Hire employees in the United Kingdom
With Nomad Global Hire PEO / EoR (Employer of Record) services, you can easily hire employees in the UK, without having to set up your own entity. No risk and fully compliant with HR support included
What to know about the UK
The UK is home to Investors, Startups and highly qualified Talent
Employer Tax
Estimated at 15%
Currency
GBP, British Pound Sterling
Available Employee Benefits
Medical insurance, Dental insurance, Cycle to Work
Employee Tax
Incremental up to 45%
Payroll Frequency
Monthly over 12 payments
Main Universities
University of Oxford, University of Cambridge, Imperial College London
Capital
London
Population
Circa 67 Millions
Available Contracts
Fixed Term Contract, Indefinite/Permanent, BtoB
The UK has one of the most diverse, highly qualified and talented population of workers in the world. Numerous investors, startups and large corporations have headquartered their business in London in particular, with other strong talent pools in Manchester, Birmingham, Oxford or Cambridge. Not only a fantastic tourism destination as well and home to some of the greatest music bands and football players in the world, the UK remains a leading startup nation in Europe. Brexit has complicated the recruitment of European talent in the country although there is still a large reservoir of Tech, Digital, Sales, HR and Marketing talent in particular. You can recruit directly or partner with local recruitment agencies (we can help find the right one), and NOMAD will manage the local employment for your new employees
Payroll, Benefits & Tax in the UK
- Average salary in the UK is 2,480 GBP per month
- Tax rates in the UK are reviewed every year and may change from April as the UK tax period is April to March
- Employer Tax in the UK is up to 15.05%
- This includes the national Insurance contribution
- Please note that workplace pension in the UK is compulsory, and employers must enroll their employees in a pension scheme and make contributions towards their pension fund, the minimum is usually 3%
- Employee Tax in the UK is incremental up to 45%:
- There is a Tax-free amount set at £12,500
- Income Tax is at a flat rate of 20% for the income between £12,501 and £50,000 of annual income
- Income Tax is at a flat rate of 40% for the income between £50,001 and £150,000 of annual income
- Income Tax then steps to 45% for the income in excess of $150,001
- Overtime payment in the UK is not mandatory if covered by the contract, however employees are not allowed to work more than 48 hours per week
- Payroll Frequency in the UK is Monthly over 12 months although i some industries, weekly payments are still common practice
- Maternity Leave in the United Kingdom is up to 52 paid weeks or 1 year. At least 2 weeks have to be taken before the birth. Not all salary payments are covered, and after the first 6 weeks post the child birth, the mother will be paid the statutory maternity leave payment which stands at £156 a week. Employers often offer their own benefit on this to support mothers.
- Paternity Leave is 15 days or 2 weeks and can be taken any time until the child turns 2 years old. The salary during those 2 weeks will also paid at the statutory rate of £156. The system is not very generous so companies tend to put in place their own process.
- Shared Parental Leave is up to 50 weeks in the UK. Only 37 weeks of those would be paid and at the Statutory amount .
- Sick Leave is covered for up to 28 days. The employee will normally not be paid during the first days then receive a statutory pay of about £100 a week. Most employers have their own sick leave policy.
- Statutory Leave is 20 days minimum per year up
- Bank holidays: there are usually 8 national days in the UK, but in 2023 there will be 9 days due to the Coronation of King Charles III on May the 8th.
- Termination can only be done for a valid cause in the UK, see below
- Notice period is usually contractual
The British Labor Code is setting the framework for employment in the United Kingdom. This covers all individual and collective working relationships, Compensation and Benefits, Workers rights as well as Leave (Sick, Parental), employment Termination and Discrimination.
Onboarding and Termination in the United Kingdom
- Probation period are not mandatory under British Labour Law
- Probation period in the United Kingdom however can be of a maximum of 6 months. Probationary periods can be extended as long as the total period does not exceed 6 months. It is recommended at 1 month for individual contributor roles, and 3 months for senior or managerial positions.
- You can hire through Fixed Term Contracts, Indefinite / Permanent contract or BtoB contracts, although new regulations like IR35 can make hiring contractors more complex.
- Employment Contracts must be drafted in English and include Place of work, Name, Job Description, start Date, Notice period and termination details, and compensation.
- Termination is the United Kingdom is generally a complicated process and requires particular care. In order to be compliant, Termination can occur as such:
- By mutual agreement
- By resignation of the employee
- By expiration of contract
- By the employer on grounds of disciplinary dismissal, failure to perform in probation period, reduction of work or end of the activity (Redundancy).
- It is always advised to reach a Mutual Agreement to validate a Termination in the United Kingdom, especially if the employee has been in the business for more than 2 years.
- The minimum notice period in the UK is 1 week, but ultimately it is based on what the employment contract says. Usually UK companies have a one month notice for individual contributors and 3 months for senior or managerial roles.
- Severance payments in the UK are mandatory and are very strictly calculated depending on the length of service. The UK Law is covering statutory severance payments and processes have to be followed and respected or the employer could face legal issues in UK courts.
Fixed Management Fee
We charge a fixed monthly fee depending on the level of the salary of the hired employee
- Local Contract Management
- Payroll Management
- Tax and Compliance
- HR Support
Employee Nomad set up fee
Everything to get you started on Nomad and ensure piece of mind for you and your new hire
- Sign up to the NOMAD Services
- Benefits Setup (if available)
- Tax authority liaisons
- An additional Deposit of 1 full month salary cost will be required
Estimated Employer tax costs
Employer Tax in the UK is estimated around 15% (may vary depending on circumstances)
- Workplace Pension
- National Insurance Contributions
- Others
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