How to hire and pay EMPLOYEES IN

The United Kingdom

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Before hiring

EMPLOYEES IN
The United Kingdom

Before hiring employees in the United Kingdom, one key thing employers should be aware of is the importance of EU data protection. Your legal requirement to keep employees’ personal data secure impacts how employment information is transferred to and from other countries, so make sure you’re informed before making a cross-border hire.

Another thing to be aware of as an employer is when to offer benefits packages like health insurance and pension in the UK. This will help you stay competitive in the market, but it’s not as cut and dry as it is in other countries.

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in the United Kingdom below.

At a Glance

CURRENCY

GBP

OFFICIAL LANGUAGE

ENGLISH

PAYROLL FREQUENCY

MONTHLY

PUBLIC HOLIDAYS

8

(based on region;
see here
)

EMPLOYER TAXES

16.80%+

of gross salary

13th / 14th SALARY

N/A

Good to know

  • Employees in the United Kingdom only need to provide one week of notice, no matter how long they’ve been employed. An employer, however, must provide one week's notice for up to two years of an employee’s service, and then one more week for every additional year of service.
  • Universal free-access to healthcare is provided by the National Health Service (NHS). Private healthcare exists, but most employers do not provide it. The main benefit of private healthcare is to provide faster access to non-emergency care.
  • Workers are not generally permitted to work more than 48 hours per week. However, workers can opt out of this limit in their contract known as the 'working time directive'.

Employment in

The United Kingdom

Working hours and overtime

Employees in the UK are not generally permitted to work more than 48 hours per week, but they can opt out of this limit in their contract.

Employment contracts

Employment contracts should be written in English.

Probationary period

There is no law in the United Kingdom determining the length of a probationary period. However, it’s common for a probationary period to last no longer than six months. The probationary period may sometimes be extended, but this should be mentioned in the employment contract. 

Pensions
Notice period

For employment length that is greater one month but less than two years, an employer must provide one week’s notice. For every year of employment after that (up to 12 years), an extra week of notice is required.

An employee in the United Kingdom must only give one week of notice for the full length of their employment.

Employers and employees can agree longer notice periods in their Employment Agreements. Employers in the UK typically provide one to three month notice periods.

Employment cost calculator

Holidays

01 Jan

New Year's Day

25 Dec

Christmas Day

2 Apr

Good Friday

26 Dec

Boxing Day

03 May

May Day

27 Dec

Christmas Holiday

31 May

Late May Bank Holiday

28 Dec

Boxing Day Holiday

01 Jan

New Year's Day

2 Apr

Good Friday

03 May

May Day

31 May

Late May Bank Holiday

25 Dec

Christmas Day

26 Dec

Boxing Day

27 Dec

Christmas Holiday

28 Dec

Boxing Day Holiday

Employer tax

Employers are required to contribute a total of 16.80% in taxes on top of an employee’s salary. National insurance contributions are 13.80% and a minimum of 3% goes to a pension fund. 

Individual tax

Employees in the UK are taxed 0% to 45% depending on their income bracket. Employees also have to contribute a minimum of 5% of their salary to a pension fund. 

Termination of employment

Employees in the UK who are terminated after over one month's service are entitled to receive the above statutory minimum notice period. An employee may be dismissed without any notice period if they commit a serious breach of their employment contract (for example, gross misconduct).

Any employee who has been employed for greater than two years has a right to not be unfairly dismissed. It’s not considered unfair dismissal if the employee was dismissed for: conduct, capability, redundancy, or breach of statutory restrictions, and if the employer can show they acted reasonably in following a fair process (ACAS provides guidance on this).

An employee in the UK can also claim unfair dismissal if dismissed based on protected characteristics such as gender, race, religion, sexuality, political belief, union membership, taking parental leave, etc. If an employee is found to be unfairly dismissed, there is a possible compensatory award capped at one year's salary or £88,519 (whichever is lower).

Any employee who has been continuously employed for over two years is entitled to a statutory redundancy payment (SRP) if he or she is dismissed on grounds of redundancy. SRP is calculated in accordance with a statutory formula based on the employee's age, salary and length of service.

Start hiring employees in

The United Kingdom

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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