A self-employed person is an independent contractor, not an employee. If in practice the company manages their work the way it manages staff, a self-employed contract will not protect it: the tax authorities and the labour inspectorate assess the actual relationship, not the title of the document.
1. Why the issue became sharper in 2026
From 1 January 2026 the company withholds 1% from payouts to the self-employed and reports on each of them. This gives the tax authorities a full picture: whom you pay, how often and how much. Regular identical payouts to the same people stand out in the data. In parallel, since 2025 the labour inspectorate has carried out desk audits of employers on employment matters, and tackling informal employment remains a state priority.
2. What the self-employed are directly prohibited from doing
The Regulation on carrying out activity as a self-employed person (Cabinet of Ministers Resolution No. 806 of 23.12.2020) sets two restrictions:
- a self-employed person may not use the labour of hired workers;
- a self-employed person may not at the same time work as an employee.
The first conclusion: you cannot move a current employee to self-employment while keeping their duties, schedule and workplace.
3. Signs of employment
Inspectors look for features typical of an employment contract under the Labour Code:
- the contractor works on the company's schedule and is tracked in a timesheet;
- they have a permanent workplace, a pass, a corporate email and a job title in documents;
- they follow internal rules and attend briefings like staff;
- pay is fixed, twice a month, regardless of the volume of results;
- the company provides tools and equipment and covers the contractor's costs;
- a manager assigns tasks throughout the day and controls the process rather than the result;
- the contractor works for one company only over a long period;
- their leave is approved and sick days are paid.
A single sign does not by itself mean employment, but a combination of several almost certainly leads to reclassification.
4. Consequences of reclassification
| Consequence | What it means |
|---|---|
| Additional personal income tax | 12% of payouts the company should have withheld as employer |
| Additional social tax | 12% of the payroll for the whole period |
| Penalty interest and tax fines | for failing to withhold and late payment |
| Administrative liability | a fine under the Code of Administrative Responsibility for violating labour law, higher for repeat violations |
| Employment guarantees | the contractor may demand formal employment, leave compensation and other guarantees |
Note that the 1% withheld earlier does not offset the reassessment: it is a tax under a different regime.
5. Checklist: how to lower the risk
- The contract describes a result: what, in what scope and by when.
- Work is formalised as tasks, with an act signed for each one.
- Pay depends on completed tasks, not on days worked.
- The contractor decides how and when to do the work and uses their own tools.
- Documents contain no job titles, timesheets or internal rules.
- The contractor's activity is on the list of 72 types and fits an order from a legal entity.
- The contractor is not your employee and was not your employee with the same functions.
- Every payout has a contract, an act, an e-invoice and 1% withheld.
If the relationship is in fact employment, signing an employment contract is more honest and, in the long run, cheaper than risking reassessments for several years.
This material is for reference and reflects the legislation of the Republic of Uzbekistan as of October 2026. Before acting on a specific situation, check the current wording of the acts on lex.uz or consult a tax adviser.