What is Self-Employed Payroll?
Self-employed payroll refers to the process through which individuals who work for themselves handle the calculation and distribution of their own pay. Unlike traditional employment where an employer manages payroll, self employed individuals take on the responsibility of managing their finances such as taxes, deductions, and salary disbursement.
However, we get that employment status and contractor tax can be complicated. So, our experienced team guide contractors through the process; ensuring that they’re engaged in the most appropriate and beneficial manner for their current assignment.
As a self employed contractor, you will always be engaged on a contract for service however, there are a number of ways in which you could be taxed. For example, if you fall under the Construction Industry Scheme (CIS), you would be subject to the 20% tax deduction to HMRC in line with the CIS rules.
One of our qualified team members will ensure that you are on the correct tax method for your current assignment.
How does Self-Employed Payroll work?
- Your agency place you on a temporary assignment with your end client
- If you would like to provide your services as a self employed individual, our team will undertake Supervision, Direction and Control questionnaires with both yourself and your client, to determine which payment method is best for you. Irrespective of the sector with which you supply your services to, if you are subject to a level of Supervision, Direction or Control, your income will have to be subject to Pay As You Earn.
- You submit your hours and expenses (if eligible)
- We raise an invoice to your agency
- Your client sends payment to us
- Your payment is processed in the most tax-efficient way.
- Depending on the sector that you supply your services to, we may have to apply a percentage deduction to your income and remit that to HMRC. All services supplied to the construction industry are subject to their own tax treatment. If you are not supplying services to the construction industry, you will be responsible for paying your contractor taxes to HMRC when it is due.
- Payments are sent to your nominated bank account. You will receive text message confirmation of your payment.