Employer of Record Services for the UK

Employing in the UK

Encompassing four nations and many regions (and just as many different dialects!), the UK has a rich history and varied landscape, yet a distinctly cosmopolitan vibe — with much more to offer than just rolling countryside, tea, and Sunday roasts. Home to the fifth largest economy in the world, the UK is the perfect place for businesses looking to expand their international hubs. London, the UK’s capital, has excellent connections to Europe and Asia, which could provide further expansion opportunities. But the other major cities also have great transport links and plenty to offer businesses across various sectors.

The UK is arguably also one of the easiest places in the world to start a business — with fewer regulations than many other countries — and is regularly ranked as one of the top locations for organisations looking to expand overseas. For one, English has become the international language of business, making it much easier for new companies to adapt. The strong market also offers a wealth of opportunities, and the regulatory system is open and transparent. Business-friendly incentives, such as low corporation tax and tax relief to encourage investment, also make the UK an attractive target for ambitious companies.

Our Expertise

Managing a global workforce in the UK

Managing a workforce in the UK requires adherence to specific employment laws and regulations. TopSource Worldwide helps businesses ensure compliance with the UK's labour laws, including the Employment Act, Central Provident Fund (CPF) contributions, and the Personal Income Tax Act. Our tailored solutions that align with the unique requirements of businesses operating in the UK, providing support for seamless payroll management, adherence to local regulations, and efficient handling of employment-related matters.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

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”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

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”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in the UK

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in the UK. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your UK-based employees.

End-to-end UK payroll services

Looking to expand into the UK? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your UK expansion initiatives.

Global entity management

Venturing into the UK market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in the UK

Entering the UK market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in the UK.

Start your UK expansion

UK Insights

Key insights into the UK's landscape

VAT rates: The United Kingdom has a standard VAT rate of 20%, with reduced rates of 5% and 0% for specific goods and services.

Ease of Doing Business rank: The UK ranks 8th in the World Bank's Ease of Doing Business Index, showcasing a highly favourable business environment.

Consumer Confidence Index: As of 2022, the UK's Consumer Confidence Index was 94.1, reflecting stable economic sentiment.

Employee maternity/paternity leave: Maternity leave is 52 weeks, with 39 weeks paid; paternity leave is up to 2 weeks, emphasising work-life balance and parental support.

Employee termination period: Standard notice for termination varies but is typically one week to three months, depending on employment contract terms and duration.

Employee salary pay date: Wages are usually paid monthly, with specific pay dates outlined in employment contracts and subject to labour laws.

Bank holidays: The UK observes public holidays, including New Year's Day, Good Friday, and Christmas, with a total of 8 public holidays in England and varying totals in Scotland, Wales, and Northern Ireland.

An Overview of the Statutory Provisions

Salary

Salary in the UK is paid in 12 equal instalments throughout the year.

There’s no requirement to include variable salary in the contract of employment, and we would discourage against this being included.

Social security

Social Security Tax (National Insurance Contributions) is deducted at source from the employee’s salary (subject to minimum qualifying salary thresholds) and is paid directly to Her Majesty’s Revenue & Customs (HMRC).

Withholding tax is also deducted at source, and both these elements are paid in one payment monthly to HMRC.

Employer costs

Employers are also required to pay National Insurance Contributions. These are payable at 13.8% of the gross monthly salary, less a monthly threshold (Tax Year 2021/22 = £8,840/12 = £737). These costs are triggered when processing UK payroll and payable to HM Revenue & Customs (HMRC).

Statutory Benefits

Statutory benefits in the UK include:

State retirement pension
Maternity/paternity pay
Shared parental leave
Statutory sick pay

Pension

In addition to the state pension, all employers are now required to register eligible employees into an auto-enrolment pension scheme (TopSource Worldwide works with The Pension People).

Current statutory minimum contributions are a total of 8% (5% employee contribution/3% employer contribution). However, employers can choose to pay more than the statutory minimum. This would have the effect of reducing the contribution payable by the employee (a total of 8% being required).

Employees can opt out of the scheme, but TopSource Worldwide has an obligation to register all eligible employees during the first payroll.

Statutory Sick Pay

For statutory sick pay, there’s a qualifying period of four or more days in a row (including non-working days). This is paid by the employer for up to 28 weeks. Qualification criteria apply.

The current weekly eligible amount payable to employees is £96.35 per week.

Occupational Sick Pay

TopSource Worldwide can tailor increased coverage for your employees if you wish.

Notice periods

The statutory minimum notice periods which employees are entitled to are as follows:

During probationary period — 1 week
End of probationary period <5 years’ service — 1 month
5 or more years’ service — 1 week per completed year of service up to a maximum of 12 weeks

Additional benefits

Additional benefits include private medical insurance and life assurance.

Private medical insurance (AXA PPP). This can be extended to employees as part of their contractual offering — either the single premium only or with an option to add spouse/partner only and/or family. It’s customary for the employer to meet the cost of the single premium and to ask employees wanting to add either their partner/spouse and/or family to meet the additional cost as a net contribution from their salary. This policy is classed as a ‘benefit-in-kind’, and the employee will be taxed on the benefit.

The employer will also be liable for additional 1A contributions on the benefit value provided (13.8%), which are payable annually following the submission of an annual P11D for expenses and benefits. Premium costs are age-related and increase with age.

Life Assurance. TopSource Worldwide provide this as standard for all UK employees meeting the qualifying criteria for a fixed amount of £100,000. There’s no benefit-in-kind implication as the cost is met in full by TopSource Worldwide.

Holiday entitlement

UK statutory annual entitlement is 28 days (20 days’ annual leave plus 8 public holidays/10 public holidays in Scotland).

It’s not uncommon in the UK to provide up to a total of 33 days’ leave (25 annual plus 8/10 public holidays).

Statutory/Public Holidays in UK & Scotland

See all public holidays

Date

Holiday

1 January

New Year’s Day

2 January

2nd January (Scotland Only)

Varies

Good Friday

Varies

Easter Monday

First Monday of May

Early May Bank Holiday

Last Monday of May

Spring Bank Holiday

First Monday in August

Summer Bank Holiday (Scotland Only)

Last Monday in August

Summer Bank Holiday (Excluding Scotland)

30 November

St Andrew’s Day (Scotland Only)

25 December

Christmas Day

26 December

St. Stephen’s Day/Boxing Day

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in the UK

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about UK employment solutions

What is an Employer of Record in the UK?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in the UK. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in the UK?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in the UK. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in the UK?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in the UK. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.