Employer of Record (EOR) in
United Kingdom
Ready to hire in United Kingdom?
Hiring in United Kingdom opens the door to great talent, but only if you get compliance right. Learn the essentials of employment law, payroll taxes, termination rules, and more, and see how an Employer of Record (EOR) in United Kingdom can help you hire quickly without the legal risk.
Language(s)
Currency
Capital
London
Population
68.7 M
Public holidays
8-10 (varies by nation)
VAT
20%
Employment contract types in United Kingdom
Choosing the right employment contract in United Kingdom affects everything from probation periods to termination rights. Learn which contract types are available, when each one applies, and how an Employer of Record (EOR) in United Kingdom can make sure every agreement meets local requirements.
DEFAULT
Indefinite contract
The permanent (indefinite/open-ended) contract is the default and most common employment arrangement in the UK, with no fixed end date. Employees accrue statutory rights based on length of continuous service, including notice periods, redundancy pay eligibility, and (currently) unfair dismissal protection after 2 years' service.
REGULATED USE
Fixed-term contract
Fixed-term contracts are used for specific projects, seasonal work, or defined periods and are governed by the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, which give fixed-term employees the same rights as comparable permanent employees. An employee on successive fixed-term contracts for 4+ years of continuous service is generally deemed permanent unless the employer can objectively justify continued fixed-term status.
Employment basics in United Kingdom
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in United Kingdom to stay compliant from day one.
Under the Working Time Regulations 1998, average working time (including overtime) is capped at 48 hours per week, calculated over a 17-week reference period, unless the employee voluntarily opts out in writing. Workers are entitled to at least 11 consecutive hours of rest per day, one day off per week (or 2 days per fortnight), and a 20-minute break for shifts over 6 hours.
PROBATION PERIOD
3-6 months
UK law does not mandate a probationary period or set its length or maximum duration; it is a matter of contract, and employers commonly use 3-6 months (sometimes extendable). Certain 'day one' rights (e.g., SSP, paternity/parental leave notice, protection from automatically unfair dismissal grounds such as whistleblowing or pregnancy) apply regardless of probationary status. Ordinary unfair dismissal protection currently requires 2 years' continuous service (falling to 6 months from 1 January 2027 under the Employment Rights Act 2025), so employers generally have more flexibility to dismiss during probation for non-discriminatory reasons.
13TH / 14TH SALARY
Not Required
There is no statutory requirement for a 13th or 14th month salary in the UK. Some employers pay a discretionary Christmas bonus or performance bonus, but this is a matter of company policy or contract, not law.
JOB TITLE REGULATIONS
Regulated
The UK does not generally regulate job titles by statute. However, certain professional titles are legally protected and require registration with a professional body to use (e.g., 'Solicitor', 'Doctor', 'Registered Nurse', 'Chartered Accountant', 'Chartered Engineer'). Outside these regulated professions, employers have discretion to define job titles.
Taxes & employment costs in United Kingdom
The true cost of hiring in United Kingdom goes well beyond salary. Learn how payroll taxes, employer social security contributions, and mandatory benefits add up.
Employers pay Class 1 secondary National Insurance Contributions at 15% on employee earnings above the Secondary Threshold (GBP 5,000/year, approx. GBP 417/month, effective since April 2025). Eligible smaller employers can claim the Employment Allowance (up to GBP 10,500/year) to offset this. Employers must also contribute a minimum of 3% of qualifying earnings to a workplace pension under auto-enrolment, and employers with an annual pay bill over GBP 3 million pay a 0.5% Apprenticeship Levy. This figure excludes pension and levy amounts, reflecting only the standard employer NI rate.
Employees pay Class 1 primary National Insurance Contributions at 8% on earnings between the Primary Threshold (GBP 242/week, ~GBP 12,570/year) and the Upper Earnings Limit (GBP 967/week, ~GBP 50,270/year), and 2% on earnings above the Upper Earnings Limit. Employees also contribute a minimum of 5% of qualifying earnings to a workplace pension under auto-enrolment (combined with the employer's 3%, for a minimum total of 8%). Income Tax (20%/40%/45% bands) is deducted separately via PAYE and is not included in this figure.
Tax rates, thresholds, and social security contribution requirements in the UK are subject to change via annual Budget announcements and are updated each April. Rates can vary based on individual circumstances, income level, and sector. This information is provided for general guidance only and does not constitute tax or legal advice; employers and employees should consult HMRC guidance or a qualified UK tax advisor for current, personalized figures.
Employer of Record cost calculator
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Calculate your EOR costsLeave entitlements in United Kingdom
Here’s what you need to know about leave entitlements in United Kingdom, including annual leave, public holidays, sick leave, parental leave, and more. Many companies choose to work with an Employer of Record in United Kingdom to stay compliant from day one.
Type
Duration
Pay During Leave
Maternity leave
90% (first 6 wks), then capped flat rate (33 wks); final 13 wks unpaid
Paternity leave
Capped flat rate or 90%, whichever is lower
Sick leave (days 1-3)
80% capped at £123.25/wk (SSP, from day 1)
80% capped at £123.25/wk (SSP, unchanged)
80% capped at £123.25/wk (SSP) to 28-wk max; enhanced contractual pay common
Up to 52 weeks (39 weeks paid), available as a day-one right; pay mirrors Statutory Maternity Pay structure
Adoption Leave
Up to 50 weeks of leave / 37 weeks of pay, shareable between both parents after the first 2 weeks following birth or adoption, at the statutory rate (lower of GBP 194.32/week or 90% of average earnings)
Shared Parental Leave
2 weeks for parents who lose a child under 18 or experience a stillbirth after 24 weeks of pregnancy; a day-one right to leave; paid at the statutory rate if 26 weeks' service is met, otherwise unpaid
Parental Bereavement Leave
Up to 18 weeks per child (maximum 4 weeks per year), unpaid, usable until the child's 18th birthday; became a day-one right from 6 April 2026 (previously required 1 year's service)
Unpaid Parental Leave
Benefits in United Kingdom
When hiring in United Kingdom, employers must provide statutory benefits required my local laws. An Employer of Record in United Kingdom can help you stay compliant and offer a competitive package.
Statutory Benefits
In addition to statutory leave, employees are entitled to the following statutory benefits:
The UK's social security system is funded through National Insurance Contributions (NICs), collected via PAYE payroll:
- Employer (Class 1 secondary): 15% on earnings above the Secondary Threshold (GBP 5,000/year)
- Employee (Class 1 primary): 8% on earnings between the Primary Threshold (GBP 12,570/year) and Upper Earnings Limit (GBP 50,270/year), and 2% above that limit
- Both employer and employee also make minimum workplace pension contributions (3% and 5% respectively) under auto-enrolment
- NICs fund the State Pension, contributory benefits (e.g., Statutory Sick Pay, Jobseeker's Allowance), and the NHS
WORKPLACE INJURY PROTECTION
The UK does not operate a separate statutory 'workers' compensation' insurance scheme. Instead:
- Employers are legally required to carry Employers' Liability Insurance (minimum GBP 5 million cover) to cover claims from employees injured or made ill through work
- Employees injured at work or who develop an industrial disease may also claim state Industrial Injuries Disablement Benefit, independent of fault
- Employees unable to work due to injury/illness are also entitled to Statutory Sick Pay and may bring a personal injury/negligence claim against the employer where fault is established
Statutory Redundancy Pay applies to employees with 2+ years of continuous service who are dismissed by reason of redundancy:
- Under age 22: 0.5 week's pay per full year of service
- Age 22-40: 1 week's pay per full year of service
- Age 41 and over: 1.5 weeks' pay per full year of service
- Capped at a maximum of 20 years of service
- Weekly pay is capped at a statutory maximum (GBP 751/week in England, Scotland & Wales; GBP 783/week in Northern Ireland, 2026/27 rates), giving a maximum statutory redundancy payment of GBP 22,530 (GBP 23,490 in NI)
- Employers may offer enhanced (contractual) redundancy pay above the statutory minimum
There is no statutory 13th or 14th month salary requirement in the United Kingdom.
- Any Christmas bonus or additional payment is entirely discretionary and governed by company policy or individual employment contract
- Salaries are typically paid in 12 equal monthly installments with no mandated extra payment
Termination & notice in United Kingdom
Ending an employment relationship in United Kingdom requires careful planning to avoid disputes and unexpected costs. Learn the rules for notice periods, valid grounds for dismissal, and more.
Unfair dismissal
As of August 2026, employees generally need 2 years of continuous service to bring an ordinary unfair dismissal claim (certain 'automatically unfair' reasons — e.g., pregnancy, whistleblowing, asserting a statutory right, trade union membership — apply from day one regardless of service length). Under the Employment Rights Act 2025, the qualifying period is scheduled to reduce to 6 months (not day one, as originally proposed) effective 1 January 2027, alongside removal of the cap on unfair dismissal compensation. Employers must have a fair reason for dismissal and follow a fair process, generally guided by the ACAS Code of Practice on Disciplinary and Grievance Procedures.
Objective / fair dismissal
A dismissal is potentially fair only if based on one of five statutory reasons: (1) capability or qualifications, (2) conduct, (3) redundancy, (4) statutory illegality (continued employment would breach the law), or (5) 'some other substantial reason' (SOSR). Even where a fair reason exists, the employer must follow a fair procedure (investigation, warnings where appropriate, the right to be accompanied, and a right of appeal), consistent with the ACAS Code of Practice, or risk an unfair dismissal finding even if the underlying reason was valid.
During probation
No special statutory regime; the same statutory minimum notice (typically 1 week past the first month) generally applies, though many contracts specify shorter notice during probation. Because unfair dismissal protection currently requires 2 years' service (falling to 6 months from 1 January 2027), employers have considerably more flexibility to dismiss without showing one of the five fair reasons.
After probation
Once an employee has completed probation and accrued sufficient continuous service, full statutory notice periods apply based on length of service (1 week per year up to 12 weeks), and — once the qualifying period for unfair dismissal is met (currently 2 years, reducing to 6 months from 1 January 2027) — the employer must have a fair reason for dismissal and follow a fair procedure, or the dismissal may be found unfair at an Employment Tribunal.
Notice periods and dismissal rules described here reflect statutory minimums under UK employment law as of August 2026, which are subject to change — particularly given the phased implementation of the Employment Rights Act 2025 through 2027. Individual employment contracts may specify longer notice periods than the statutory minimum. Employers should seek current legal advice before making termination decisions, especially during this transitional period of reform.
Related compliance info about United Kingdom
Staying compliant in United Kingdom is an ongoing responsibility, not a one-time task. Learn the key requirements around work permits, employee data protection, record-keeping, worker classification, and see how an Employer of Record in United Kingdom can take on that responsibility so you can focus on growing your team.
Content last reviewed Nov 2026. Employment laws change fast, always verify critical hiring decisions, and talk to our team of international experts.
