Renowned for its rolling hills, stunning beaches and rugged natural coastlines, the Isle of Man is a unique gem in the crown of the British Isles.

With welcoming locals, blended town and country living and a healthy work-life balance, it’s no wonder the Isle of Man is a haven for employers and employees. Located in the Irish Sea, roughly halfway between England, Ireland, Scotland and Wales and with a population of around 85,000, this relatively small island nation is often overlooked.

However, this self-governing British Crown Dependency has several characteristics that make it an attractive place to establish an overseas presence.

Why hire in the Isle of Man?

The United Nations Educational, Scientific and Cultural Organization (UNESCO) recognised the Isle of Man as one of the most beautiful destinations in the British Isles, boasting a plethora of outdoor activities, cultural sites and delicious local cuisine.

However, this stunning biosphere isn’t only an idyllic holiday destination. The Isle of Man is an offshore international financial centre and a region of enterprise and opportunity, presenting several benefits for growing businesses — especially those interested in employing overseas.

The Isle has a robust political system, and the High Court of Tynwald has been active for over 1,000 years, making it the world’s oldest unbroken parliament. Its capital, Douglas, is situated on the island’s east coast. Packet boats connect the Isle to the UK mainland, and its airport offers direct flights to Belfast, Birmingham, Bristol and Edinburgh.

Once dominated by agriculture and fishing, the Isle’s economy is now led by financial services, manufacturing, tourism and online gambling. This island nation has a strong, skilled workforce and is encouraging digital upskilling following the accelerated adoption of technology in the wake of the coronavirus pandemic.

In 2022, the island’s diverse economy shows signs of recovery from the past few years’ events, growing by 1.9% between 2019 and 2022. The UK-EU trade deal paved the way for a favourable Brexit outcome for the Isle, protecting exports and opportunities for local businesses. Alongside plans to bolster tourism in the region, the Isle’s economic outlook is promising for organisations wishing to employ skilled workers in this offshore British Crown Dependency.

However, it’s the nation’s corporation taxation laws — or lack thereof — that makes it a popular business destination.

Independent tax neutrality near the UK and Europe

One of the primary benefits of doing business in the Isle of Man is its separate tax system from the UK. This system allows residents to benefit from income tax rates of just 10% and 20% for individuals and, most importantly, 0% rates of corporation tax for all resident and non-resident companies on most income.

As a result, employers and employees working on the Isle can pay significantly lower rates compared to the UK whilst enjoying a similar quality of life and culture as on the mainland.

The local pro-business government also offers low-income taxes and other incentives to technology companies and financial institutions that establish a presence on the island, which has expanded employment opportunities in high-income industries as a result.

What you should know about employing in the Isle of Man

Although many employment laws in the Isle of Man are similar to the UK’s, they aren’t the same. Excluding VAT, which the UK governs, the Isle of Man has its own employment legislation.

Paid leave

The Isle of Man celebrates 10 public holidays yearly, but employees aren’t automatically entitled to paid leave for them. Employees are permitted four weeks of statutory paid leave, subject to accrual guidelines, and to receive payment for any remaining annual leave on termination of their employment.

Workers are entitled to 26 weeks of sick leave in addition to their statutory annual holiday, after which it’s deducted from annual leave allowances. Employers must adhere to different income tax rules for sickness benefits.

Women are also permitted 26 weeks of paid job-protected maternity leave, on top of all contractual benefits. Employees may take up to two consecutive weeks of paid paternity leave.

Working hours

There’s no set cap on the number of hours an employee can work in the Isle of Man. Still, employers must ensure no workers’ health is damaged by working excessively long hours in compliance with statutory obligations for maintaining health and safety.

Generally speaking, overtime should occur only as a last resort during periods of exceptional pressure and only with management approval. Under the New Terms for New Starters and Promotions (NTNSP) legislation, employees are entitled to overtime rates, excluding some contractural exceptions.

Employer costs

All companies operating in the Isle of Man must make National Insurance payments of 12.8% on all weekly earnings above £118. These payments go towards the NHS, state pensions, unemployment benefits, maternity allowance and other social programmes.

Employees are eligible for a retirement pension after reaching a certain age and necessary National Insurance contributions. Pension supplements are also available to add long-term benefits to the standard programme.

Outsourcing your overseas employment needs

There are countless benefits to hiring from the Isle of Man’s attractive talent pool. However, as with any cross-border, employers will face several legislative hurdles to managing overseas payroll and contracts and ensuring compliance with local employment laws.

For example, employment contracts in the Isle of Man aren’t required to be completed in writing, but employers must still comply with various terms and statutes. Plus, with remote work becoming increasingly popular, there’s a range of new and developing rules to follow before employing workers in the Isle of Man, depending on where they perform most of their work.

So, to guarantee a seamless integration and expansion of your workforce into the Isle of Man, it’s recommended to outsource your international employment needs to an employer of record (EOR) like TopSource Worldwide.

Interested in growing your team in the Isle of Man or another global location? Discover our comprehensive EOR services and find out how we can ease logistical burdens throughout your business growth.

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Published On: July 19th, 2022Last Updated: August 4th, 2022

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About the Author: Sam Barnes

Sam is our Global Business Development Manager for Employer of Record services. For the last 10 years, he has assisted companies in the successful execution of their international expansion plans. Sam tells us “There’s something inherently exciting about growing a business into overseas jurisdictions. Each country does things slightly differently and it’s great to be able to share learnings on statutory requirements and cultural nuances”. Email: sam.barnes@topsourceworldwide.com