Many people believe that contractors are not entitled to any employee benefits because they are presumed to be self-employed. However, a contractor may be classed as employed, so there may be some benefits they are entitled to.
How to work out if a contractor is self-employed
A person is self-employed if they run their business for themselves and take responsibility for its success or failure. Self-employed workers are not paid through PAYE, and they do not have the rights and responsibilities of an employee.
Someone can be both employed and self-employed at the same time, for example, if they work for an employer during the day and run their own business in the evenings.
If a person is self-employed, they have:
- protection of their health and safety
- protection of their rights against discrimination(in some cases)
- the rights and responsibilities set out by the terms of the contract they have with their client
HMRC may regard someone as self-employed for tax purposes even if they have a different status in employment law.
Are all contractors self-employed?
A contractor can be self-employed, or employed. If they are employed they will have the employment status of a worker, and they can also have the employment status of an employee if they work for a client and are employed by an agency, in which case, they would be entitled to contractor employee benefits.
If a contractor is classed as employed, then some of the benefits they are entitled to include:
- Statutory Sick Pay
- Minimum notice periods if their employment will be ending, for example, if an employer is dismissing them
- Protection against unfair dismissal
- Statutory adoption pay and leave
- Statutory shared parental pay and leave
- The right to request flexible working
- Time off for emergencies
- Statutory maternity and paternity pay and leave
- Statutory Redundancy Pay
Contractor employee benefits from Sapphire
When contractors choose Sapphire, we guarantee to be with them every step of the way by offering top-of-the-line employment support and benefits. All administration will be dealt with, such as calculating tax, National Insurance obligations and making payments to HMRC. Meanwhile, you’ll receive your wages quickly and accurately.
Contractors that use Sapphire are automatically enrolled into Smart Pension, which offers many benefits to contractors.
Contractors that use Sapphire as their umbrella company benefit from:
- Same-day payments – usually by 9 am
- No ongoing admin or paperwork
- First-rate service – rated Excellent on Trustpilot
- Continuous employment
- No unexpected tax bills
- Statutory payments
- Pension options including auto-enrolment into Smart Pensions and private pensions via salary sacrifice
Smart Rewards
On top of that, you will also have full access to Smart Rewards, which includes discounts on a range of goods from food and drink to electrical products and health and wellbeing subscriptions.
Plus, Smart Rewards also provides a range of ways to get the best deals such as:
- Cashback: You spend money at a retailer, and they pay cashback into your Smart Rewards account, which you can then use on future offers, or withdraw to your personal bank account.
- Online: Simply click through to your retailer and you’ll save automatically on your purchase either by cash back being added to your account, a discount being automatically applied or by using a code at check out.
- Store cards: You load up a digital or physical card with prepaid credit at a discounted price before you shop.
- Digital MasterCard: Your balance will be paid on a MasterCard meaning you can
- spend your money anywhere in the world.
Start saving on everyday essentials such as your weekly shop or treat yourself to something more extravagant, either way, do it for less. For more information on Smart Rewards including retailers you can save with, click here.
If you are looking for an umbrella company that will give you peace of mind that your financial administration is taken care of while working as a contractor or freelancer, get in touch with us on 01625 539 997 and our experienced advisors will be available to talk through your options.
