In industry in general, there are two ways of engaging the services of an individual: one can be under a self-employed arrangement; the alternative is through PAYE. Now those two phrases are very commonly used but understanding the difference is quite important.
The difference is that with PAYE, an employee is engaged under a contract of employment. And generally speaking, they are obliged to work for his or her employer.
PAYE Advantages and Disadvantages
The advantages to the individual, historically, were that it guaranteed a set income and employment has a number of rights that protect the individuals from exploitation, not least the right not to be unfairly dismissed, and to minimum wage. Lately, that has also included the right to access a pension scheme of which the employer contributes some payments towards that.
The thing is, that model has slightly been weakened by things like zero hour contracts where individuals are not necessarily guaranteed to know how much money they’re going to earn. So that’s a slight denouement of the traditional employee model. However, the general advantage to the individual is that generally speaking, they have protection of employment law, they know how much they are going to earn and have pension contributions made on their behalf. You would also be entitled to statutory sick pay or company sick pay, depending on what the employer has in place.
The advantage to the employer of a PAYE workforce is that they know what resources they have available, and they have control over what and how their employees work. The disadvantage for the employer is that the cost of an employed workforce is generally around 45% more at least, in additional payments for employers like national insurance or pensions, holiday pay etc, etc.