you’re running a limited company on behalf of shareholders. You may still have an employment contract – it depends on what sort of work you’re doing for that business.

Directors have specific rights and responsibilities. For tax and National Insurance calculations, they’re classed as ‘office holders’.

If you’re a company director, you could still have an employment contract and specific rights. If you’re not sure what these are, seek legal advice or contact HMRC to check.

Office holder

A bit more unusual, office holders are defined by the government website as people who’ve ‘been appointed to a position by a company or organisation but don’t have a contract or receive regular payment’. These can include company secretaries, club treasurers, trustees, clergy and many others.

For more information check the office holder page on

It’s worth noting that although office holders are different to employees, self-employed people and workers, they may still have an employment contract.

For more information and an employment status definition

Acas is a great resource for employment status queries in England, Wales and Scotland. For Northern Ireland labour queries, check with the Labour Relations Agency.

More useful articles for the self-employed

Photograph 1: JenkoAtaman/

Ready to set up your cover?

As one of the UK's biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?

Start your quote
Lucy England

Written by

Lucy England

<span style='font-size: undefined;'>Lucy England has been writing for and about small businesses for around ten years. Initially working as a journalist covering tech startups, Lucy has extensive experience writing about insurance, fintech, tax and financial services for brands including Moneycorp and Muse Finance. Lucy has also supported a number of small businesses with their marketing, across industries as diverse as engineering and management consulting. </span>

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Share on Facebook
Share on Twitter
Share on LinkedIn

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


HomePopular articlesGeneral businessGuestInsuranceLandlordLandlord resourcesLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers’ liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceVan insuranceInsurers


About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite map

Customer support

Contact & supportPolicy renewalMake a claimProof of policyComplaintsAccessibility


6th Floor99 Gresham StreetLondonEC2V 7NG

Northampton 900900 Pavilion DriveNorthamptonNN4 7RG


Careers at Simply BusinessTech careersCurrent opportunities


BenefitsRefer a friend


Terms & conditionsPrivacy policyCookie policyVuln Disclosure policy


Knowledge centreOpinionsMicrosites

© Copyright 2024 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.