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Compliantly hire and expand your business in the United Kingdom
When it comes to employing and managing employees in the UK, there are specific procedures and regulations that must be followed.
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales, and Northern Ireland. It includes the island of Great Britain, the north-eastern part of the island of Ireland, and most of the smaller islands within the British Isles. Northern Ireland shares a land border with the Republic of Ireland; otherwise, the United Kingdom is surrounded by the Atlantic Ocean, the North Sea, the English Channel, the Celtic Sea, and the Irish Sea.
London
Capital
$48,913
GDP per Capita
$3.332 trillion
Total GDP
67,026,292
Total Population
0.940
Human Development Index
UTC (DST +1)
Time Zone
English
Official Language
Pound Sterling (GBP)
Currency
244,376 km2 (94,354 mi2)
Land Area
Here's what you need to know
Overall, employing workers in the UK requires careful attention to the specific requirements and regulations. Working with a local expert in employment and payroll can help ensure that you’re meeting all the legal requirements and providing a positive employment experience for your staff.
Employment contracts are not mandatory in the UK, but highly recommended. They should clearly outline:
Job title, duties, and responsibilities
Salary and benefits
Working hours and overtime pay
Leave entitlements (annual leave, sick leave, etc.)
Termination terms (notice period, redundancy pay)
Confidentiality clauses (if applicable)
Minimum Wage
The UK has a National Living Wage (NLW) for workers aged 25 and over, currently set at £9.50 per hour. A lower rate applies to younger workers (21-24) and apprentices.
Payroll Terms
Salaries are typically paid monthly by bank transfer on the last working day of the month or within a few days after. Payslips with details of gross pay, deductions, and net pay are mandatory.
Taxes
The UK operates a progressive income tax system. Employees pay income tax based on their annual earnings, with rates ranging from 0% to 45%. Employers withhold income tax at source (PAYE) and remit it to HMRC (HM Revenue & Customs) along with National Insurance contributions.
National Insurance (IN)
Both employers and employees contribute to National Insurance (NI) for social security benefits like pensions and healthcare. Contribution rates vary depending on the employee's earnings.
The UK has a standardized leave policy mandated by the Working Time Regulations:
Annual Leave
Minimum of 28 working days per year (pro-rated for part-time employees).
Bank Holidays
8 paid bank holidays per year (varies depending on location).
Sick Leave
Statutory Sick Pay (SSP) is available for eligible employees who are sick or injured, currently set at £99.35 per week for up to 28 weeks. Employers may offer additional paid sick leave as a benefit.
Maternity Leave
Up to 52 weeks of leave for female employees, with 39 weeks paid at 90% of average weekly earnings (capped amount) followed by Statutory Maternity Pay (SMP) at a lower rate.
Paternity Leave
Up to 2 weeks of paid leave for male employees (paternity leave and shared parental leave options available).
Probationary Period
There's no mandatory probationary period in the UK. However, employment contracts often include one, typically lasting between 1 and 3 months. During this time, termination can be easier for both employer and employee.
Termination of Employment
Termination of employment should follow the terms outlined in the contract or relevant employment legislation. Notice periods vary depending on the reason for termination and the employee's length of service. Severance pay (redundancy pay) may also be required under certain circumstances.
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