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An employer is any person, (which includes any individual, company, partnership or public body) who engages or hires the services of someone and in return pays a wage or fixed payment.

However, there is sometimes a fine line between employment and self-employment. Listed below are some guidelines which should assist in determining an individual’s employment status.

A person will probably be an employer paying an employee if:

  • the individual works wholly or mainly for the person’s business;
  • the individual works set hours or a given number of hours per week/month;
  • the individual is paid so much per hour, per week or per month;
  • the individual works at the business premises or at a place decided by the person;
  • the individual is instructed by the person regarding what job to do;
  • the individual receives sick pay and has an annual holiday entitlement.

A person will probably not be an employer but will be paying a self-employed individual if:

  • the individual is ultimately responsible for how their business is run, and has risked their own capital in their business and therefore, they are responsible for their profit or loss;
  • the individual decides how to undertake a job and when and where they do it;
  • the individual provides their own major items of equipment;
  • the individual hires other people on their own conditions to undertake a job;
  • the individual has to correct unsatisfactory work at their own expense;
  • the individual invoices the person for the work they have carried out.

An individual’s employment status can be confirmed by the Income Tax Division; it cannot be decided by a personal agreement between parties. If there is any doubt, please contact the Division.

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