A competitive salary is vital in dynamic labor markets where companies strive to attract and retain the best talent. However, a well-rounded benefits package that goes beyond the numbers on a paycheck is a game changer.
Employee benefits can significantly impact your business success in any country, including in the United Kingdom. For example, a good benefits package can improve workplace morale, boost productivity, and reduce staff turnover.
Unfortunately, only 40% of U.K. employees are happy with their benefits, according to a CIPD survey. So, which U.K. employee benefits make for a good benefits package? What will make a real difference for your business and satisfy your team? And what’s required by law? Let’s find out.
Key takeaways:
- U.K. law mandates several benefits for eligible workers, including minimum wage, statutory sick pay, holiday leave, and pension contributions.
- A strong employee benefits package in the U.K. can significantly boost morale, productivity, and retention, offering more value than salary alone.
- Despite access to the NHS, many U.K. employers enhance health coverage with private medical, dental, and vision insurance, along with wellness programs.
Who Is Entitled to Benefits in the U.K.?
U.K. citizens’ benefits are determined by their employment status under U.K. law, which includes workers, employees, employee shareholders, contractors, directors, and office holders.
All employees are entitled to the national minimum wage, but not all workers are guaranteed benefits like statutory sick pay and maternity leave.
Do Independent Contractors Receive Benefits?
Contractors are eligible for benefits if they meet certain qualifying conditions.
For example, here’s who’s entitled to statutory sick pay based on employment status and other qualifiers.
Read more: The Complete Guide to U.K. Labor Laws
Mandatory Benefits in the U.K.
Minimum Wage and Overtime Pay
In the U.K., a worker’s minimum wage depends on their age and if they’re an apprentice. You can view the minimum wage rates as of April 2025 here.
Employers aren’t required to pay overtime; however, the average pay for the total hours worked must not fall below the national minimum wage.
Pension
Employers are required to provide a pension scheme to all employees who:
- Are classed as workers
- Are between 22 years old and the state pension age
- Earn GBP 10,000 or more per year
This is referred to as automatic enrollment, and as an employer, you must contribute at least 3% of the employee's earnings. Employees can also add money to their pension, typically under a salary sacrifice scheme.
Pensions are an increasingly important employee benefit in the U.K., where more than 30% of working adults are concerned about their financial health.
Employers who don't offer their employees a statutory pension plan may face a penalty from the U.K. government based on the number of employees not provided this benefit.
Healthcare
There is no statutory requirement to provide healthcare benefits to employees in the U.K. since they receive healthcare managed by the National Health Service, which is funded through taxes.
However, many U.K. employers provide additional health insurance, which we’ll look at in more detail later.
Sick Pay
Statutory sick pay is the minimum amount an employer can pay if an employee cannot work due to illness. As of 2025, this is set at GBP 116.75 per week and is paid for up to 28 weeks.
Employees must provide a medical certificate as proof of illness.
Holiday Pay
U.K. employees are entitled to statutory paid holiday. This means that employers are legally required to provide their employees with paid time off, which is set at 5.6 weeks per year, or 28 days.
Employers aren’t permitted to require employees to work on statutory paid holidays. If an employee does work during their time off, they are entitled to be paid for the time worked.
Paid Maternity and Paternity Leave
U.K. labor law requires employers to provide eligible employees with statutory maternity and paternity leave. In most cases, this is someone who has worked for an employer for at least 26 weeks.
Employees who qualify for maternity leave can take up to 52 weeks off, with the first 39 weeks paid at the following rates:
- First six weeks: 90% of average weekly earnings before tax
- Remaining 33 weeks: GBP 184.03 or 90% of average weekly earnings (whichever is lower)
Those eligible for paternity leave receive either one or two weeks with pay set at GBP 184.03 per week.
The same paid maternity and paternity leave is required in the event of adoption, and employees are still eligible for paid leave if the baby is stillborn or dies after birth.
Learn more about maternity leave around the world.
Supplemental Benefits Frequently Offered In the U.K.
Additional Health and Wellness Benefits
Healthcare benefits are popular among employees because they provide access to perks like specialists and private hospital rooms. If you have employees in the U.K., you can offer a variety of healthcare benefits, including:
- Private medical insurance: Gives employees access to private healthcare providers, such as private hospitals and clinics with shorter wait times. More elective procedures may also be covered by this insurance.
- Dental insurance: This assists with dental care costs, such as checkups, cleanings, and fillings.
- Vision insurance: Employees can use this insurance to cover the cost of vision care, including eye exams and glasses.
- Health savings accounts (HSAs): Employees can set aside money on a pre-tax basis to pay for qualified medical expenses.
- Flexible spending accounts (FSAs): These allow employees to set aside money for qualified dependent care expenses on a pre-tax basis.
- Employee assistance programs (EAPs): The programs give employees access to confidential counseling and support services.
- Wellness programs: These offerings, such as gym memberships, offer employees resources and support to help them live healthier lives.
Additional Sick Pay
The amount of supplemental sick pay is often determined by several factors, including the employer’s sick pay policy and the employee’s:
- Length of service
- Earnings
- Contract of employment
However, it’s not uncommon for employers to offer employees 100% of their salary during sick leave. In addition to statutory and additional sick pay, employers may provide their employees with other illness-related benefits such as:
- Paid time off for doctor's appointments
- Flexible working arrangements
- Employee assistance programs
- On-site healthcare
Life Insurance
U.K. employers commonly offer this, and it may be expected by many workers, even if they're working for a global employer.
Additional Retirement Benefits
While employers must contribute 3% to employees’ pension funds, they can choose to match employees’ contributions up to 5%.
Providing the Best U.K. Employee Benefits
Offering the right benefits to employees in the U.K. can give you a competitive edge and help you recruit the best talent. However, setting up and maintaining these benefits can get complicated, especially if you also have to deal with benefits for team members in other countries.
An Employer of Record (EOR) like RemoFirst can do the heavy lifting for you by helping to provide the right benefits to your global team, allowing you to focus on growing your business.
With RemoFirst, you can employ workers in 185+ countries, including the U.K., and offer everything from financial benefits and equipment provisioning to personalized, private healthcare insurance — including localized plans through RemoHealth Local.
Book a demo to learn more about how we can help you hire in the U.K. and beyond.
.png)
.png)
