The United Kingdom pairs a large, English-speaking talent market with clear, moderate employment rules. All-in employer cost runs around 1.15x the gross salary, mostly employer National Insurance and mandatory pension contributions. Here is what to know before your first UK hire.
Employment is governed by statute and common law: a written statement of terms is required from day one, working time is regulated, and employees gain added protections (including unfair-dismissal rights) after two years of service. Auto-enrolment into a workplace pension is mandatory.
The National Living Wage is £11.44 per hour for workers 21 and over from April 2024*, with lower bands for younger workers. It rises each April.
Monthly payroll via PAYE. There is no statutory 13th salary, and bonuses are discretionary or contractual.
There are 8 bank holidays in England and Wales (Scotland and Northern Ireland differ). Paid time off for them counts toward statutory leave unless the contract says otherwise.
A written statement of main terms is due on or before day one. Probation is contractual, commonly three to six months, and right-to-work checks are mandatory.
Employer costs sit around 17%, driven by employer National Insurance contributions and the mandatory workplace pension, plus the apprenticeship levy for larger payrolls.
Employer NIC is charged above a secondary threshold, so lower salaries carry less. Pension auto-enrolment applies to qualifying earnings between set bounds.
Employees pay income tax (20-45%) and employee National Insurance through PAYE, plus their own pension contribution. Withholding is the employer's job, which under EOR means ours.
5.6 weeks of paid holiday a year (28 days for a five-day week), which can include the 8 bank holidays.
Up to 52 weeks of statutory maternity leave. Statutory Maternity Pay runs for up to 39 weeks, at 90% of pay for the first six weeks then a flat weekly rate*.
Two weeks of paternity leave, plus shared parental leave of up to 50 weeks that parents can split.
Statutory Sick Pay is payable for up to 28 weeks at a flat weekly rate* after the qualifying days. Many employers offer more generous company sick pay.
Statutory minimum notice is one week after a month of service, rising by a week per year up to 12 weeks. After two years, employees have unfair-dismissal protection requiring a fair reason and process.
Statutory redundancy pay applies after two years of service, based on age, weekly pay (capped), and years of service.
Contractual, usually three to six months, often with shorter notice during the period.
IR35 / off-payroll rules mean a contractor working like an employee can be taxed as one, with the engager often liable. HMRC enforces this actively.
*All figures are estimates from public sources (2025-26), pending ops verification - same basis as the EOR cost calculator. Not tax or legal advice.
Compliant UK employment contract, PAYE payroll, pension auto-enrolment, and benefits, handled. One invoice, flat $399 per month.