You are employed or an employee if you perform work under a contract of service where you work under the control of your employer.
You are self-employed when you perform work for others (e.g. provide a service) under a contract for service .
As a self-employed with your own business, you work for yourself and you are in the position to realise a business profit or loss. Your income is derived from the buying and selling of goods, or from providing professional or personal services.
A self-employed may be a sole-proprietor or a partner in a partnership.
Partners who are registered with the Accounting and Corporate Regulatory Authority (ACRA) are generally regarded as self-employed persons .
Partners who are self-employed should report their share of profit/loss and remuneration (salary, bonus, CPF, and other benefits) from the partnership in the 'Trade, Business, Profession, or Vocation' section and 'Partnership' sub-section in the personal income tax return.
There could be some cases where ACRA-registered partners are engaged under an employment contract with the partnership.
In such cases, the partners generally do not assume the liabilities of the partnership and do not have a share in the profit/loss of the partnership. They are considered employees of the partnership even though they have the title of 'partner'.
The precedent partner of the partnership should not allocate the income of such partners in the partnership tax return Form P. Partner engaged under an employment contract with the partnership should report income from the partnership in the ' Employment' section in the personal income tax return.
Note: Some self-employed like lawyers are paid on an hourly basis.
Note: Some employees can work for more than one employer at any one time.
When you work for more than one payer concurrently, you have to determine your status using the above factors for each job or engagement you do. You can be an employee and a self-employed at the same time.
For example, you may be an employee of an organisation, and are also engaged in direct selling or running of an online business. In this case, you will be classified as a self-employed despite also earning employment income, and the income from the direct selling or online business is a trade income. Both employment and trade income are taxable.