It is important for individuals to determine whether they are an employee or self-employed. This is because when it comes to taxes, there are significant distinctions between the two.
An employed individual works under a contract of service for his employer. In return for his service, the employer will pay a salary to the employee. All income derived by an employee from his employment is taxable unless it is specifically exempted.
A self-employed individual may be a sole proprietor or a partner in a partnership. His income is derived from a business which may be from the buying and selling of goods or the provision of services. All self-employed persons must also compute and file their business income as this is taxable too.
Get in touch with your accountant to know more about this.
