Self-employed and the minimum wage
The minimum wage, including the National Minimum Wage and National Living Wage, does not apply to self-employed people.
Are the self-employed entitled to the minimum wage?
No. The minimum wage, including the National Minimum Wage and National Living Wage, does not apply to the self-employed. A person is self-employed if they run their business for themselves and take responsibility for its success or failure. The self-employed aren't paid through PAYE and they don't have the employment rights that employees would have such as entitlement to the minimum wage.
How to identify if someone is self-employed
In most cases, it is easy to distinguish between someone who is self-employed and someone who is a worker. Generally, a self-employed person:
- agrees a price for a job in advance and gives you an invoice or a bill on completion of the work
- controls their own time and decides whether or not to take each job
- provides their own equipment
- keeps the profits they make and bears any losses themselves
For further details, see employment status: self-employed and contractors.
However, a person can be both employed and self-employed at the same time eg someone who works for an employer during the day and runs their own business in the evenings or at weekends.
When it is not clear if someone is self-employed
Sometimes it is not easy to tell if a person is self-employed. For example, if someone is paid commission-only they may control their own time and keep a share of any profits they make, but they may not be genuinely self-employed for minimum wage purposes if it is not them but someone else, usually their employer, who bears any losses that are made.
You should not simply rely on a person's tax status when determining their entitlement to minimum wage, since someone who has been assessed as self-employed by HM Revenue & Customs (HMRC) for tax purposes may not necessarily be self-employed for the purposes of the minimum wage.
See who should be paid the minimum wage.
Employed or self-employed?
To determine if someone is employed or self-employed check their employment status or contact the HMRC Employment Status Customer Service Unit on Tel 0300 123 2326 (Monday to Friday, 8:30am to 4:30pm) to check if you or someone else is classed as employed or self-employed.
If you are unsure, you can call the on Tel 0300 123 1100 (Monday to Friday, 8am to 6pm).
If someone you claim is self-employed makes a complaint about minimum wage entitlement it is up to you to prove that you don't employ them as a worker and that they are not entitled to it.