How to hire remote employees in

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

What to know before you hire in 

The United Kingdom

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.

If you want to successfully hire in 

The United Kingdom

, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in 

The United Kingdom

. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in 

The United Kingdom

 is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Why hire independent contractors in 

The United Kingdom

Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in 

The United Kingdom

.

It’s the fastest way to hire globally

Hiring employees takes months, at the minimum. When you hire with Panther’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 Panther, then $49 per month to hire your contractors with Panther. 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

Hiring contractors in 

The United Kingdom

 means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

It’s less risky than hiring employees

Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.

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.

How can I pay people in 

The United Kingdom

?

If you’re hiring contractors in 

The United Kingdom

, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

Hiring and paying your team in 

The United Kingdom

Hire and pay with Panther

Pay everyone with a single click
Get great currency conversion rates
Pay $0 in platform fees
Run payroll in seconds
Let Panther automatically create & store invoices
Let Panther automatically write locally-compliant contracts
Let Panther automatically file local tax documents

Hire and pay without Panther

Pay all your contractors individually
Do all currency conversions yourself
Shoulder the burden of platform fees
Spend hours each month making payments
Manually track & store invoices
Manually write & sign contracts
Manually file relevant tax documents

Let Panther save you from hiring headaches.

Sign up today for $0

If you want to hire employees in 

The United Kingdom

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.

Taxes 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%

Leave

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

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.

Employee requirements in 

The United Kingdom

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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