Employee

An employee is an individual who works for a company and holds a contract of employment. If you are an employee, your contract should include the following information, as well as anything that specifically pertains to your line of work and role:

  • Your pay – whether per hour or per annum
  • Your working hours – whether set hours or a number of hours per week
  • Your holiday entitlement per annum
  • Your entitlements to sick pay – whether this is just Statutory Sick Pay or discretionary pay from your employer
  • Your notice period – how long you or your employer must give in order to end your employment.

Not everyone who works for a company qualifies as an employee – some may be hired on a freelance basis or as a subcontractor. It’s important to check on your employment status as you will need to know this to check on your entitlements as well as your tax obligations. As an employee, your employer will pay your tax out of your wages on your behalf via PAYE, but if you are a freelancer, you’ll be responsible for completing a Self Assessment.

There are some occasions where you may need to complete a Self Assessment as an employee, however. Here are some circumstances where this may be the case:

  • Untaxed side income, such as from freelancing, renting out a property, income from savings, investments and dividends, or foreign income
  • You’re claiming a tax relief or paying the High Income Child Benefit Charge
  • You earn over £100,000

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