See why 300+ companies choose Horizons as their UK PEO/EOR
Hire in the UK, without UK company set-up
Horizons’ UK PEO & Employer of Record (EOR) solutions streamline employee hire in the UK.
We source, hire, and onboard new employees for UK businesses, ensuring full compliance with UK employment law and tax laws. This reduces the cost of hiring in the UK, allows for a faster expansion, and frees you up to focus on core business.
Our UK PEO simplifies employee hire
Horizons enables your business to expand its operations into the UK and hire local employees, without needing to set up a UK limited company.
Labour Laws in the UK
📝 UK employment contracts
Contracts of employment are a requirement of UK labour law, and must clearly state all relevant details of employment such as benefits, working hours, compensation, and so on. Salaries and wages need to be shown and provided in GBP, the local currency.
The main types of employment contract in the UK are full-time, part-time, fixed-term and zero hours (for employees without guaranteed hours).
By partnering with our UK PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
⏰ Working hours in the UK
The legal maximum working hours in the UK are 48 hours (taken as an average over a 17-week period). These can be distributed in any way throughout the week, but almost all office roles are Monday to Friday. Note, employees can also choose to opt out of this limit. The employer may ask, but employees cannot be punished or sanctioned in any way for refusing to accept.
📅 Public holidays in the UK
There are several public holidays in the UK, and they are commonly referred to as ‘bank holidays’.
Usually, there are 8 public holidays in England & Wales annually, but in 2022 there was one extra to celebrate the Queen’s jubilee.
Northern Ireland and Scotland follow a different structure, so you should be sure to research the local holidays when setting up a business in these countries.
🌟 Employment benefits in the UK
The main benefit provided in the United Kingdom is through the employers’ portion of the National Insurance Contribution, which is the national social security program requiring all employers and employees to contribute to the public health care system. The employer’s contribution is typically around 14%, on top of total compensation.
There is also an additional levy, known as the health and social care levy, which amounts to an extra 1.25%.
🏖 UK vacation leave
Every full-time employee in the UK can take 28 days per year of annual leave at full pay. Public holidays can be included in this, but employers usually still provide around 20-30 days plus the standard public holidays.
😷 UK sick leave
If employees are absent from work through sickness for over seven days, they must provide a doctor’s note as proof. Employers must cover up to 28 weeks of sick pay, beginning after the fourth day of continuous absence, at a statutory sick pay rate of £99.35 per week.
Many employers offer a more generous sick pay scheme, but the minimum legal requirement must be met.
👶 UK parental leave
Women can take 52 weeks of leave for maternity in the UK, with a minimum of two weeks taken after birth for most workers. The allowance is split into 26 weeks of ‘ordinary’ leave, and a further 26 weeks of ‘additional’ leave.
Statutory maternity pay is provided for 39 weeks. For the first six weeks, this is 90% of the average weekly earnings. For the remaining 33 weeks, it is the lower amount of either the same 90%, or £156.66, per week (as of 2022).
Partners can claim one or two weeks of paternity leave (paid). If the parents wish, there is also a possibility to share parental leave in the UK. This divides up to 50 weeks of leave and 37 weeks of pay across the two parents, and they can choose to take it together or separately.
💰 Employee severance and terminations in the UK
UK employees have various protections, so any employer should consider the relevant anti-dismissal legislation when considering terminations.
Employers in the UK must provide notice when terminating an employee. The statutory minimum notice period is one week of notice for between one month and two years of employment, one week for every year between two and 12 years of employment, and 12 weeks of notice for more than 12 years of employment.
Any further notice should be laid out in the employment contract, and employers usually provide one month or more as standard. Some contracts may also stipulate that payment is acceptable in place of notice.
In the UK, severance payments are given to employees who are made redundant when they have been employed for over two years. The payment totals half of one week’s pay for every year of employment when the employee was under 22 years old. This rises to one full week per year of employment between the ages of 22 and 40, and 1.5 week’s of pay for every year at the age of 41 and above.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ UK PEO can mitigate risk for foreign companies and provide guidance through this process.
🏦 Taxation in the UK
In the UK, income tax and National Insurance are paid via a ‘Pay As You Earn’ system, where employers withhold the relevant taxes from employees automatically. Taxes are rated progressively, so the rate varies between 0% and 45% dependent on income.
🏥 Health insurance in the UK
The National Health Service (NHS), the UK’s healthcare system, provides almost all healthcare for citizens and residents. This is covered by the government and National Insurance, so employers do not need to offer separate health insurance. The employer and employee contribute to their National Insurance at rates set by the government depending on income.
Some organizations do offer private cover as a perk, but it is not necessary.
💳 UK compensation & benefits
Compensation laws in the UK
The minimum wage in the UK rises regularly. It is set at a different rate for employees of different ages and apprentices:
- For those 23 and over, it is £9.50 per hour;
- For those aged 21-22, it is £9.18 per hour;
- For those aged 18-20, it is £6.83 per hour;
- For those aged 16-17, it is £4.81 per hour;
- For apprentices, it is £4.81 per hour.
Note also that UK equal opportunity law requires that pay does not discriminate on the basis of gender, ethnicity, disability and a range of other ‘protected characteristics’.
Benefit management in the UK
Setting up your UK benefits management system as a foreign employer can be a complicated process, with many different laws and employee protections in place.
One effective solution is to outsource your UK benefits management to Horizons. We will get you set up, in full compliance with the law, as quickly as possible, so you can focus on a rapid and successful expansion.