Hire and pay employees in

the United Kingdom, hassle-free

Hire and pay employees in the United Kingdom, hassle-free

With Deel, your business can easily hire employees in the United Kingdom. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in the United Kingdom is 1 day with Deel.

Currency

Pound Sterling (GBP)

Capital

London

Official Language

English

Payroll Cycle

Monthly

Onboard, pay and manage employees in the United Kingdom with Deel.

Usually, to hire in the United Kingdom, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Deel lets you hire employees in the United Kingdom quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.

Download the Guide

All the necessary benefits for the United Kingdom
built right in

Deel allows you to provide localized benefits for employees in the United Kingdom within minutes. All in one manageable online dashboard.

  • Employers Liability Insurance
  • Professional Training
  • State Pension Fund
  • Private Healthcare - Unisure (optional)
  • Private Healthcare - Freedom (optional)
  • National Insurance (Social Security)
  • Private Healthcare - Allianz (optional)
  • Pension benefits - Penfold (optional)
  • Life Insurance - Allianz (optional)
  • Private Healthcare - Canada Life (optional)

Our quickstart guide to hiring in the United Kingdom

Navigate the tabs below to learn everything you need to know about hiring an employee in the United Kingdom

Minimum Wage Requirements

The minimum wage varies by age and working hours. For employees aged 23+ working 40 hours a week, the minimum wage is £1,806.13/month (£21,673.60/year).

Starting on April 1, 2024, the National Living wage will increase to £11.44 per hour. The age at which employees are entitled to the National Living wage will decrease to 21 years (from 23 years).

Individual Income Tax

The individual income tax ranges from 0% to 45%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

Gross Annual Income Tax Rate (%)
Up to £12,570 0%
£12,571 - £50,270 20%
£50,271 and £150,000 40%
Over 150,000 45%

 

 

 

 

 

 

 

There are slightly different tax rates and banding in Scotland, however, this is all taken care of by the tax authorities. Employees based from a Scottish address will have a slightly different tax code that will enable the correct taxation to be applied.

Payroll Cost

The employer cost is generally estimated at 17.3% of the employee salary.

  • National Insurance Contributions - 13.80%
  • Mandatory Private Workplace Pension - 3% 
  • Apprentice Tax Levy - 0.5% of the employee's (NICable) salary

National Insurance contributions are calculated on monthly salary over GBP 758.  The minimum employer contribution for the mandatory private workplace pension is 3%, however, the rate can be increased.
The apprentice tax levy is calculated on the employee’s NICable salary.


Optional and Conditional Costs:

  • Optional Private Health Insurance
    • Single employee: GBP 67.70 
    • Employee + children: GBP 98.55
    • Couple: GBP 129.40
    • Family: GBP 160.25
  • Optional Life Insurance - GBP 10, GBP 20, GBP 30 or GBP 40
  • Private Health Insurance Admin Fee - USD 15 per invoice with Health Insurance

Overtime Pay & Maximum Hours

Standard working hours are 8 hours per day, 40 hours per week. The standard work week is from Monday to Friday. Overtime payment is not mandatory, however, an employee's average pay for the total hours they work must not fall below the National Minimum Wage.

Maternity Leave

Eligible employees can take up to 52 weeks of maternity leave: 26 weeks of Ordinary Maternity Leave and 26 weeks of Additional Maternity Leave. Statutory Maternity Pay (SMP) for eligible employees can be paid for up to 39 weeks, usually as follows:
  • first 6 weeks: 90% of their average weekly earnings (AWE) before tax.
  • following 33 weeks: £172.48 or 90% of their AWE (whichever is lower).
  • final 13 weeks of maternity leave are unpaid

Paternity Leave

Eligible employees are entitled to two weeks of paid paternity leave. The leave must be taken in one period. The employee will receive £172.48, or 90% of their average weekly earnings (whichever is lower) during this period.

Parental Leave

Mother and father may choose instead to share up to 50 weeks of leave and 37 weeks of pay between them after the first 2 weeks of compulsory maternity leave to be taken only by the mother (4 weeks if the mother works in a factory).
The first 37 weeks are paid at £172.48 a week or 90% of the employees' earnings, whichever is lower. The remaining 13 weeks are unpaid.

In addition to the standard Shared Parental Leave, employees are also entitled to an additional 18 weeks of unpaid leave that can be used up until the child’s 18th birthday.

Sick Leave

Employees are entitled to an unlimited number of sick days. The first 3 days of leave are paid at 100% salary by the company. After 3 days of sick leave, employees are entitled to employer-paid Statutory Pay Leave of up to 28 weeks for eligible employees. Statutory Sick Pay is £109.40 per week. 

Termination Requirements

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in the UK can be complex. There is no at-will termination in the UK for employers outside the probation period and termination must be done for just cause.

Compliant terminations include:

  • Fair dismissal
  • Unfair dismissal
  • Constructive dismissal
  • Wrongful dismissal

Notice Period

The minimum notice period is 1 week and will be increased according to the length of the employment.

  • 1 week if the length of service is 1-2 years
  • 1 week for every year of service on 2 - 12 years
  • 12weeks if the length of services is 12+ years

Severance for Employees

In the UK, all employees who are terminated due to redundancy are entitled to severance pay. Severance pay is calculated as follows.

  • 0.5 weeks pay for each year of service where the employee was below the age of 22
  • 1 weeks pay for each year of service where the employee was between 22 to 40 of age
  • 1.5 weeks pay for each year of employment where the employee was 41 and over

Paid Time Off

Full-time employees are entitled to 20 day of paid time off (PTO) a year plus an additional eight public holidays.

Please note, in the platform this is listed as 20 days of PTO and the employee will be entitled to an additional 8 days of public holiday on top of this.

PTO (Including public holidays) accrues at 5.6 weeks times the number of days a week the employee works.

Public Holidays

Public holidays, also known as bank holidays, vary by region in the United Kingdom. There are 8 bank holidays in England and Wales, 9 in Scotland, and 10 in Northern Ireland.

  • New Year's Day
  • Good Friday
  • Easter Monday
  • Early May Bank Holidays
  • Spring Bank Holiday
  • Summer Bank Holiday
  • Christmas Day
  • Boxing Day

Additional Regional Holidays

  • January 2: Scotland Day
  • March 17: St Patrick's Day Northern Ireland
  • July 12: The Twelfth Northern Ireland
  • November 30: St Andrew's Day Scotland

Onboarding

Onboarding takes 1 business day after the SOW is signed. 

Employment Contract Details

All Employment Agreements must include:

  • Employer’s name
  • Employee’s name
  • Job title or Job description
  • Start date
  • Contract term
  • End date for fixed term contracts
  • Salary and salary frequency
  • Working hours and days of work, if and how they may vary
  • Working hours specifications if applicable (if employees will have to work on Sundays, during the ‘night period’ or take overtime)
  • Holiday entitlement (and if that includes public holidays)
  • Workplace and whether employees might have to relocate
  • Additional workplaces if applicable
  • Employer's address
  • Probation period
  • Any other benefits
  • Obligatory training, and whether or not this is paid for by the employer
  • Termination conditions

    For employees, it must also include the date that a previous job started if it counts towards a period of continuous employment.

Probation Period

Probation periods are not mandatory. The maximum probation period is 6 months.
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Hiring in the United Kingdom, hassle-free

With Deel, your business can easily hire employees in the United Kingdom with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in the United Kingdom and 150+ countries.

Group (8)

599 USD

Management fee

Group (9)

17.3%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in the United Kingdom?

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