Self-Employed vs Employed Fitness Instructors

Fitness classes near Marlborough

Someone who is self-employed generally works for themselves as a business owner, freelancer, or as an indepenant fitness instructor. Earnings are usually directly from the business or freelancing, instead of salary or commission-based reimbursement.

Let’s start with some definitions:

Self-Employed Definition

The HMRC defines an individual as being self-employed, for tax purposes, as:

A person is self-employed if they run their business for themselves and take responsibility for its success or failure.

Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.

Employment Status

When you are employed by a company you are considered an employee. Employees are on the company payroll, and the employer takes care of taxes and NI.

Employees may be offered benefit packages that include things like paid sick leave, holiday, private health insurance, pension plans, cars and so on.

Self-Employment Taxes

If you’re self-employed you are responsible for paying your own taxes to the HMRC. Even if you do not owe any income tax, you must complete self-assessment forms and quite probably use a bookkeeper or accountant to do these things for you.

In addition to income taxes, self-employed workers must also pay NI, as appropriate.

Independent contractors are not entitled to employee benefits, even those mandated by law like unemployment and worker’s compensation, because they are not employees of a company. Unlike a typical employee, independent contractors work less regularly. They work as and when required, and usually bill by the hour or per project, depending on the terms of their contracts.

From a tax perspective, employing regular employee’s costs significantly more for employers than independent contractors because they are required to pay NI, State and unemployment taxes in addition to consistent, salary or wage-based work.

Pros and Cons of Self-Employment

While there are many positives to being self-employed such as choosing your own hours (full or part time), shortening or completely avoiding your commute, focusing on career objectives that matter most to you, being able to work remotely and tax deductions, one of the downfalls is that benefits usually included in salaried work must be paid for out-of-pocket.

Furthermore, self-employed workers are responsible for both losses and profits. There are no paid holidays or sick pay, and the earning schedule may be less in the short term when you are starting out. With no boss or supervisor to manage you, it takes great focus and motivation to be self-employed. In many circumstances, hours are long and working on your own can be lonely.

Health insurance must be contracted for by the individual, there are no paid vacations or sick days, and retirement must be planned for.

So how does this relate to Fitness Instructors?

62% of the instructors in the industry are self-employed!  Pretty big number.  These instructors tend to work in Community Halls/Village halls. So unsurprisingly these individuals are pretty self-motivated and focused!

A self-employed instructor is responsible for his/her work schedule, they choose their venues; choose their hours, their days and so on.  Often working when most of the working population are in their leisure time, again, unsurprising. This means for most, evenings and weekends, depending on the demographic for their classes.  Most self-employed instructors choose the classes they teach and so they will teach those classes they feel most ‘akin’ to, those they themselves are naturally drawn to, those classes they love to do themselves.

These individuals are responsible for everything related to their classes; all administrative aspects from public liability insurance and PPL insurance for playing music in a public environment, to finding and hiring halls, negotiating terms for those halls. All their own professional development which includes further training on the classes they operate, developing their technical and teaching skills.  Training required to use any business apps and any business skills they may need. All social media and that’s a minefield!  Twitter, Facebook, Instagram, Snapchat, Vimeo, YouTube etc etc, or finding and ‘employing’ someone to do this on their behalf!  Marketing, all the aspects relating to promoting their classes or fitness programmes, including all the aforementioned apps to promote their wares! This before they start to compile a lesson plan for each class, which is the nuts and bolts of what the instructor is going to deliver for all their class participants to complete….. this will need practising, this will need music to work out along to…. Music needs to be chosen, compiled into playlists, added to whatever device is going to be used in the class.

Then there’s the kit for classes, as a self-employed instructor, they purchase their own equipment, which then needs to be transported to whichever venue, set up, after the class, all packed up, taken back to wherever it is stored ready for the next ‘outing’.

Your self-employed instructor needs to be at the venue at least half an hour before hand and ready to meet, check-in, take payment for each participant.  They are responsible for the PARQ – Physical Activity Questionnaires which give details of any limitations to exercises.

Your employed instructor will need to prepare lesson plans, prepare music and will practice their sessions too.  Often they are dictated to as to which classes they teach.  The facility will be in charge of timetabling and what classes are operated.  Small classes or those not making the required amount of profit are often stopped pretty quickly.  The instructor will have the benefits of an employee, a salary, pension, health cover, life cover, holiday pay, the use of the facility and access to other classes should they wish.  They will be given their work schedule, as opposed to choosing their schedule.

The facility they work for will take care of all administrative aspects, all booking in of client participants, any forms they need to complete, all marketing and advertising of the classes.

In terms of client experience, the self-employed instructor is much more likely to build a relationship with their class participants.  From the off they are much more involved with their participants than the employed instructor.  The self-employed, depending on how they timetable their own classes will often have more time available to meet and speak with their classes.  Employed instructors are often slightly removed from it all, seeing only the faces of their class as they come into the studio or hall.  They are often scheduled to lead classes back to back, so one class straight after another, or PT session.

Your self-employed instructor has much more of a vested interest in getting to know their clients, ensuring that the class they deliver is the best they are able to give, they really want their clients to come back and keep coming back.  Their livelihood depends on it.  As an employee, instructors will get paid their hourly rate whether there is one client present, or 100, so they have less need to encourage their people to return again and again.

Personally I think that makes a big difference to the experience of a client, but what do you think?