What is an employee?

Definition of employee

An employee is someone who works for a business under a contract of employment.

A contract of employment will lay out important information such as how much the employee will get paid (his/her 'salary' or 'wages'), what hours he/she is expected to work, how many days a year he/she will be given as paid holiday, what he/she will be paid during periods of sickness, and how much notice will be given to end the employment.

Not everyone who works for a business will be an employee, for example a business may hire a freelancer or subcontractor instead. Typically, a freelancer or subcontractor will work under a contract for services, which is less restrictive than a contract of employment and carries fewer rights; for example, a freelancer or subcontractor is not normally entitled to be paid during periods of holiday or sickness.

Got questions? Ask Emily!

FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.

Bookkeeping and tax tips

We'll keep your email safe · Read our privacy policy