This article is about Justworks EOR (Employer of Record). What product am I using?
Quick Hiring Snapshot
Capital: London
Currency: British Pound Sterling (GBP)
Primary language: English
Standard workweek: 48-hour maximum average working week (employees may opt out)
Minimum wage: National Minimum Wage (NMW) and National Living Wage (NLW), age-based. The NLW applies to older workers (age threshold set by the UK government), while the NMW applies to younger workers and apprentices. Rates are reviewed annually.
Typical pay frequency: Monthly
Public holidays: 8 bank holidays in England and Wales (variations apply in Scotland and Northern Ireland)
Key employment framework: Employment Rights Act 1996 and related regulations
Hiring without a local entity: Available through Justworks EOR
Overview
The United Kingdom has a well-established employment framework that balances statutory worker protections with employer flexibility. Employment relationships are governed by legislation including the Employment Rights Act, the Working Time Regulations, and various statutory pay regulations.
Employers hiring in the UK must comply with minimum wage rules, working time limits, statutory leave entitlements, payroll withholding obligations, and pension auto-enrolment requirements.
When hiring through Justworks EOR, Justworks becomes the legal employer in the UK. We manage compliant employment contracts, payroll processing in GBP, statutory registrations, pension auto-enrolment administration, and required reporting. Your team member works day to day with your organization, while local employment compliance is handled within the UK legal framework.
This guide provides a high-level overview of what to expect when hiring in the United Kingdom.
Note: This article is for informational purposes only and does not constitute legal or tax advice.
What Employers Should Plan for When Hiring in the United Kingdom
Employees and workers must receive a written statement of employment particulars on or before their first day of work. This document outlines pay, working hours, job duties, holiday entitlement, notice periods, and other required terms If contracts are being backdated It is best practice that the document should be signed with the current date, but contain a clause stating it is effective from a specific past date (the "commencement date").
The UK’s Working Time Regulations set a 48-hour maximum average working week, typically averaged over a 17-week reference period. Workers may voluntarily opt out of this limit. Full-time schedules commonly range from 37.5 to 40 hours per week.
The UK provides structured statutory pay programs, including Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), and other family-related statutory payments. Employers must administer these programs in accordance with government rules.
Termination protections increase with tenure. Employees typically gain protection against unfair dismissal after 2 years’ continuous service, although there are exceptions in certain circumstances (for example, dismissals related to discrimination or automatically unfair reasons). Notice requirements and potential redundancy payments may apply depending on the circumstances.
The UK's two-year employment law, which currently requires employees to work for two years before gaining protection against unfair dismissal, will change to a six-month qualifying period on 1 January 2027. Employees who start work from July 2026 onwards will likely be the first to fall under the new six-month rule
Through Justworks EOR, employment agreements, payroll administration, and statutory processes are structured in alignment with UK employment law.
Compensation Expectations
Employees in the UK are paid in British Pounds (GBP), typically on a monthly payroll cycle.
The UK has age-based minimum wage rates. The National Living Wage (NLW) applies to older workers (with the age threshold set by the government), while the National Minimum Wage (NMW) applies to younger workers and apprentices. Rates are reviewed annually.
In addition to salary, employers must administer and remit:
- PAYE (Pay As You Earn) income tax withholding
- National Insurance Contributions (NICs)
- Workplace pension contributions under auto-enrolment rules
Under UK pension auto-enrolment legislation, eligible employees must be automatically enrolled into a qualifying workplace pension scheme. Minimum contribution levels apply to both employer and employee contributions.
When hiring through Justworks EOR, payroll is processed in local currency and statutory deductions, National Insurance contributions, and pension enrolment obligations are administered in accordance with UK requirements.
Common Industries and Market Compensation
The UK has a diversified economy with strong hiring activity across service-based sectors well suited to EOR-supported roles. Compensation varies by region, with London and the South East typically commanding higher salaries than other areas.
Please be aware that this information does not serve as HR or legal advice. It is essential to consult internally before extending an offer to an employee in their country of residence.
Technology and Software Development
The UK has a mature technology sector, particularly in London, Manchester, and Edinburgh.
- Mid-level Software Developer: approximately £50,000 – £75,000 per year
- Senior Software Engineer: approximately £75,000 – £110,000+ per year
- Engineering Manager: approximately £90,000 – £140,000+ per year
Highly specialized roles, particularly in fintech, AI, or large multinational firms, may exceed these ranges.
Financial and Professional Services
London is a major global financial hub, with additional regional strength in cities such as Edinburgh and Leeds.
- Financial Analyst / Accountant: approximately £40,000 – £70,000 per year
- Finance Manager: approximately £70,000 – £120,000 per year
- HR Manager / Business Partner: approximately £50,000 – £85,000 per year
Compensation varies based on firm size, regulatory exposure, and seniority.
Customer Support and Operations
The UK supports multilingual customer service and operational roles.
- Customer Support Representative: approximately £22,000 – £35,000 per year
- Customer Success Manager: approximately £45,000 – £75,000 per year
- Operations Manager: approximately £55,000 – £90,000 per year
Roles outside London may trend toward the lower end of the range.
Note: Salary benchmarks vary by location, seniority, and market conditions.
Statutory Programs and Contributions
The UK operates structured statutory programs funded through payroll contributions.
Employees and employers contribute to National Insurance, which supports state benefits and access to the National Health Service (NHS).
Employers must also comply with pension auto-enrolment rules. Eligible employees must be enrolled into a qualifying workplace pension scheme, and minimum employer and employee contributions apply.
Employees have to be auto enrolled from their very first payroll but can opt out after this. The employee and employer will then receive a refund of the contributions taken in the first payroll and no further deductions will be made. Every three years, employers must re-enrol staff who previously opted out, provided they still meet the criteria.
Healthcare in the UK is publicly funded through the NHS. Employer-sponsored private medical insurance is not mandatory but is commonly offered as a supplemental benefit.
When hiring through Justworks EOR, required payroll registrations, National Insurance contributions, and pension enrolment obligations are administered in accordance with UK law.
Country-Specific Leave
Annual Leave
Employees are entitled to 5.6 weeks of paid annual leave per year. For a full-time employee working five days per week, this equals 28 days. Employment contracts may include bank holidays within this entitlement.
Public Holidays
There are typically 8 bank holidays in England and Wales. Scotland and Northern Ireland observe slight variations. Bank holidays may or may not be offered in addition to statutory annual leave, depending on contract terms.
Sick Leave
Eligible employees may qualify for Statutory Sick Pay (SSP). SSP is paid by the employer at a government-set weekly rate for eligible employees for up to 28 weeks, subject to qualifying criteria.
Employers may choose to provide enhanced contractual sick pay in addition to SSP.
Maternity, Paternity, and Parental Leave
The UK provides structured family leave protections:
- Statutory Maternity Leave: Up to 52 weeks (with statutory pay available for eligible employees for a defined portion).
- Statutory Paternity Leave: Typically up to 2 weeks. Statutory paternity leave law changes on 6 April 2026 under the Employment Rights Act 2025, making it a "day one right". Employees will no longer need 26 weeks of service to qualify.
- Shared Parental Leave: Allows eligible parents to share leave and pay entitlements.
Statutory payment amounts and eligibility criteria are set by the government.
Hiring in the United Kingdom Through an Employer of Record
If your company does not have a registered UK entity, hiring directly would require company registration, HMRC payroll registration, PAYE setup, and compliance with pension auto-enrolment rules.
Through Justworks EOR, Justworks serves as the legal employer in the UK. We manage compliant employment contracts, payroll processing under PAYE, National Insurance contributions, pension enrolment, and statutory leave administration. Your employee works with your organization while employment compliance is handled within the UK regulatory framework.
This structure allows companies to hire in the UK while navigating statutory employment and payroll requirements in a compliant way.
Official Resources for Employers in the United Kingdom
- HM Revenue & Customs (HMRC)
- Advisory, Conciliation and Arbitration Service (ACAS)
- GOV.UK Employment Law Guidance
FAQ
Can I hire in the UK without establishing a local entity?
Yes. Through Justworks EOR, you can hire employees in the United Kingdom without setting up your own UK legal entity.
Are employers required to provide a pension?
Yes. Eligible employees must be automatically enrolled into a qualifying workplace pension scheme under UK auto-enrolment rules.
How much paid vacation do employees receive?
Employees are entitled to 5.6 weeks of paid annual leave per year.
What is Statutory Sick Pay (SSP)?
SSP is a government-set minimum sick pay amount that employers must provide to eligible employees for up to 28 weeks, subject to qualifying criteria.
Can I submit a Qualifying Life Event (QLE) in the United Kingdom, and how is it handled?
Yes. Employees enrolled in employer-sponsored benefits through Justworks EOR may submit a Qualifying Life Event (QLE) if they experience a change that affects benefits eligibility.
Common examples include marriage or civil partnership, birth or adoption of a child, divorce, or loss of other coverage.
Because core healthcare in the UK is provided through the National Health Service (NHS), QLEs typically affect supplemental employer-sponsored benefits, such as private medical insurance, dental coverage, life insurance, or pension contribution changes.
QLE requests must generally be submitted within the applicable enrollment window following the event and may require supporting documentation. If approved, benefit updates are processed in accordance with the applicable provider’s rules and timelines.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.