Hire in the UK compliantly. Navigate employer NIC at 15% from a £5,000 threshold, mandatory pension auto-enrolment from day one and an Employment Rights Act that is reshaping dismissal protections, SSP eligibility and zero-hours contracts across 2026 and 2027.
Capital
London
Language
English
Average Salary
£3,250
Payroll Cycle
Monthly
Employer Cost
18-20%
Paid Leave
28 days
Public Holidays
8 days
Tax Rates
20/40/45%
Hiring guides covering regulations, contributions and costs when you hire in the UK. Updated for 2026.
This guide breaks down the United Kingdom’s minimum wage system for 2026, covering the current statutory hourly rates by age band, the distinction between the National Living Wage and the National Minimum Wage, employer National Insurance obligations, compliance requirements under UK employment law, penalties for underpayment, and how minimum wage compares to living costs across major UK cities.
Read ArticleUK notice periods range from 1 week (for employees with 1 month to 2 years of service) to 12 weeks (for 12+ years), and the rules are asymmetric: employers owe more with each year of service, but employees only ever owe 1 week unless their contract says otherwise. This guide covers statutory and contractual notice, PILON (and whether the first GBP 30,000 is tax-free), garden leave, notice during probation, gross misconduct, redundancy, and the critical 2027 changes under the Employment Rights Act 2025 that reduce the unfair dismissal qualifying period to 6 months and remove the compensation cap entirely.
Read ArticleSeverance pay in the UK is not a single statutory entitlement. It is a combination of statutory redundancy pay, notice pay, accrued holiday, and potentially an enhanced ex-gratia payment negotiated through a settlement agreement. From 6 April 2026, the statutory redundancy cap rises to £751 per week with a maximum payout of £22,530. This guide covers the full picture: who qualifies, how to calculate statutory redundancy pay, the difference between redundancy pay and severance, settlement agreements, tax treatment, notice periods, and what it means for international employers hiring through an EOR.
Read ArticleThe Working Time Regulations 1998 set UK rules on the 48-hour working week, rest breaks, night work, and 28 days paid annual leave. They apply to all workers from day one, not just employees, and remain in force after Brexit. This guide covers every core rule, the opt-out mechanism, who is exempt, how holiday pay must be calculated (including regular overtime and commission), the 2024 reforms that changed accrual for irregular-hours workers to 12.07%, and what international companies hiring through an EOR need to get right to avoid tribunal claims and back-pay liabilities.
Read ArticleThe Employment Rights Act 2025 received Royal Assent on 18 December 2025 and represents the most significant overhaul of UK employment law in over a generation. It introduces 28 major reforms phased across 2026 and 2027, including reducing the unfair dismissal qualifying period from 2 years to 6 months (January 2027), removing the cap on unfair dismissal compensation, restricting fire and rehire, creating the Fair Work Agency, introducing guaranteed hours for zero-hours workers, expanding day-one rights for paternity and parental leave, and strengthening protections against sexual harassment. This guide covers every key change, the full implementation timeline, and what employers need to do now to prepare.
Read ArticleIR35 is UK tax legislation that prevents ‘disguised employment’ by ensuring contractors who work like employees pay similar Income Tax and National Insurance as permanent staff. Since April 2021, medium and large private sector clients are responsible for determining the employment status of contractors. From April 2026, new company size thresholds mean approximately 14,000 businesses will be reclassified as ‘small’, shifting status determination responsibility back to contractors. This guide covers how IR35 works, who is responsible, the three employment status tests, the April 2026 changes, the new Joint and Several Liability rules for umbrella companies, penalties for non-compliance, and what international companies hiring contractors in the UK need to know.
Read Article
The UK combines high employer NIC (15% from a low £5,000 threshold), mandatory pension auto-enrolment, IR35 off-payroll rules and a rapidly evolving Employment Rights Act. Any EOR not reflecting the April 2025 NIC increase in their pricing is underquoting true costs.
Our assessment of EOR providers in UK evaluates NIC accuracy, pension scheme compliance, IR35 determination capability and readiness for Employment Rights Act changes.
When you hire in UK, the 28-day statutory leave entitlement (including bank holidays) and mandatory pension auto-enrolment create a benefits baseline that employees take for granted. SSP reform from April 2026 now covers all workers from day one of illness regardless of earnings.
| Key Employment Facts | |
| Minimum Wage (21+) | £12.71/hour from April 2026 (National Living Wage) |
| Probation Period | No statutory maximum (typically 3-6 months by contract) |
| Standard Working Hours | No statutory standard (48-hour weekly limit under Working Time Regulations, opt-out available) |
| Paid Annual Leave | 28 days (5.6 weeks) including bank holidays |
| Notice Period | 1 week per year of service (statutory minimum, up to 12 weeks) |
| 13th Salary | Not statutory |
| Sick Leave | SSP at £123.25/week from day 1 (waiting days abolished April 2026), up to 28 weeks |
| Maternity Leave | 52 weeks (39 paid: 6 weeks at 90% + 33 weeks at £194.32/week) |
| Paternity Leave | 2 weeks at £194.32/week or 90%, whichever is lower (day-one right from April 2026) |
Good to Know: The 28-day leave entitlement can include the 8 bank holidays or be in addition to them, depending on the employment contract. Most professional roles offer 25 days plus bank holidays (33 total). The Working Time Regulations set a 48-hour weekly limit, but employees can voluntarily opt out in writing. SSP eligibility has been expanded from April 2026: the lower earnings limit no longer restricts access, meaning all employees qualify regardless of earnings level. For low earners, SSP is calculated as the lower of £123.25 or 80% of average weekly earnings. Scotland has its own income tax bands (19%/20%/21%/42%/45%/48%) which affect take-home pay for Scottish residents.
When you hire in UK, total employer cost runs approximately 18-20% above gross salary once NIC and pension are included. The April 2025 NIC changes remain the biggest cost increase UK employers have faced in a decade.
| Employer Contributions (2026/27) | |
| Contribution | Employer Rate |
| Employer NIC (Class 1 Secondary) | 15% on earnings above £5,000/year |
| Auto-enrolment pension (minimum) | 3% of qualifying earnings (£6,240-£50,270) |
| Apprenticeship Levy (pay bill over £3m) | 0.5% of total pay bill |
| Employment Allowance | Up to £10,500 offset against NIC |
| Total Employer Cost | ~18-20% (before Employment Allowance) |
| Employee Taxes (2026/27, England & Wales) | |
| Tax / Contribution | Employee Rate |
| Income Tax (basic rate) | 20% on £12,571-£50,270 |
| Income Tax (higher rate) | 40% on £50,271-£125,140 |
| Income Tax (additional rate) | 45% above £125,140 |
| Employee NIC | 8% on £12,570-£50,270, 2% above |
| Auto-enrolment pension (minimum) | 5% of qualifying earnings |
| Effective Rate (£40k salary) | ~25% income tax + NIC |
Good to Know: For a UK employee earning £40,000/year, the employer pays: £5,250 in NIC (15% on £35,000 above the £5,000 threshold) + £1,013 in pension (3% of qualifying earnings £33,760) = £6,263 on top of salary. Total cost-to-company: £46,263 or 1.16x gross. That same employee takes home approximately £30,800 after income tax (£5,486), employee NIC (£2,026) and pension (£1,688). All income tax and NIC thresholds are frozen until at least April 2028, meaning fiscal drag pushes more earnings into higher bands each year as wages grow. Earners between £100,000 and £125,140 face an effective 60% marginal rate as the personal allowance is withdrawn at £1 for every £2 earned above £100,000. The Employment Allowance of £10,500 can eliminate NIC entirely for small employers with modest payrolls. The £100,000 eligibility cap has been removed, so larger employers now benefit too.
England and Wales have 8 bank holidays. Scotland has 9 (adding St Andrew's Day on November 30). Northern Ireland has 10 (adding St Patrick's Day and Battle of the Boyne). There is no statutory right to time off on bank holidays.
|
Date |
Holiday |
|
January 1 |
New Year’s Day |
|
April 3 |
Good Friday |
|
April 6 |
Easter Monday |
|
May 4 |
Early May Bank Holiday |
|
May 25 |
Spring Bank Holiday |
|
August 31 |
Summer Bank Holiday |
|
December 25 |
Christmas Day |
|
December 28 |
Boxing Day (substitute for December 26, Saturday) |
Good to Know: Bank holidays are not automatic days off in the UK. The statutory 28-day annual leave entitlement can include bank holidays. Whether an employee gets bank holidays off with pay depends entirely on their employment contract. Most professional contracts specify “25 days annual leave plus bank holidays” (33 total), but many retail, hospitality and healthcare workers are required to work bank holidays at their normal rate unless the contract states otherwise. In 2026, Boxing Day falls on Saturday, so the substitute bank holiday moves to Monday December 28.
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