Understanding Worksome's Compliance and Classification by Market
Worksome's compliance approach varies by market. Each country has different rules governing how workers should be classified and paid. This article provides an overview and links to market-specific guidance.
Important: Do Not Mix Market-Specific Rules
IR35 is a UK-only concept. Worker classification (1099 vs W-2) is US-only. Superannuation is Australia-only. These are separate regulatory frameworks and should never be confused or combined.
United Kingdom
In the UK, the key compliance framework is IR35 (Off-Payroll Working Rules). Before engaging a worker, companies must determine whether the engagement falls Inside IR35 or Outside IR35.
Inside IR35: The worker is treated as an employee for tax purposes and is paid via PAYE. Worksome acts as the employer and handles tax, National Insurance, and pension deductions.
Outside IR35: The worker is paid gross as a sole trader or through their limited company. No employment taxes are deducted by Worksome.
Worksome provides the Classify tool to help companies make IR35 determinations. The output includes an AI Reasoning section explaining the basis for the decision.
For more details, see: Using Worksome Classify Tool - UK
United States
In the US, the key compliance framework is worker classification. Workers are classified as either:
1099 Independent Contractors: Paid gross without employment tax withholding. The worker is responsible for their own taxes.
W-2 Employees: Paid via payroll with tax withholding, benefits eligibility, and employer-side contributions.
Worksome provides the Classify tool to help companies determine the correct classification based on IRS guidelines (economic reality test, behavioral/financial control, relationship type).
For more details, see: Use the Worksome Classify Tool - US
Using the Worksome Classify Tool
The Worksome Classify tool helps companies determine the appropriate classification before engaging a worker. It is available for UK (IR35) and US (1099/W-2) markets.
Need Help?
If you have questions about compliance in your market, contact our support team via chat or email at hello@worksome.com.