Configure Contract Employees for IR35

In compliance with government requirements, contract employees who are classified as off-payroll workers (IR35) are subject to off-payroll working rules and must be recorded in the FPS file that is sent to HMRC.

Note: The off-payroll working rules apply on a contract-by-contract basis. A contract employee might have some contracts that fall within the off-payroll working rules and some that don’t.

For more information about IR35 and off-payroll working rules, see https://www.gov.uk/topic/business-tax/ir35.

To configure a contract employee for IR35 reporting:

1. Go to People, open an employee profile, and click Employment > Employment Settings.
2. Click the Employment Type tab and then click Add.
3. In the Employment Type drop-down list, select Contractor.
4. Set the effective from date and, optionally, the effective to date.
5. Select the IR35 checkbox.
6. Click Save.