United Kingdom

Remote’s guide to employing in the United Kingdom

Capital city
London
Currency
Great British Pound (£, GBP)
Population size
67,886,004 (2020 census)
Language spoken
English
01

Facts & stats

The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK or U.K.) or Britain, is a sovereign country located off the north­western coast of the European mainland. The United Kingdom has the world's sixth-largest economy by nominal gross domestic product (GDP), and the ninth-largest by purchasing power parity (PPP). It has a high-income economy and a very high human development index rating, ranking 14th in the world.

United Kingdom Map
  • Capital city
    London
  • Currency
    Great British Pound (£, GBP)
  • Language spoken
    English
  • Population size
    67,886,004 (2020 census)
  • Ease of doing business
    Very Easy
  • Cost of living index
    $$$
  • Payroll frequency
    Monthly
  • VAT - standard rate
    20%
  • GDP - real growth rate
    1.398% (2018 est.)
02

Grow your team in United Kingdom with Remote

Employing in the United Kingdom requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. The complexity of employment regulations in the UK makes full compliance with employment laws a burdensome process.

Through Remote’s Global Employer of Record solution, your team is employed by our local legal entities in each country, and we take care of payroll, tax, benefits and compliance so you can focus on what matters most -- your people.

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the United Kingdom risks illustration

Risks of misclassification

The United Kingdom, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.

03

Employing in the United Kingdom

People at work in the UK benefit from a minimum charter of employment rights, which are found in various Acts, Regulations, common law and equity. This includes the right to a minimum wage, paid holidays, break from work, limit to excessively long working hours, automatic enrolment in a basic occupational pension and provisions for leave.

The following are only guidelines in the broadest sense, and professional legal services are recommended when employing in the UK.

Public holidays

Date Holiday Name Extra information
New Year's Day
St. Patrick's Day Only observed in Northern Ireland
Good Friday
Easter Monday England & Wales & NI. Not a Scottish Public Holiday.
May Day Bank Holiday Moved to May 8 in 2020 to commemorate Victory in Europe day
Spring Bank Holiday Also known as Summer Half-Term Monday
Battle of the Boyne (Orangeman's Day) Only observed in Northern Ireland. Falls on the 12 July unless this is a Saturday or Sunday. Falls on 13 July in 2020.
Summer Bank Holiday Scotland only
Late Summer Bank Holiday
St Andrew's Day Scotland only
Christmas Day
Boxing Day
Minimum
Wage

In the United Kingdom, the National Living Wage depends on the age of the worker. In April 2021, the national minimum wages were updated to the following hourly rates:

  • 23 and over: £8.91
  • 21 to 22: £8.36
  • 18 to 20: £6.56
  • Under 18: £4.62

Payroll
Cycle

Payroll frequency is once per month, usually at the end of the month between the 25th and last day of the month.

Onboarding
Time
We can help you get a new employee started in the United Kingdom fast. The minimum onboarding time we need is just 48 hours. If the employee's start date is after the 15th of the month, payment will be included in the next month's payroll.
04

Competitive benefits package in the United Kingdom

Besides providing your employees with all statutory benefits in the United Kingdom, Remote can advise on and arrange for custom benefits and perks for your employees upon request.

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05

Taxes in United Kingdom

Learn how employment taxes affect your payroll and your employees’ paychecks in United Kingdom.

  • Employer

    • 13.80% - National Insurance Rate
    • Minimum 3% - Pension Fund
  • Employee

    • Minimum 5% - Pension Fund
    • 0% - Up to 11,850
    • 20% - 11,850-46,350
    • 40% - 46,350-150,000
    • 45% - Over 150,000

    Questions about IR35 or UK contractors?
    Read Remote's guide to IR35 rules in the UK.

06

Types of leave

Statutory
leave

Full-time workers in the UK are entitled to 28 total working days of annual leave. These often include the 8 public/bank holidays which would otherwise be unpaid.

Pregnancy and
maternity leave

52 weeks, with the two first weeks mandatory for the mother. Comprised of ordinary maternity leave for the first 26 weeks and additonal for the last 26 weeks.

Parental/paternal
leave

Employee can choose to take either one week or two weeks consecutive leave. Leave cannot start before the birth. Mother can transfer up to 50 weeks of leave to partner, with up to 37 weeks of pay between the couple.

Other
leave
  • Time off work for public duties: intended to allow employees to fulfill certain public duties related to holding roles such as local councillor, school governor, trade union member, etc.
  • Time off for family and dependents: intended for unforeseen personal circumstances for which an employee has to take time off immediately. Has to be an emergency and involve a dependent.
07

Employment
termination

Termination process

Termination from the employer valid grounds with any fair reasons. There are six potentially fair reasons for dismissals::

  • Employee's capability or qualifications for performing work of the kind the employee was employed to do;
  • Employee conduct;
  • Employee retirement;
  • Employee redundancy;
  • Employee could not continue work in position without contravening statutory duty or restriction; or
  • Other substantial reason justifying dismissal

Notice
period

Notice period depends on the length of the employment relationship. For up to 4 years of employment, the notice period is no less than 1 month. For 5 to 11 years of employment, the notice period is no less than 1 week's notice for every year of completed year of continous employment. Above 12 years, it is no less than 3 months.

Probation
periods

There is no legal stipulation for minimum and maximum probation periods and all statutory rights and protections apply from commencement of employment. Employers can set probationary periods in the employment contract.

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