The United Kingdom
Want to hire someone in the United Kingdom? You’re in the right place. Hiring remotely is a confusing topic—and there’s a good chance you’ve been handed misinformation at some point or another. We’re here to clear all that up. By the end of this page, you’ll know everything you need to know to start hiring remote talent in the United Kingdom.
Country snapshot
CURRENCY
Pound Sterling (GBP)
EMPLOYER TAXES
16.80%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
English
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Hiring in the United Kingdom can be notoriously difficult—but not when you know what you’re doing. If you want to hire remote talent in the United Kingdom, you have two options: Hire people as contractors, or hire them as employees.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in the United Kingdom than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in the United Kingdom.
Employer tax
- A - Most employees (other than those in other category letters below)
- B - Married women/widows entitled to pay reduced NIC
- C - Employees of Stat pension age
- J - Employees who can defer NIC due to it being deducted from another job
- H - An apprentice under the age of 25 years old
- M - Employees under the age of 21 years old
- Z - Employees under the age of 21 years old, who can defer NIC due to it being deducted from another job
Individual tax
- Up to 12,570 - 0%
- Over 150,000 -45%
Paid Time Off (PTO)
PTO is calculated by :
Employers must give a minimum of 28 days paid leave per year. The Public holidays can be incorporated as part of the 28-day leave entitlement; however, it is common practice for employers to give more than 28 days.
If employees were unable to take all of their entitled holiday leave for reasons related to Covid-19, they are allowed to carry it over to the next two years.
Public Holidays
There are 8 public holidays in England, Wales and Scotland, and 10 in Northern Ireland.
Sick Days
Sick leave pay varies based on the :
Workers currently employed can receive £95.85 per week Statutory Sick Pay (SSP) for up to 28 weeks if they are too ill to work. For an employee to qualify they must be sick for four or more days in a row.
Employees must receive the statutory minimum but may be entitled to more depending on the company’s sick pay scheme.
Employees must give their employer a doctor’s note if they have taken sick leave for more than 7 days in a row. This includes non-working days, such as weekends and bank holidays.
Maternity Leave
Statutory maternity leave is 52 weeks and is comprised of:
Ordinary Maternity Leave – first 26 weeks
Additional Maternity Leave – last 26 weeks
Mothers are required to take off at least 2 weeks’ leave after the baby is born (or 4 weeks for factory workers) out of the entitled 52 weeks.
Unless the child is born early, the earliest that leave can be taken is 11 weeks before the expected week of childbirth.
Statutory Maternity Pay (SMP) is paid by the employer for up to 39 weeks with the employee receiving:
90% of their average weekly earnings (before tax) for the first 6 weeks £148.68 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks
Paternity Leave
Employees can choose to take either 1 week or 2 consecutive weeks’ leave. The allotted time off is the same regardless of the number of children (for example twins). Leave can’t start before the birth.
The statutory weekly rate of Paternity Pay is £148.68, or 90% of the average weekly earnings (whichever is lower).
Any money paid is done so in the same way as wages are paid, for example monthly or weekly. Tax and National Insurance will be deducted.
Parental Leave
Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) is given to eligible employees who are having a baby or adopting.
Leave must be used in the first year the child is born
Up to 50 weeks of leave is shareable with up to 37 weeks of pay between the couple.
Leave can be taken in blocks, all at once, together as a couple, or separate
Other Leave
Jury Service Leave: Employers to provide their full-time regularly employed employees, job-protected, unpaid leave for their duty as jurors or as a witness in a case, or acting as a plaintiff or defendant in the courts.
Public Duties Leave: Employees are entitled to a reasonable unpaid amount of time off to perform public duties, for example, if they are:
- a magistrate (also known as a justice of the peace)
- a school governor
- a member of any statutory tribunal
- a member of the managing or governing body of an educational establishment
Marriage Leave
The law does not provide employees with a statutory right to time off because they are moving house, getting married or going on honeymoon.
Bereavement Leave
In the UK in the event of the death of an immediate family member, an employee is entitled to bereavement leave of up to three days.
Termination Process
Dismissal can be deemed fair or unfair depending on reasoning and conduct.
The termination process varies according to the employment agreement and collective agreement in place and is based on the type of contract and reason for termination.
Notice Period
Notice must given based on what is stated in the employment contract or the statutory minimum, whichever is longer.
The statutory redundancy notice periods are:
- at least one week’s notice if employed between one month and 2 years
- one week’s notice for each year if employed between 2 and 12 years
Dismissal without notice can be utilized in cases of gross misconduct.
Employees on Fixed-term contracts which are ended ahead of the expiry date need to be given the statutory notice period.
Employers can pay in lieu of notice.
Severance Pay
Severance is only required in cases of Redundancy. Payment is statutory if an employee has been under contract for at least 2 years:
Half a week’s pay for each full year for employees under the age of 22
One week’s pay for each full year for employees between the ages of 22 to 41 years of age
One and half weeks’ pay for each full year for employees over the age of 41
Length of service is capped at 20 years
Weekly pay is capped at £525
Probation Period
There is no mandatory requirement but it is common to utilize a trial period of 3 to 6 months.
Working Hours
Full-time employment is 8 daily hours and 48 weekly hours, maximum.
Overtime
Employers can ask for workers consent, in writing, to opt out of the 48 hours weekly limit.
For an employee to work overtime it must be stated and agreed upon in the employment contract.
Employers do not have to pay any overtime unless it is outlined in the contract.
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