Employer of Record (EOR) serves as a comprehensive solution for hiring local employees in the UK without the need to establish a financial commitment with a UK-based company. Each country operates under a unique set of business laws and regulations, creating a complex environment, especially for small- and medium-sized businesses looking to expand globally. Setting up offices in a foreign country like the UK and managing all the necessary legal and administrative procedures can be a daunting task. However, this process can be significantly streamlined with the assistance of a top-tier Employer of Record UK solution, such as Marzuna.
Our organization offers access to a range of online tools that facilitate your company’s hiring of remote workers, simplify complex legal compliance requirements, and handle administrative tasks like payroll, visa processing, and more through an automated, high-tech solution. If you want to discover the advantages of choosing Marzuna as your EOR in the UK, don’t hesitate to schedule a demo with us.
The UK is an enticing destination for individuals looking to expand their businesses internationally, given its status as one of the world’s most developed global economies. English is the primary language, eliminating language barriers, and the country boasts a high standard of living. It ranks fifth in total imports and tenth in total exports globally. However, certain employment challenges, including those stemming from Brexit, may pose discouragements, especially for small and medium-sized enterprises and startups.
For many businesses seeking to hire workers in the UK, finding the right candidates is a time-consuming process. Traditional hiring procedures, such as conducting interviews, onboarding, obtaining permissions, and securing visa approvals, can be especially time-intensive, particularly for organizations not well-versed in UK labor regulations. Opting for an Employer of Record (EOR) in the UK is a wise choice. An EOR based in the UK takes charge of the end-to-end employment processes, including payroll, taxation, visas, benefits, leaves, and more, which greatly streamlines outsourcing-related constraints.
| United Kingdom Labour law | It is required to have a comprehensive employment contract under UK labour law. Every aspect of the job conditions, such as compensation, working conditions, pay, and salaries, should be covered in the contract. | |
| Statutory Working hours | A maximum of 40 hours spread over 5 days, with the option to split the time between Monday through Friday during the workweek. Employees may, however, deliberately opt to labour past these restrictions. | |
| Overtime Eligibility | Only if their contract permits, employees may put in extra time. No one may be required to work more than 48 hours a week on average. Unless otherwise specified in the contract, companies typically do not pay overtime, as long as the employee’s average salary does not fall below the National Minimum Wage. The contract should specify that employees may be entitled to “Time off in lieu” of overtime labour. | |
| Paid Public Holidays | There are eight public holidays in the UK:
Employers are not required to provide these days off, though. Employers have the option of either including bank holidays in the required yearly leave package or not including them as part of paid vacations or holidays. Therefore, if an employee works on one of these eight public holidays, they are not entitled to overtime compensation. |
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| Compensation & Bonus | The hourly minimum wage ranges from £6.56 to £8.91. The age of the employee affects the pay. In addition, although it is not required, the Living Wage Foundation in the UK has established a better living wage for workers, and the majority of firms in the UK adhere to it.
The UK wage structure does not require bonuses, and they are entirely up to the employer’s choice. Bonus payments are given to certain industrial sectors including engineering, R&D, science, public service, media, and technology. Bonuses are also frequently given to people in certain positions, like directors and senior managers. |
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| Employee Health Coverage | In the UK, a type of tax known as National Insurance Contributions (NICs) is gathered to pay for employee health benefits. The contribution is made up of both employer and employee contributions. In addition to the federal scheme, employers can provide their employees with extra health benefits. Business organisations may provide their employees with supplemental health benefits at very low costs with the aid of the Employer Of Record UK solution. | |
| Employee Protection and Anti-discrimination Rights | In terms of hiring, firing, compensation, benefits, training, redundancy, promotions, transfers, and employment terms and circumstances, this legislation provides protection from workplace discrimination. This legislation forbids employers from treating employees unfairly on the grounds of their marital status, age, gender identity or expression, pregnancy, handicap, race, colour, national origin, ethnicity, or sexual orientation. | |
| Confidentiality of Personal Information | The Data Protection Act of 2018 safeguards personal information in the UK. The General Data Protection Regulations (GDPR) are put into effect in the UK by this Act. The legitimate and ethical use of personal data is governed by six data protection principles. The principles also stipulate that the data shall be utilised accurately, relevantly, and for a clear purpose. When no longer necessary, outdated data should be erased. Organisations must manage data securely to prevent loss and harm from unauthorised access. |
| Employment Rights Act 1996 | mentions an employee’s rights about termination and time off. |
| National Minimum Wages Act 1998 | mentions the minimum wage, which the government routinely reviews. |
| Employment Relations Act 1999 | establishes trade union recognition |
| Maternity and Parental Leaves etc. Regulations 1999 | States maternity and paternity-related leaves |
| Part-time employees (Prevention of Less Favourable Treatment) Regulations 2000 | UK firms need to treat their part-time employees equitably with full-timers. |
| The Equality Act 2010 | Discusses discrimination at the workplace and during recruitment. |
| IR35 | It is tax law that enables individuals to reduce taxes by working as disguised workers. Although they are paid by limited corporations, they work and behave like workers. |
A clear distinction exists between a contractor and a full-time employee in the UK. Full-time employees under an employer enjoy various statutory benefits, such as sick pay, maternity and paternity leave, notice periods, legal protection against wrongful termination, redundancy compensation, and the right to request flexible work arrangements. On the other hand, contractors may be self-employed, work for an agency, or engage with clients on a project-specific basis. They typically operate their own businesses, handle their tax affairs, and are not considered employees. It is essential to accurately classify workers to ensure compliance with legal obligations and avoid potential fines.
When making hiring decisions, it’s prudent to consider recruiting full-time employees for long-term positions, while contractors may be better suited for temporary or seasonal roles, especially when they are not involved in core business functions. This approach helps maintain legal compliance and maximizes workforce flexibility.
Many multinational corporations have traditionally opted to establish branch offices or subsidiaries in the UK to expand their workforce. However, this approach can be time-consuming and potentially hinder your long-term goals while significantly increasing your costs. As an alternative, consider using UK job search engines or online recruitment platforms like Indeed, Reed, Monster, Glassdoor, CV-Library, WikiJob, Adzuna, LinkedIn, and more. These platforms have gained credibility due to the high-quality talent they offer, but it’s essential to be aware of their limitations.
A growing alternative strategy is to leverage an Employer of Record (EOR) service in the UK. With this innovative approach, you can hire both full-time employees and independent contractors under your banner and assign them tasks in line with their UK employment contracts. Our advanced software platform streamlines the recruitment process for both types of workers, providing you with the necessary data to make informed hiring decisions. With our company’s support, you can streamline your UK employment needs and focus on your core business objectives. Discover more about how we can help you achieve your goals today.
Three months is the customary probationary term in the UK, especially if the relocation is internal. However, from the date of joining, the standard probationary term is six months. Please be aware that in the UK, probation is not governed by statute law.
The employment contract is terminated or ended when the employer does so. In the event of a termination, the employer is required to provide the employee with the greater of the statutory notice requirement or the amount specified in the contract. There are, however, some situations in which the worker may be let go immediately. According to the law, employers are required to provide the cause for your dismissal and the explanation for it within 14 days after requesting you to leave.
You may accomplish all of your aims for your worldwide expansion with the assistance of our experience and its strong global employment platform.
Employing an Employer of Record (EOR) service is a strategic decision for companies seeking rapid and efficient expansion in the UK. With our service, international businesses can swiftly identify top candidates for their teams, facilitate seamless onboarding for new hires, and save up to 85% on hiring and onboarding costs.
Our comprehensive system covers everything, including employment contracts, payroll processing, income tax management, statutory benefits integration, and general HR administration. With automated processes, digital signatures, employee payroll management, contractor payouts, and a variety of compliance solutions, our platform serves as a one-stop employment gateway.
Before utilizing our EOR solution, businesses should be aware of our general terms of service. Foreign companies are exempt from the 7% GST tax that UK businesses must add to all invoices. The minimum service period is three months, and payments are accepted only in British Pound Sterling.
For UK nationals, we require specific information and documentation, including personal details, a copy of their passport, bank information, a copy of their NRIC (for permanent residents), and a job description, to ensure a smooth onboarding process. For overseas hires, additional paperwork is necessary, such as personal details, job descriptions, educational and technical qualifications, CVs, passport and ID copies, bank account information, photographs, police clearance certificates, and medical examination results.
Outsourcing employment through an EOR is a strategic move when your company aims to expand its presence in the UK. It’s essential to weigh your options and make a well-informed decision. Building a subsidiary from scratch and handling all functions, from recruitment to payroll management, can be a time-consuming and complex process. This is where employment outsourcing through an EOR can be highly valuable. An EOR will oversee all aspects of the employee lifecycle, not just recruitment and payment. We provide the same service, offering remote solutions so you can focus on your core business operations while our integrated platform handles the entire employee lifecycle, from hiring to termination.
It is crucial for your company to have the proper staff if you want to grow, especially if you plan to expand to the UK. You have the option of hiring a reliable Employer Of Record UK to handle the visa application on your behalf or moving your internal employees to the UK.
The Points Based System (PBS) is the foundation of the UK work visa. Candidates must submit an application for one of the five levels of work visas. There are certain privileges, conditions, and admission criteria for each tier. Here are the several types of work visas available in the UK:
| Tier 1 | For business owners, investors, and workers with high levels of education outside the EEA and the EU. |
| Tier 2 | for highly qualified workers from outside the EEA. Professional athletes are included in this category. |
| Tier 3 | For low-skilled employees usually looking for temporary work outside the EU. |
| Tier 4 | for non-EEA students who are 16 years old or older. |
| Tier 5 | There are six tiers for temporary workers. |
Depending on the tier type, there may be different procedures for getting work visas in the UK. All visas require sponsorship from an employer or sponsor. A completed application form, two coloured pictures, a current passport, documentation of housing and financial support, test results for tuberculosis, a trip itinerary, payment of the required visa costs, and the provision of biometric data are often required. Additionally, depending on the applicant’s region and desire, all submitted papers must be translated into either Welsh or English. It is crucial to thoroughly analyse the tier type’s unique requirements to make sure that all required evidence is submitted; otherwise, the application risks being turned down.
In order to work in the UK, non-EU citizens must get a work permit. A UK-based licensed corporate business organisation must sponsor the permit. Additionally required is a Certificate of Sponsorship from the UK government. The General Work Visa or the Tier 2 Visa is often the appropriate UK work permit for foreign nationals. Only Tier 1 candidates are eligible to submit an application for an unsecured UK work visa. According to UK legislation, a third-party organisation, such as an EOR, is not permitted to sponsor work visas. However, in order to get UK work permits as efficiently and in accordance with the UK immigration system as possible, our high-tech platform and knowledge can be of tremendous assistance.
It is crucial to guarantee full compliance with the local rules on payroll & taxes in the UK, regardless of whether you recruit local British workers or move specialists from your nation. Managing all of these legalities may be a time-consuming and difficult process for foreigners, which is why it is beneficial to work with a local expert in payroll outsourcing in the UK.
Employee Taxation
The amount that the employee’s income exceeds their personal allowance determines how much income tax they will pay. In the UK, the regular Personal Allowance is $12,570. Employees who claim both the Blind Person’s Allowance and the Marriage Allowance will get a greater allowance. The Personal Allowance is smaller if the income is greater than £100,000 per year.
for a worker receiving a £12,570 basic stipend.
Employer Taxation
The Her Majesty’s Revenue and Customs (HMRC) PAYE system must be used by UK employers. The collection of national insurance and income tax is handled by this system. When paying workers, deductions must be made for things like salary, wages, bonuses, gratuities, maternity pay, statutory sick pay for PAYE, etc.
| Tax | Explanation |
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| Employer Taxation | Tax explanation contribution to Social Security 12% on weekly salary (GBP 183.01 to GBP 962) |
| Contribution to the social security system | 13.8% on a weekly salary |
| Corporate Income Tax | 19% |
Employers who administer their own payroll must notify the HMRC of employee payments and deductions just before payroll. Employees must submit another report in the event of any reduced claims. All of this is handled on your behalf by a team of experts with an EOR solution.
Although it’s customary to give employees both cash and non-monetary incentives, it’s not required by law.
To establish a UK subsidiary for your company, you must ensure that the subsidiary is constituted in compliance with UK company formation requirements. Creating a Sole Director subsidiary is one option; this requires providing addresses for the registered office, service, and dwelling. In less than a day, Companies House often responds to confirm the foundation of the subsidiary. It is important to keep in mind that the UK provides a range of commercial alternatives and organisational structures, and that changes to the subsidiary’s form are allowed after incorporation. The Employer of Record UK solution can assist you in meeting your HR needs without establishing a subsidiary or holding company in the UK if navigating these options sounds challenging.
