The short version: An employee is someone who works for a company under an employment contract. Your employer controls what you do, when you do it, and how you do it. In return, you get things like holiday pay, sick pay, and pension contributions.
How do employees pay tax?
Most employees pay tax through PAYE (Pay As You Earn). Your employer deducts Income Tax and National Insurance from your wages before you receive them, then sends the money to HMRC. You don’t usually need to do anything yourself.
Am I definitely an employee?
Not everyone who works for a company is an employee. You might be a worker, a contractor, or self employed instead. The distinction matters because it affects your tax, your rights, and what benefits you’re entitled to.
Generally, if you can choose when and how you work, provide your own equipment, and could send someone else to do the job, you’re probably not an employee. If your employer controls your work and you can’t just swap shifts with a mate, you probably are.
When might an employee need to file a tax return?
If you have other income besides your salary, like rental income or significant savings interest, or if you’re a higher earner, you might need to complete a Self Assessment even though you’re employed.
Not sure about your employment status or tax situation? Get in touch and we’ll help you figure it out.
