Hire in United Kingdom

Employer of Record(EOR) in United Kingdom

United Kingdom Workforce Unlocked: How Employer of Record Makes Hiring Easy

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At a Glance

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The UK is famous for its progressive  economy. The country ranks  6th in the world, in terms of economy size. According to the International Monetary Fund, the UK holds the position of 5th largest Nominal GDP.

Major Economic Hubs:

London, Manchester, Liverpool, Leeds, Glasgow, Birmingham

Skills in Demand:

IT Business Analyst, Programmers, Software Engineers

Public and Provincial Holidays

Employee Leaves


Resident Tax Information

ermanent residents who are also domiciled in the United Kingdom are taxed on their worldwide income and capital gains. Temporary residents and non-resident employees are  taxed on their income derived within the UK but not on capital gains.  

Resident employees are taxed on their annual net income (i.e., gross annual income less  the allowances and certain deductions). Income tax rates in the UK are progressive in  nature.  

Social Security

The social security in the United Kingdom provides the following benefits –

The National Insurance Contributions (NIC) is responsible for providing insurance, state pensions, and other benefits. Contributions toward NIC are mandatory when –

  • The employee is 16 years of age or above
  • Salary is over £242 in a week

It is mandatory for the employer to enrol their employees and provide a National Insurance  Number before starting contributions. Employers must ensure employee contributions are  made towards Class 1 of pensions include –

An employee can make lesser contributions toward the NIC if an employee is –

  • A widow or a married woman with a 'certificate of election'  
  • Deferred contributions towards National Insurance' as the employee  has more than one job

The state pension age in the UK is 65 years.  

The employee contribution towards National Insurance (towards Class 1 insurance)  

include –

The employer contribution towards National Insurance (towards Class 1 insurance)  

include –

Statutory Benefits

Employers must provide certain statutory benefits to their employees as outlined by law –


Contributing towards pensions is mandatory for all employees and employers. Employers must auto-enrol their eligible employees and must contribute to an appropriate pension fund. The minimum contribution rates toward pension schemes are 8% of the qualified earnings of the employee. A minimum contribution of 3% must be contributed by the  employer.  

There is no limit on the amount that an individual can contribute to a registered pension  scheme.


National Health Service (NHS) is responsible for providing healthcare services for all  citizens and temporary residents in the UK. The NHS covers the following –

  • Consultation visits to a medical practitioner or a doctor, their diagnosis, medical  advice, and/or treatment
  • Hospital treatment for an injury or an illness
  • Emergency help from healthcare professionals that include ambulance services

Other statutory benefits in the UK include –

  • Holiday pay
  • Maternity and paternity pay: Employers in the UK often provide additional maternity  and paternity pay
  • Sick pay

Fringe Benefits

Fringe benefits are additional in-kind benefits that are provided to employees. These  benefits are non-monetary and are provided in addition to their salary. Commonly provided  fringe benefits in the UK include –

  • Workplace  
  • canteens
  • Gym subscriptions
  • Biking to work
  • Childcare vouchers
  • Season-ticket  
  • loans
  • Company cars

Exempt Benefits

Exempt benefits in the UK include –  

  • Reimbursement for business entertainment
  • Business travel expenses
  • Relocation expenses
  • Subsistence costs

Long-term Incentives

Long-term incentive plan is a type of employee benefit commonly provided to employees  for an extended time horizon (usually more than 12 months or 1 year).  

Commonly provided long-term incentives provided to employees in the UK include –

  1. Income protection and long-term disability GIP
  2. Critical illness insurance
  3. Employer-sponsored  retirement plans
  4. Life assurance
  5. Dental insurance
  6. Employee assistance programs and virtual GP services
  7. Private medical insurance
  8. Health cash plan

Senior employees and executives are also given employee stock options in the UK.  

Employee stock options that are commonly provided in the UK include –

  • Share incentive plan
  • Sharesave
  • Company share option plan
  • Employee shareholder shares

Termination/Severance in United Kingdom

Termination Process

The termination process depends on six fair rounds of dismissals:

  • Employee’s capability or qualification to do the work
  • Employee conduct
  • Employee retirement
  • Employee redundancy
  • Unable to continue work due to restriction or contravening statutory duty.
  • Any other substantial reason justifying dismissal

Notice Period

The notice period for UK employees varies on whether they are in their probationary status or not. For the former, the notice period will be up to 2 weeks while the latter is up to 4 weeks.

Severance Pay

Severance pay will be entitled if employed for 2 years or more. The employee will get;

  • If the employee is under 22, then half a week’s pay for each full year
  • If the employee is 22 but under 41, then one week’s pay for each full year
  • If the employee is 41 or above, then one and half week’s pay for each full year
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With our Employer of Record(EOR) network you don't need to set up entities to hire full-time talent abroad. We help you hire in 150+ countries and ensure 100% compliance with local laws.

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We take care of all the details to make sure you comply with local laws, including those related to taxes, social security, the minimum salary, termination regulations, and more.

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