are footballers self employed

Are Footballers PAYE? – A Basic Guide

We generally think sports is all about camaraderie. It becomes a hot topic for the youth, especially in the season of competition, they can talk about it the whole day. However, for the tax experts, the only thing they discuss is, “Are footballers self-employed, what is their employment status and do footballers pay tax?”. One of the frequently asked questions about footballers in the industry is how are footballers PAYE and whether the tax implications remain the same for them.

Are you eager to learn about your queries? Let’s delve into the discussion of what we know about footballers and the relevant tax implications according to their employment status. Before we get to know whether the footballers are self-employed or PAYE, we will cover the introduction of what is PAYE, is a footballer PAYE, and how HMRC gathers information about their tax details to make footballers pay taxes.


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What is PAYE

PAYE is the abbreviation of pay as you earn as most of you know already according to your basic understanding. National insurance contribution and income tax are two major types of taxes you are paying through the PAYE system. These are two compulsory taxes each individual has to pay when he is earning through PAYE. In simple words, if you are associated with a company as an employee and you get your salary slip every month, you are considered to be PAYE. This makes it clear that you have a specific tax code and you pay the compulsory taxes from the amount of money that you are earning by working for a company.


Are Footballers Paid through PAYE?

Here comes the frequently asked question about the employment status of people about footballers, whether they are PAYE, self-employed, and whether are they paying taxes like other employed people or not. Well yes, the footballers are PAYE.  The club that hires them to play the game employ them for this purpose. There are the same formalities of written contracts just like the process goes with any other regular employee of a company.

The footballers are also paid by the PAYE system. There are regular deductions of compulsory taxes like NICs and income tax from the income of footballers. There is no room for foul play in this case as people assume without any understanding of this process.


How Does HMRC Know About How Much a Footballer Makes Out of His Earnings?

There is no doubt that HMRC is always well aware of the income streams and the income you are making from any source. So is the case when you are a footballer and earning through playing football, HMRC knows it and imposes tax implications on you accordingly. Since footballers are high earners, they usually fall in the high tax brackets due to their incomes.

The higher rates are implemented on you when you have crossed a certain limit of threshold. If your income is £12,570 or below, you will not be charged for tax implications. Between £12,571 – £50,270, the basic rate will be applied which is 20%. The higher rate 40% is applied when your income is between £50,271 – £150,000. And if your income is £150,000 + you will be charged with additional rate which is 45%.


Do Footballers Pay Tax?

So, let’s answer the question, do footballers pay tax? The footballers who are playing through a club and have a contract with them are considered to be the employees and they pay the tax straight to HMRC in the form of deductions from their pay just like other regular employees. Every month the tax is deducted before the salary amount reaches you.


The Bottom Line

Now that you have gathered a fair amount of information about ‘are footballers self-employed’, we can bring the discussion towards wrapping up. We can say that the footballers who are in a contract with the clubs are employed by them. The major compulsory taxes like national insurance contributions and income tax are deducted just like other regular employees. However, the tax brackets are usually higher for footballers because of the higher amount of income they earn. We hope these few minutes of reading will help you to develop a better understanding.


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Disclaimer: The information about ‘are footballers self-employed’ provided in this article includes text and graphics in general. It does not intend to disregard any of the professional advice.

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