# 15.2, Stay employed or go self-employed? The honest comparison
Here’s the honest “stay on wages or go on your own?” breakdown, using UK data and real‑world experience.
1. Typical PAYE pay for a newly qualified tradesperson
ONS and trade analyses lump everyone from fresh‑qualified to old hands together, so you have to read the numbers as “middle of the pack”, not first‑year rates. A new finisher will usually come in a bit under these and work up over 2–3 years.
Typical full‑time employee medians (gross, UK‑wide):
| Trade (employee) | Rough median annual pay | Notes |
|---|---|---|
| Electricians (SOC 5241) | ~£39,000/yr median, bottom 10% ~£26k, top 10% ~£55k | New qualifiers often start low 30s and climb. |
| Plumbers / heating (SOC 5314) | Low‑mid £30k median on ASHE tables | New finishers commonly £27k–£32k. |
| Bricklayers (SOC 5312) | Around low‑mid £30k median | Site bonuses/price work can push this. |
| Construction trades n.e.c. (painters, plasterers, etc.) | Upper 20s to low 30s median | Lots of part‑time / seasonal drags the average down. |
On PAYE, expect £27k–£32k as a starting point in many trades, with electricians and plumbers at the higher end, painters/finishing at the lower end, and a path into the mid‑30s+ in a few years if you stick at it.
2. Typical earnings if you’re self‑employed
The best regular window into self‑employed site rates is Hudson Contract’s pay benchmarking, which tracks CIS operatives across the country.
- Recent data shows average self‑employed construction labour “earnings” around £950–£1,050 per week before expenses, based on typical weeks.
- That’s roughly £49k–£55k a year if you were flat‑out all year with no unpaid downtime. In real life, you lose weeks to weather, illness, quiet spells and time off.
Hudson’s breakdown by trade usually shows:
- Top site trades (e.g. some M&E, certain joinery, steel/timber frame, specialist finishes) hitting £1,100+ per week in busy regions.
- Other trades a bit below that but still well above the PAYE medians once you’re established.
The catch: and this is important:
Those weekly figures are turnover, not take‑home. You have to strip out materials (if included), van, tools, insurance, accountant, holidays, tax and NIC before comparing with a PAYE wage.
For a new self‑employed tradesperson just out of their time, a realistic line is:
If you get regular work at average site rates, you can gross more than a PAYE mate quite quickly, but your reliable, net income is often similar or worse in year one once you strip out costs and downtime.
3. Benefits: PAYE vs self‑employed
Here’s how the basics normally stack up:
| Benefit | Employed (PAYE) | Self‑employed / CIS |
|---|---|---|
| Holiday | At least 5.6 weeks paid leave a year (can include bank holidays). | No paid holidays. Time off = zero income. You must price this into your day rate. |
| Sick pay | Statutory sick pay at minimum; some firms offer enhanced company sick pay. | No sick pay. If you’re ill, you earn nothing unless you have income protection insurance. |
| Pension | Employer must auto‑enrol you and pay a minimum 3%+ employer contribution. | You sort your own pension (SIPP etc.) and fund 100% of it yourself out of profits. |
| Training | Many larger firms cover job‑related tickets (CSCS, IPAF, SMSTS, etc.) and some CPD. | You pay for courses yourself, unless a manufacturer / CITB grant / main contractor chips in. |
| Job security | More protection from unfair dismissal and redundancy; redundancy pay rules apply. | When the contractor’s quiet, they just stop calling. No redundancy pay; contracts can end overnight. |
For someone early in their career, PAYE is “lower top‑end but more padded”. Self‑employed is “higher ceiling, fewer safety nets”.
4. What HMRC actually cares about (IR35 / status)
You don’t get to just “pick” employed or self‑employed because you fancy it. HMRC cares how you work in reality.
- IR35 and employment status rules say: if you’re working like an employee, you should be taxed like one, even if you have a limited company or you’re “on CIS”.
- HMRC looks at things like:
- Who controls what work you do, where, when and how.
- Whether you can send someone else in your place (substitution).
- Whether you take any real financial risk.
- Whether you work for multiple clients or basically one “employer”.
- There’s an official online tool: Check Employment Status for Tax (CEST), used to help decide if a role is employment or self‑employment for tax. Construction advisors warn that CEST isn’t perfect, but it’s what HMRC points to if they question your status.
5. The real financial risks of going self‑employed straight after qualifying
Here’s the bit no one explains properly when you’re still an apprentice.
5.1 Income volatility
On PAYE, your wage keeps coming even if the firm has a quiet week (unless they start laying people off). Self‑employed, a run of bad weather, a contractor going bust, or a slow month means instant drop in income. No sick pay, no holiday pay, no redundancy.
5.2 Tax shock
First‑timers often forget:
- You’ll owe income tax and Class 2/4 NI on profits.
- Your first January tax bill can cover last year plus “payments on account” towards next year.
- If you’ve spent everything you earned, you’re forced into debt or panic‑pricing jobs to catch up.
5.3 Underpricing
New self‑employed tradespeople commonly base their prices on their old PAYE rate plus “a bit extra”, not on full costs. Once you factor in van, tools, downtime, holidays and tax, that “bit extra” isn’t enough to keep the business or your lifestyle afloat.
5.4 No buffer for mistakes
In your first year, you will mis‑price something, have a bad payer, or need an unexpected tool or van repair. PAYE gives you a cushion: you still get paid while sorting it. Self‑employed, those mistakes hit your own bank account immediately.
5.5 Compliance and fines
Late registration with HMRC, late tax returns or unpaid CIS liabilities can mean fines and interest. Get your admin wrong and you can lose more than you ever “saved” by dodging PAYE in the first place.
A fair, straight‑up way to put it:
Self‑employment can absolutely pay more in the long run, and a lot of trades go that way. But going self‑employed day one after qualifying, with no savings and no regular clients, is a high‑risk move. You’re swapping a smaller, steady wage plus benefits for a bigger but bumpier income and all the risk on your shoulders.
What to do next
- Read: 15.1 – I’ve finished my apprenticeship · now what? (the full picture)
- Read: 15.3 – Going self-employed straight out of college · realistic or stupid?
- Read: 15.4 – Your first year self-employed · what actually happens
- Read: S7 – Self-employed vs employed (the full HMRC status guide)
- Read: 14.2 – How to price your first job without underselling yourself
- Download: Self-employed vs employed comparison worksheet (once live in Doc Hub)
- Use: Employment Status Checker – check how HMRC would likely see your current arrangement
Sources (UK)
- ONS Annual Survey of Hours and Earnings (ASHE) – median employee earnings by SOC code for electricians, plumbers, bricklayers and construction trades.
- Hudson Contract – weekly self-employed construction pay benchmarking data (CIS operatives).
- HMRC Employment Status Manual (ESM) – IR35 and employment status guidance.
- HMRC CEST tool – Check Employment Status for Tax online tool.
- GOV.UK – statutory sick pay, holiday entitlement, auto-enrolment pension rules.
- ONS Labour Force Survey – 37% self-employment rate in UK construction.
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