Employer of Record (EOR) in United Kingdom - Employment Laws, Payroll, Hiring - PEO United Kingdom

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Global Employer of Record Guide / United Kingdom
Employer of Record in the
United Kingdom
Employer of Record in the UK
EOR in The Skuad's United Kingdom’s Employer of Record

$499
United
$249
(EOR) is a comprehensive solution to hiring a
Kingdom
local workforce in the UK without investing in a
UK entity. Every country has its own set of
https://www.skuad.io/employer-of-record/united-kingdom#:~:text=in the UK-,Employer of Record in the UK,from that of other nations. 1/28
corporate laws that are different from that of

Start Hiring Now other nations. It is a complex landscape,
especially for small-and-medium-scale
companies that wish to expand globally. Setting
Table of Content
up offices in a foreign country like the UK and
Employer of Record in the UK navigating through the administrative and legal
The UK at a Glance formalities of the country can be a complicated
Employment in the UK process. With the support of a par-excellence hi-
Employment Laws in the UK
tech Employer of Record UK solution like that of
Contractors vs. Full-Time
Skuad's, the process can be much easier.
Employees
With the aid of an automated and hi-tech

Hiring in the UK
solution, Skuad gives you access to multiple

resources online that help your business entity
Probation & Termination
to recruit remote workers and handle complex

EOR Solution in the UK
legal compliances and administrative tasks

Types Of Visas in the UK
Work Permits
related to payroll, visa processing, and more.
Book a Demo to know more about the
advantages of having Skuad as your EOR in the
UK.
The UK at a Glance
Population: 67.96 million (2024 estimate)

Currency: Pound Sterling (£)
Capital City: London
Languages spoken: English
GDP: USD 3.070 Trillion (estimated growth by
0.7% in 2024)
One platform to grow your
global team
Hire and pay talent globally, the hassle -free
way with Skuad
Talk to an expert
Employment in the UK
Being one of the major globalized economies in

the world, the UK is one of the most appealing
nations for those looking to expand their
businesses globally. What works favorably for
the UK is that there is no language barrier,
English being the most commonly spoken
language here. Additionally, the country has a
commendable standard of living, ranks fifth in
total goods imported globally and tenth in total
goods exported. However, there are certain
barriers in the hiring process, such as those
brought about by Brexit, which could be
demotivating, especially to small and medium
businesses and startup companies.
For most companies looking to hire employees
in the UK, crucial time is lost in sourcing the
right people. Typical recruitment processes like
interviewing, onboarding, acquiring permits,
visa approvals, etc., can consume a lot of time,
especially for business entities that are not fully

aware of the UK Labor laws. A smart solution is
to use the services of an Employer Of Record
UK. An EOR based in the UK helps eliminate
outsourcing-related barriers by taking over end-
to-end employment-related processes, including
payroll, taxation, visa, benefits, leaves, etc.
As per the United Kingdom Labour law,

it is mandatory to have a detailed
United contract of employment. The contract
Kingdom should mention every facet regarding
Labour law the employment terms, including
compensation, working hours, salaries,
wages, etc.
A maximum of 40 hours over 5 days

with the flexibility to distribute the
Statutory hours across the weekdays, Monday to
Working hours Friday. However, employees can choose
to work beyond these limitations
voluntarily.
Overtime Employees can work overtime only if

Eligibility their contract permits. By law, no one
can be forced to work more than 48
hours averaged over 17 weeks.
Overtime is usually not paid for by
employers until mentioned otherwise
in the contract, provided the employee's
average pay is not below the National
Minimum Wage. However, employees
can be entitled to 'Time off in lieu' of
overtime work; this should be

mentioned in the contract.
There are eight public holidays in the

UK:
Good Friday
Easter Monday
Spring Bank Holiday
Early May Bank Holiday
Summer Bank Holiday
Paid Public
Christmas
Holidays
Boxing Day
New Year's Day
However, employers are not obliged to
give these days off. Employers may
choose not to include bank holidays as
part of paid leaves or holidays or
include these in the statutory annual
leave package. It means that employees
are not eligible for extra pay if they
work on these eight public holidays.
Leaves
Sick Leave As per the
statutory
requirements,
employees
earning a
minimum of
£120 per week
are eligible
for Statutory
Sick Pay
(SSP). Legally,
these
employees
are entitled to
£96.35 per
week if they
cannot work
consecutively
for more than
four days a
week. The
SSP is valid
for up to 28
weeks.
Employers
can extend
Sick Pay as
contractual or
occupational
pay, but they
cannot
reduce the
sick pay. Also,
employees
are not
required to
contribute
towards the
payments of
sick leaves.
Maternity Leave The statutory

leave period
is 52 weeks
consisting of
ordinary
maternity
leave of 26
weeks and
additional
maternity
leave of
another 26
weeks. While
it is not
mandatory
for the entire
52 weeks,
new mothers
need to take
two weeks'
leave after the
baby's birth.
In the case of
women
employees
working in a
factory, it is
mandatory to
take four
weeks off
after delivery.
Fathers are
eligible to
take up to 2
weeks of
paternity
Paternity Leave
leave,
provided the
leaves are
taken in one
go.
Full-time
employees in
the UK are
eligible for
5.6 weeks or
28 days' paid
holiday
annually. This
is called
annual leave
or statutory
leave
entitlement.
Part-time
employees
have the same
Holiday entitlement
Entitlement/Annual of 5.6 weeks
Leaves of paid
holidays, but
the number
of days is less
than 28. Of
the 28 days,
only eight
days can be
carried over
to the
subsequent
year. At the
end of
flexible work,
the accrued
unused leaves
are paid out.
The minimum wage is between £6.56 to

£8.91 on an hourly basis. The wage is
dependent on the employee's age.
Besides this, the Living Wage
Foundation, UK has determined a
better living wage for employees, and
most employers in the UK follow the
same, even though it is not mandatory.
Compensation
Bonus is not a mandatory part of the UK
& Bonus
salary system and is completely at the
employer's discretion. Some industrial
segments like engineering, R&D,
science, public service, media, and
technology are awarded bonus
payments. Certain roles like directors,
senior managers, etc., are also likely to
get bonuses.
The National Insurance Contributions

(NICs) are a form of tax collected to
fund employee health benefits in the
UK. The contribution comes from
employees' salaries and employers’
Employee contributions. Employers can provide
Health additional health benefits to their
Coverage employees in addition to the federal
program. Skuad's Employer Of Record
UK solution helps business entities
offer their employees supplementary
health benefits at substantially
economical rates.
Employee This law offers protection from

Protection and discrimination at work from
Anti- recruitment, dismissal, pay, benefits,
training, redundancy, promotions and
discrimination transfers, and employment terms and

Rights conditions. This law protects employees
from discrimination based on marital
status, age, gender reassignment,
pregnancy, disability, race, color,
nationality, ethnicity, origin, religion,
sex, belief, and sexual orientation.
Personal Information in the UK is

protected by the Data Protection Act
2018. This Act implements the
guidelines of the General Data
Protection Regulations (GDPR) in the
UK. Six data protection principles
govern how personal data will be used
Confidentiality
lawfully and fairly. Further, the
of Personal
principles state that the data will be
Information
used for an explicit purpose in a
relevant manner, with accuracy. Only
updated data should be used and
removed when no longer required.
Organizations are obliged to handle
data securely so that data is protected
from unauthorized access and harm.
Employment Laws in the UK
Employment Rights Mentions the rights of employees

Act 1996 related to dismissal and leaves.
Mentions the minimum wages

National Minimum
and is reviewed by the
Wages Act 1998
government periodically.
Employment Establishes recognition of Trade

Relations Act 1999 Unions
Maternity and
States maternity and paternity
Parental Leaves etc.
related leaves
Regulations 1999
Part-time employees
(Prevention of Less UK employers need to treat their
Favourable part-time employees comparably
Treatment) with full-timers.
Regulations 2000
Discusses discrimination at the

The Equality Act
workplace and during
2010
recruitment.
It is tax legislation that helps

individuals save taxes by working
as disguised employees. These
IR35
work and act like employees but
are on the payroll of limited
companies.
Why immerse yourself in understanding the

nitty-gritty of the UK labor law, when Skuad can
do it for you? Talk to us.
Contractors vs. Full-Time Employees
Here is the difference between a contractor and

a full-time employee. An employee works with
an employer under an employment contract in
the UK. Employers are responsible for working
out the status of the worker as per taxation laws
and employment laws.
Full-time employees are entitled to Statutory
Sick Pay, statutory maternity and paternity
leaves, minimum notice periods, legal
protection from unfair dismissal, Statutory
Redundancy Pay, time-off for emergencies, and
flexible work requests. These benefits are
extended only to employees who meet the
continuous employment criteria as per the
employment contract in the UK.
Employees need to fulfill certain statutory hours
of work and need to be paid on time. Also, such
people cannot send in another worker to replace
themselves. The employment agreement in the
UK mentions all these details in length.
A contractor in the UK, on the other hand, can
be self-employed or an employee or a worker of
an agency and working for a client. Contractors
work on a project-to-project basis, have their
entity, pay their taxes, work for multiple clients
simultaneously, and are not part of the payroll.
It is wise to hire full-time employees when it is a
long-term role and want your workers to be
committed to the vision and mission of the

company. Consider hiring contractors for
seasonal or short-term roles where the worker is
not involved in the core business areas. If the
role requires regular monitoring, supervision
and regular reports, it is best to hire an
employee.
Either way, compliance with the statutory laws is
essential, and the right classification of workers
to avoid penalties. Learn more about how Skuad
can help you achieve compliance.
Hiring in the UK
To hire employees in the UK, the traditional

route for global companies is to set up their
branch offices or subsidiaries in the UK first.
However, it can be time-consuming for the
process to complete delaying your global plans
substantially. Also, it could increase your costs
significantly. Another way is to use job search
portals or online hiring companies in the UK
like Indeed, Reed, Monster, Glassdoor, CV-
Library, WikiJob, Adzuna, LinkedIn, and more.
While most of these sites have gained credibility
in the past several years because of the quality of
talent companies can hire online, there are
cons. The entire hiring and onboarding process
has to be handled by you or your HR
department. If you are not well-versed with the
employment laws and compliances in the UK, it

could be a big problem. Additionally, you lose
crucial time during the process.
Another fast becoming popular route is to use an
Employer of Record UK solution, like Skuad. Our
futuristic solution enables hiring full-time
employees and contractors on your behalf and
assigning them to work as per their employment
contract in the UK. Skuad's progressive tech
platform helps organizations hire both types of
workers with ease and simplicity. You can also
make informed decisions regarding making
employment offers to full-time employees and
contractors with Skuad's resources. Learn more
on how you can leverage the expertise of Skuad
for your hiring needs in the UK.
Probation & Termination
Probationary Period in the UK
The UK's standard probation period is three

months from joining, especially if it is an
internal move. However, the general
probationary period is six months from the date
of joining. Please note that probation in the UK
does not come under statutory law.
Termination of employment in the UK
Termination or dismissal is when the employer

terminates or ends the employment contract. In
case of termination, the employer needs to give

the employee the statutory notice period or, as
mentioned in the contract, whichever is more.
However, there are circumstances when the
employee can be terminated immediately. As
per the law, employers must give the reason for
dismissal within 14 days of asking you to leave,
and the reason behind it.
Skuad’s expertise and its robust global
employment platform will help you achieve all
goals for your global expansion. To know more
about the EOR services of Skuad, click here.
EOR Solution in the UK
The Employers of Record (EOR) model is a smart

solution for companies seeking to enter and
expand in the United Kingdom fast and agilely.
With the help of Skuad's Employer of Record
service, business entities abroad can quickly
source and hire the right professionals as per
the organization's requirements. Hired
employees get onboard seamlessly, helping your
business save up to 85% of hiring and
onboarding costs. End-to-end solutions help
manage employment contracts, process payroll
and income tax, blend statutory benefits, and
manage overall administration of the backend
HR processes. Our platform works as a unified
employment platform with automated
workflows, digital signatures, employee payroll,

contractor payout, and all types of compliance
solutions.
General Employer of Record Service Terms:
Taxes that apply to invoices for a UK business
is 7% GST while it is zero GST for a foreign
company
The minimum duration of service is three
months
The currency accepted is British Pound
Sterling.
The required details & documents for UK
citizens include personal information, a copy
of passport, bank details, copy of NRIC (for
permanent residents), job description.
For foreigners, the required documents
include personal information, job
description, educational qualifications,
technical qualifications, CV, a copy of
passport, a copy of ID, bank details,
photographs, police verification, medical
exam results.
Outsourcing employment through an EOR
When your organization decides to expand its

business into the United Kingdom, it is prudent
to analyze the various options to do so and to
make a decision on which route to take. Building
a subsidiary from the ground up, while

managing all tasks from finding talent to hiring
and managing payroll can be an extremely
cumbersome and difficult process. This is where
outsourcing employment through an EOR can
come in handy. An EOR will not only manage
hiring or payroll, but the entire employee
lifecycle. Skuad can assist you with the same and
provide remote services allowing you to focus on
your core business activities while our unified
platform takes care of the entire lifecycle of
every employee - from hire to fire.
Feel free to connect with us, to learn more.
Types Of Visas in the UK
Having the right employees in your organization

is a critical factor in the growth of your business,
especially when expanding your business in the
UK. You can choose between having your in-
house team relocate to the UK or trust a credible
Employer Of Record UK to handle the visa
process on your behalf.
The UK work visa is based on the Points Based
System (PBS). There are five tiers of work visas,
and applicants need to apply for one of the tiers.
Each tier is associated with specific
entitlements, conditions, and entry
requirements. The types of work visas in the UK
are as follows:
Tier For highly skilled employees, investors, and

1 entrepreneurs outside the EU and EEA.
Tier For skilled employees from outside the EEA.

2 Professional sportspeople also fall in this tier.
Tier For low-skilled employees usually looking for

3 temporary work outside the EU.
Tier For students aged 16 years and above from

4 outside the EEA.
Tier
For temporary employees, and has six sub-tiers.
5
Work visa requirements in the UK
Requirements differ based on the tier type.

Work visas in the UK need to be sponsored
by a sponsor or an employer.
The general requirement includes an
application form, two colored photos, valid
passport, accommodation proof, financial
proof, test results of TB, travel itinerary, paid
visa fees, biometric information, translated
documents in English and Welsh.
Work Permits
For non-EU workers, it is mandatory to obtain a

work permit in the UK. The permit needs to be
sponsored by a licensed incorporated business
entity in the UK. A Certificate of Sponsorship
from the UK government is also mandatory. The
relevant UK work permit for foreigners is
usually the General work visa or the Tier 2 visa.
Only Tier 1 applicants can apply for a UK work
permit without a job offer. As per the laws in the
UK, an EOR or any other third-party
organization cannot sponsor work permits.
However, Skuad’s hi-tech platform and expertise
can be of great help in obtaining UK work
permits optimally and in compliance with the
UK immigration system.
Payroll & taxes in the UK
Whether you hire local British workers or

relocate professionals from your country, it is
imperative to ensure complete compliance with
the local laws on payroll & taxes in the UK. All
these formalities can be a long-drawn and
daunting process for foreigners, which is why it
is helpful to hire a local specialist for payroll
outsourcing in the UK to help you manage all of
this.
Taxation in UK
Employee Taxation
The income tax depends on how much higher

the income of the employee is above the
Personal Allowance. The standard Personal
Allowance in the UK is £12,570. In case
employees claim Marriage Allowance and Blind
Person's Allowance, their Allowance is higher. If
the income is over £100,000, then the Personal
Allowance is lower.
For an employee with a standard allowance of
£12,570.
Employer Taxation
UK employers need to operate the Her Majesty's

Revenue and Customs (HMRC) PAYE system.
This system is used for the collection of income
tax and National Insurance. It is mandatory to
make deductions while making payments to
employees, such as salary, wages, bonus, tips,
maternity pay, Statutory Sick pay for PAYE, etc.
Tax Explanation
Tax explanation contribution to

Employer Taxation Social Security 12% on weekly
salary (GBP 183.01 to GBP 962)
Contribution to
social security 13.8% on weekly salary
system
Tax Explanation
Corporate Income
19%
Tax
Employers with in-house payroll management

must inform the HMRC about employee
payments and deductions just before payday. In
case of any reduction claim, employees need to
submit another report. With Skuad's EOR
solution, all of this is managed by a team of
professionals on your behalf. Talk to us.
Bonuses
Employees are generally awarded both cash and

non-cash bonuses but that’s not legally required.
Incorporation
How to set up a subsidiary for your business in

the UK?
A UK subsidiary is formed in the UK and
incorporated as per the laws of company
formation. The subsidiary capital can be run by
the company with a local partner or fully owned
by the parent company.
The first step is to have a registered office
address. You can open up a Sole Director
subsidiary, in which you need to provide your
residential and service address. The Companies

House takes about 24 hours to get back to you
with its decision. Changes to the subsidiary are
allowed after incorporation. There are multiple
business opportunities in the UK and different
structures available. Understanding all of it and
picking the right one can be tricky. Hiring
Skuad's Employer Of Record UK solution helps
partners fulfill their HR requirements
seamlessly without the need to incorporate their
subsidiary or incorporating a holding company
in the UK. Book a demo today to set the ball
rolling.
Professional Employer Organization
(PEO)
A Professional Employer Organization (PEO)

leases employees to an employer. The PEO
handles multiple employee-related liabilities
where organizations can outsource their HR
functions, including payroll, compensation,
benefits, taxes, and payroll administration.
Comparing the services of a professional
employer organization in the UK and an EOR in
the UK.
A PEO works as a co-employer whereas an
EOR works as a full-legal employer of the
payroll employees.
A PEO has some liabilities of the workers,

whereas an EOR has complete liabilities.
With a PEO, you need to arrange insurance
for your employees, whereas an EOR takes
care of employee insurance.
A PEO handles State Unemployment Tax and
Federal Unemployment Tax Act rates, while
EOR offers insurance coverage for all.
With a PEO, you need to make decisions all
the time; with an EOR, all HR-related
decisions and paperwork are made by the
EOR, giving you more time to look after your
business.
How can Skuad help? Skuad helps handle all the
HR-related functions in the backend, including
compensation and payroll, contracts, visas, and
collection of documents, ensuring compliance
with UK laws, taxation, and more. Skuad’s
Employer Of Record UK solution helps discover
global talent and facilitates the onboarding of
full-time employees and contractors optimally,
cost-effectively, and flawlessly.
Conclusion
Skuad is an HR-tech platform with expertise in

building up remote teams for your businesses,
while as the top management, you focus on your
core business operations. To learn more about
how our unique tech-enriched platform can add

value to your global expansion plans, book a
demo with Skuad today.
FAQs for EOR in the UK
What is EOR in the UK?
E‍ mployer of Record (EOR) in the UK refers to a

third-party service that employs staff on behalf
of another company, handling all legal and HR
responsibilities. The EOR manages payroll, tax
compliance, employee benefits, and ensures
adherence to UK employment laws, allowing
businesses to efficiently onboard and manage
talent in the UK without establishing a local legal
entity.
Who provides EOR Services in the UK?
Skuad provides Employer of Record services in

the UK. Skuad specializes in managing
employment-related responsibilities, ensuring
compliance with UK employment laws, and
providing expert HR support. We help
businesses seamlessly build and manage their
workforce in the country.
How much is the Employer of Record cost
in the UK?
Typically, EOR services charge a fee based on a

percentage of the employee's salary or a flat fee
per employee. With Skuad, you pay as low as

USD 229 per month per employee.
‍
‍
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1/24/24, 9:56 AM Employer of Record (EOR) in United Kingdom - Employment Laws, Payroll, Hiring - PEO United Kingdom

$229. Valid for new customers! ✨ countries

About Pricing Request demo

Global Employer of Record Guide / United Kingdom

Employer of Record in the

Employer of Record in the UK

EOR in The Skuad's United Kingdom’s Employer of Record

corporate laws that are different from that of

With the aid of an automated and hi-tech

solution, Skuad gives you access to multiple

to recruit remote workers and handle complex

legal compliances and administrative tasks

Population: 67.96 million (2024 estimate)

One platform to grow your

Hire and pay talent globally, the hassle -free

way with Skuad

Being one of the major globalized economies in

especially for business entities that are not fully

As per the United Kingdom Labour law,

A maximum of 40 hours over 5 days

Overtime Employees can work overtime only if

overtime work; this should be

There are eight public holidays in the

Maternity Leave The statutory

The minimum wage is between £6.56 to

The National Insurance Contributions

Employee This law offers protection from

discrimination transfers, and employment terms and

Personal Information in the UK is

Employment Laws in the UK

Employment Rights Mentions the rights of employees

Mentions the minimum wages

Employment Establishes recognition of Trade

Discusses discrimination at the

It is tax legislation that helps

Why immerse yourself in understanding the

Contractors vs. Full-Time Employees

Here is the difference between a contractor and

committed to the vision and mission of the

To hire employees in the UK, the traditional

employment laws and compliances in the UK, it

Probation & Termination

Probationary Period in the UK

The UK's standard probation period is three

Termination or dismissal is when the employer

case of termination, the employer needs to give

EOR Solution in the UK

The Employers of Record (EOR) model is a smart

workflows, digital signatures, employee payroll,

When your organization decides to expand its

a subsidiary from the ground up, while

Types Of Visas in the UK

Having the right employees in your organization

Tier For highly skilled employees, investors, and

Tier For skilled employees from outside the EEA.

Tier For low-skilled employees usually looking for

Tier For students aged 16 years and above from

Work visa requirements in the UK

Requirements differ based on the tier type.

For non-EU workers, it is mandatory to obtain a

Payroll & taxes in the UK

Whether you hire local British workers or

The income tax depends on how much higher