I tend to ask the physio's to form a limited company when they work for me. Some other therapists such as pilates teachers may be self employed (but then they work under 15hrs a week). The company physio's will invoice each month based on the hourly rate that matched what they achieved in that past month (i.e. I pay them at the end of the month for the past months work). This way is of course not as secure for staff retention but appeals more to more senior physio's.

Depends really on your cash reserves and how well your clinic is going. It is always cheaper to give someone an employee contract and lock them into you entirely. But then in the beginning you're paying them for doing less work. But as the rate would be less this can offset that. Employees though have more legal support if you want to fire them so sometimes you wish they weren't an employee. In essence the advice would be different depending on the current state of the practice and the business (number of patients a week) it is seeing.