Employing Staff - PAYE or S/C
Discussion
The Revenue like to think that you do not have the choice.
Genuine "employees" (including part timers or temp staff) MUST be processed under the PAYE and Class 1 NI regulations.
Only bona fide "sole trading" individuals can be taken on in self-employed a sub-contract capacity.
From an overall tax point of view, "self-employed" individuals are cheaper for the "employer" to use as there is no Employer's National Insurance liability arising on the payments made to them. In addition, the individual "employed" has the responsibility of ensuring that they return their tax details to the Revenue each year and pay their own tax and Class 2 and 4 NI. This, of course, reduces the admin burden on the "employer".
Be aware that there are special rules applying to those who work in a sub-contract capacity in the construction industry.
From a non-tax [point of view. an "employer" might think that he has more flexibility and less legal obligations to an individual who is not an employee. By and large, this is true. But there have been quite a few non-tax "Employee Status" cases where non-employees have been found to be "employees" for the purposes of determining holiday leave, maternity leave, unfair dismissal, redundancy rights etc. So, all is not as clear cut as some people might think.
Genuine "employees" (including part timers or temp staff) MUST be processed under the PAYE and Class 1 NI regulations.
Only bona fide "sole trading" individuals can be taken on in self-employed a sub-contract capacity.
From an overall tax point of view, "self-employed" individuals are cheaper for the "employer" to use as there is no Employer's National Insurance liability arising on the payments made to them. In addition, the individual "employed" has the responsibility of ensuring that they return their tax details to the Revenue each year and pay their own tax and Class 2 and 4 NI. This, of course, reduces the admin burden on the "employer".
Be aware that there are special rules applying to those who work in a sub-contract capacity in the construction industry.
From a non-tax [point of view. an "employer" might think that he has more flexibility and less legal obligations to an individual who is not an employee. By and large, this is true. But there have been quite a few non-tax "Employee Status" cases where non-employees have been found to be "employees" for the purposes of determining holiday leave, maternity leave, unfair dismissal, redundancy rights etc. So, all is not as clear cut as some people might think.
Gassing Station | Business | Top of Page | What's New | My Stuff