UNITED KINGDOM PEO & EOR
Hire in the UK without
a local entity today
As a Global PEO & EOR service provider, we pride ourselves on our global reach, in-country knowledge, and ability to swiftly and efficiently mobilize workers around the world. Our robust PEO/EOR covers everything from global HR, payroll, compliance, in-country support, immigration, visas, and more.
Get started and hire in the United Kingdom today with Gibson Watts Global.
DID YOU KNOW
- The UK’s corporation tax rates are the lowest in the G7 and the country also houses four of the world’s leading universities.
- Britain ranks 5th in the world for growth opportunities and its capital city, London, is considered the ‘financial hub of the world‘.
- The nation has record investments in fintech, cleantech and AI, along with a diverse population of 67 million.
Forget software,
this is expansion
with a human touch
United Kingdom PEO Services
A lucrative place for doing business
There are many reasons why the UK is such a lucrative place for business amongst international companies; aspects such as the country’s economic stability, talented workforce, and business-friendly environment are just a few. In the 2018/2019-tax year, 672,890 start-ups were founded in the UK, and with good reason.
Gibson Watts Global offers a range of UK PEO and Employer of Record services to enable growing businesses around the world to compliantly enter the UK market without the need of a permanent entity or establishment. Choosing a PEO or Employer of Record route into the UK market significantly speeds up your time-to-market, and gives you access to the wider Gibson Watts Global Group’s support with recruitment challenges and consultancy support.
With our own head office being situated in London, we can offer UK PEO and Employer of Record services at much more competitive rates than other providers, and bring a compliant, fast, transparent, hassle-free process along with it.
Working in the United kingdom
Employment Contracts in the UK
An employment contract is an agreement between an employer and an employee that outlines the terms and conditions of their working relationship.
An employee’s rights at work depend a lot on whether they’re an employee, a worker or self-employed.
The law states that employees have a number of employment rights called “statutory rights.” Self-employed contractors do not have the rights and protections afforded to employees and workers. And workers are offered some (but not all) of the same protections as employees.
Many businesses choose to “trial” an individual as a contractor initially as this can allow for terminating their employment on shorter notice if it doesn’t work out. Employees need at least 2 years’ continuous employment before they can claim unfair dismissal.
Various employment contract types such as full-time, part-time, fixed-term, temporary, agency, freelancers, contractors, and zero-hour contracts determine an individual’s specific employment rights and obligations within these categories.
UK Salary Payments and Requirements
Salaried workers in the UK are typically paid 12 equal installments each year, directly into their bank accounts. Employers must register with His Majesty’s Revenue and Customs (HMRC) and use the Pay-As-You-Earn (PAYE) system to pay their employees.
PAYE is the system that HM Revenue and Customs (HMRC) uses to collect income tax and National Insurance contributions from employees. Employers are responsible for deducting PAYE from their employees’ wages and salaries before paying them, and then remitting the deductions to HMRC on a regular basis.
Employers must deduct taxes from employees’ pay checks every time they pay them, regardless of whether they are salaried or hourly workers.
Employers must send their most recent pay deductions to HMRC by the 19th or 22nd of each month, depending on payment method. They must also submit a final report for the year and provide Form 60 to each employee before the end of the payroll tax year (5th April).
In the United Kingdom, 13th-month pay is not mandatory, and it is not a common expectation among local employees. However, employers may introduce bonuses which are at the discretion of the employer.
Once you’ve registered as an employer, you can run payroll in the UK yourself or outsource it. If employers choose to outsource their payroll, they still have various responsibilities, including:
- Recording employee wages
- Creating payslips
- Administering national insurance contributions
Working Hours in the UK
Employees cannot work more than an average of 48 hours per week, unless they sign an agreement to this alongside their contract. A standard working week in the UK is Monday to Friday between 8:00/9:00 am to 4:00/5:00 pm with an hour lunch.
Employees are generally paid at their usual hourly rate, however if they work more than normal full-time hours or at unsociable times, they may get pay more.
Some employers in the UK give additional time off known as ‘time off in lieu (TOIL)’ in substitute of overtime pay.
National Living Wage
As of April 2024, these are the rates for the National Living Wage. The rates are subject to change on the 1st of April every year.
Age Group | National Living Wage |
Apprentice | £6.40 |
Under 18 | £6.40 |
18-20 | £8.60 |
21 and over | £11.44 |
Apprentices are entitled to the apprentice rate if they’re either:
- Aged under 19
- Aged 19 or older and in the first year of their apprenticeship
Corporate Tax
From April 2024, businesses will now pay 25% corporation tax rate, provided they report profits above £250,000. Smaller entities with profits of up to £50,000 will remain at the previous 19% rate. Between these two rates, a system of marginal relief will apply.
Companies are required to file a corporation tax return with HM Revenue and Customs (HMRC) each year. The tax return must show the company’s profits and losses for the year, as well as the amount of corporation tax that the company owes.
Income Tax
Your income tax rate in the UK depends on how much you earn.
The basic rate is 20%, but it goes up to 40% for earnings above £50,270 and to 45% for earnings over £125,140. You don’t have to pay any income tax on the first £12,570 of your earnings (this is called the Personal Allowance). However, if you earn more than £100,000, your Personal Allowance is reduced by £1 for every £2 you earn above £100,000.
In other words, the more you earn, the more income tax you have to pay.
Here is a table that shows the UK income tax rates for 2024-25:
Income | Tax rate |
Up to £12,570 | 0% |
£12,571 to £50,270 | 20% |
£50,271 to £125,140 | 40% |
Over £125,140 | 45% |
National Insurance (NI)
National Insurance is like income tax, but it helps to pay for government benefits when people need them, for example, when unemployed, ill, in retirement, or on bereavement leave.
This tax is paid by most workers, depending on their job and earnings. It’s a set amount taken off your wages, either automatically if you are in the PAYE system, or by making a payment through a self-assessment tax return if you’re not.
Individuals currently have to pay NI if they earn either:
- More than £1,048 per month (£12,570) as an employee, or
- Make more than £12,570 a year in profit from self-employment
The amount you owe for National Insurance (NI) varies based on your category. There are four main classes:
- Class 1 – Paid by employees and employers.
- Class 2 – A fixed rate for self-employed individuals.
- Class 3 – Voluntary contributions for those who wish to maintain their NI record for specific benefits, like the state pension.
- Class 4 – Paid by self-employed individuals on profits over a certain amount.
This is due to change in the 25/26 tax year, with increases in Employers National Insurance contributions.
Cultural Information
The United Kingdom is a diverse country with a large population of around 67 million.
A variety of culture and experiences can be found throughout the British Isles, and art and music are key parts of the country’s culture and heritage.
The United Kingdom boasts a rich history which can be explored and observed everywhere.
While the UK’s official religion is Christianity, British people are generally secular in their beliefs, with around 72% of the population not following any specific religion.
English is the official language of the United Kingdom, however Celtic languages including Cornish, Welsh, Irish, and Scottish Gaelic, can all be heard throughout the British Isles.
Outsourcing Payroll in the United Kingdom
With all their quirks and nuances, it can be easy to miss things in your global payroll operations when you hire across borders. And if a business makes a payroll mistake, it could result in costly fears or even legal action.
A PEO/EOR (Professional Employer Organization/Employer of Record) can help businesses mitigate payroll risks and ensure that payroll is processed accurately and on time. PEOs/EORs have the expertise and resources to ensure that payroll complies with all applicable laws and regulations.
Need a UK payroll provider but don’t know where to start? Reach out to us today!
