Can a Housekeeper be self-employed? It is a very commonly heard questions that many people are asking themselves. Whether you are looking to hire a Housekeeper. Or if you are a Housekeeper yourself. It is important to know what the rules and regulations in the country of work are. And what might be the best option for you!
So, can a Housekeeper be self-employed?
In short, in the UK, the answer is yes! A Housekeeper can either be self-employed or employed under UK law. It is, however, important to know what both options mean. Both if you are a Housekeeper yourself, or if you are looking to hire a Housekeeper. So you can make the best decision suited for you, and get the right things in place.
If you are a Housekeeper who is self-employed, it simply means that you are responsible for paying your own taxes. The money you will be paid by the family or person you work for will be gross. Meaning that every year you will have to do your own tax return or self-assessment. And pay the correct amount of tax you owe HMRC. This also includes National Insurance, and other possible costs. So make sure you are putting away enough money per month for your tax payment each year!
Being self-employed can be a great option, but you have to be organised. You will not get any holiday pay, sick pay, or maternity leave pay. You will be, however, more flexible in your work agreement as you will not have an employment contract. There might be a self-employed agreement in place though. Which normally offers much more flexibility than an employment contract. Especially when it comes to notice periods.
From the Employers Perspective
If you are hiring a Housekeeper who is self-employed, you should pay them a salary in gross. You should not deduct any amount for Income Tax, National Insurance, or other deductions. If your housekeeper is self-employed you do not have to pay them holiday pay. Neither do you pay Statuary Sick Pay (SSP) or Maternity Pay.
Would you prefer to employ a Housekeeper, rather than them being self-employed? This would mean that you hire them, either directly or through your company, and they are not self-employed or paid through an agency.
There are several things you will need to put in place when employing someone. As an employer, you also need to make sure the Housekeeper has the suited and legal right to work in the UK. Have a look at visa requirements as this will depend on where the Housekeeper came from and their passport. Your Housekeeper might need a working permit to be able to legally work in the country of your residence, so check this before employing them.
When you employ a Housekeeper, you will be responsible for making sure the correct deductions are made correctly before paying their salary. Make sure you have looked at the following things:
- Ensure that they have the right to work in the UK
- You must give the Housekeeper an employment contract
- You will be legally obliged to pay your employed Housekeeper at least 20 days holiday plus 8 bank holidays each year (if in a full-time, permanent employment). If the employee is part-time then holiday should be set on a pro-rata basis.
- You will be legally obliged to pay the Housekeeper Statutory Sick Pay (SSP) and Maternity Pay, where relevant
- There will be payslips you will have to provide the Housekeeper.
- You will have to set up payroll/PAYE (or use a payroll service or accountant for this)
- You should deduct and pay the employees Income Tax, National Insurance contributions, as well as any other deductions from the salary paid.
From the Housekeepers Perspective
As an employed Housekeeper, it can give you much more security and stability. You will have a contract with clear rules, notice periods set up so you can be more secure in your job. In comparison to being self-employed. Also, if you do not like organising your own taxes and contributions, being employed might be a better option for you!
If you have a housekeeper on a fixed-term contract you can either employ them directly or they can be self-employed. The rules above still apply.
You might have a contract with your Housekeeper for less than a year. If this is the case, you may pay them for less than the usual 20 days holiday and 8 bank holidays. You should work out their holiday pay on a pro-rata basis, which means they earn their holiday as they work.
Income Tax and National Insurance Contributions
When you employ a Housekeeper directly, you must pay HMRC the Income Tax and National Insurance contributions. You will deduct this from the Housekeeper’s gross pay. There may also be other deductions from your Housekeeper’s gross pay, including:
- Student loan repayments
- Pension contributions
- Payroll giving (the employee can donate to charity before their tax is deducted)
- Child maintenance (if requested by the Child Maintenance Service)
So can a Housekeeper be self-employed? Absolutely! But as you can see, both options have their pros and cons. So make sure you understand what might work best for you. Do you need help, either as a Housekeeper finding a job? Or when you are looking to find the right Housekeeper for you and your household? Contact us! We have many years’ experience in the industry and can guide you through the whole process seamlessly. Why not contact us now and speak to one of our consultants to get the process started.