Employer of Record in United Kingdom
Hiring in United Kingdom at a glance
Hiring in the United Kingdom
The United Kingdom is a global economic hub and one of the world’s most attractive destinations for international expansion. With leading industries in financial services, technology, life sciences, media, and advanced manufacturing, the UK offers access to highly skilled professionals across diverse fields. London is a world leader in fintech and banking, Cambridge and Oxford excel in biotech and R&D, while Manchester, Edinburgh, and Birmingham are thriving hubs for technology and creative industries.
The UK’s workforce is among the most educated globally, with world-renowned institutions such as Oxford, Cambridge, and Imperial College London producing top-tier graduates. Its multicultural environment also attracts skilled talent from across Europe and the world, making it a truly international labor market.
At the same time, hiring in the UK requires navigating strict labor and tax regulations, including compliance with UK employment law, PAYE payroll taxes, National Insurance contributions, and statutory benefits such as pensions, annual leave, and sick pay. Employers must also be mindful of IR35 rules on contractor classification, which carry significant misclassification risks.
Setting up a legal entity in the UK can take several weeks, requiring incorporation with Companies House, registrations with HMRC, and compliance with ongoing reporting obligations. For many companies, an Employer of Record (EOR) is the fastest way to expand into the UK market. With Gloroots as your EOR, you can hire employees in the UK in just weeks while we manage payroll compliance, employee benefits, and global compliance.
What are the key facts about the United Kingdom’s economy and workforce?
The United Kingdom has the 6th largest economy in the world, with strengths in financial services, technology, healthcare, advanced manufacturing, creative industries, and education. London is one of the world’s leading financial centers, home to global banks, fintech startups, and venture capital firms. Beyond London, cities like Manchester, Birmingham, Edinburgh, and Bristol are thriving hubs for digital innovation, engineering, and life sciences.
The UK workforce is highly educated, with over 50% of adults holding tertiary qualifications. Prestigious institutions such as Oxford, Cambridge, and the London School of Economics (LSE) fuel the talent pipeline, while the country’s globalized labor market continues to attract international professionals. The UK is also a leader in AI, biotech, and fintech, supported by government-backed innovation programs.
For employers, the UK offers deep talent pools but also complex compliance obligations. Employers must manage PAYE (Pay As You Earn) income tax, National Insurance contributions (NICs), pension auto-enrolment, and statutory leave entitlements. In addition, the IR35 rules on contractor classification have increased compliance risks for companies relying on independent contractors. Many businesses use an Employer of Record (EOR) to simplify hiring and avoid misclassification risks.
Data Snapshot: UK Workforce
Ready to tap into the UK’s world-class workforce? Hire employees in the UK with Gloroots and ensure full global compliance from day one.
What is the work culture and talent pool like in the United Kingdom?
The United Kingdom’s workplace culture balances professionalism, individual accountability, and collaboration. While traditionally hierarchical, many modern UK workplaces have adopted flatter, team-oriented structures, particularly in tech and creative industries. Employees value work-life balance, fairness, and flexibility, with hybrid and remote work arrangements becoming widespread since the pandemic.
The UK workforce is highly multicultural and international, reflecting the country’s role as a global business hub. English is the business language, but employers benefit from access to multilingual talent, especially in London and other major cities.
White-collar professionals in the UK excel in finance, technology, biotech, life sciences, media, and advanced manufacturing. London is a global leader in banking, fintech, and AI, while Cambridge and Oxford drive R&D and biotech innovation. Manchester and Birmingham have become hubs for digital industries, advanced manufacturing, and logistics, and Edinburgh is renowned for finance and gaming.
Employers looking to attract top UK talent should offer competitive packages, including employee benefits beyond statutory minimums, flexible working options, and clear career progression.
Data Snapshot: UK Talent Pool
Looking to access the UK’s diverse and world-class talent pool? Hire employees in the UK with Gloroots and ensure fast, compliant onboarding.
Q: What is the process of setting up an entity in the United Kingdom?
Setting up a legal entity in the UK is relatively straightforward compared to many markets, but it still involves multiple registrations and ongoing compliance. The most common structure is a Private Limited Company (Ltd), which requires incorporation with Companies House, registrations with HMRC, and compliance with employment law, PAYE, and National Insurance Contributions (NICs).
The incorporation process typically takes 1–4 weeks, but payroll, tax, and employment compliance can add further delays. Employers must also comply with pension auto-enrolment rules, statutory benefits, and contractor classification laws (notably IR35).
For companies testing the UK market or hiring small teams, entity setup can be resource-intensive. By contrast, Gloroots as an Employer of Record (EOR) enables you to hire employees in the UK in as little as 2–4 weeks, while we manage payroll, contracts, benefits, and compliance.
Step-by-Step Process of Entity Setup in the UK
- Choose a Business Structure
- Most foreign companies choose a Private Limited Company (Ltd).
- Alternatives: UK branch office or partnership.
- Register with Companies House
- Submit company name, directors, shareholders, and Articles of Association.
- Obtain a Business Bank Account
- Required to process payroll and corporate transactions.
- Register with HMRC
- For Corporation Tax, VAT (if applicable), and PAYE payroll deductions.
- Employer Registrations
- Register as an employer with HMRC for PAYE and NICs.
- Set up pension auto-enrolment for employees.
- Compliance Setup
- Draft compliant employment contracts.
- Ensure compliance with working hours, minimum wage, and statutory benefits.
- Ongoing Reporting
- Annual returns to Companies House.
- Quarterly VAT and payroll filings with HMRC.
Entity Setup: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK is a business-friendly market, but direct entity setup still requires multiple registrations, ongoing filings, and compliance with employment and tax laws.
With Gloroots as your EOR in the UK, you can:
- Hire employees within weeks, not months.
- Avoid the cost and complexity of entity setup.
- Ensure compliance with PAYE, NICs, and statutory benefits.
Gloroots makes hiring in the UK fast, compliant, and flexible.
Q: What are the main benefits of using Gloroots as an Employer of Record in the UK vs setting up your own entity?
Expanding into the UK presents opportunities but also compliance complexity. Setting up a local entity requires incorporation with Companies House, employer registration with HMRC, and full compliance with PAYE payroll, National Insurance contributions (NICs), pension auto-enrolment, and statutory benefits. In addition, employers must monitor compliance with working hours, minimum wage laws, and IR35 contractor classification rules.
While direct setup offers long-term independence, it is time-consuming, resource-heavy, and best suited for businesses planning large-scale operations. For companies testing the UK market, hiring small teams, or needing quick entry, it can become an unnecessary burden.
By contrast, Gloroots as an Employer of Record (EOR) allows you to hire employees in the UK within weeks. Gloroots becomes the legal employer, handling payroll management, employee benefits, and compliance with UK labor laws, while you maintain full control over employee responsibilities and performance.
Direct Entity vs Gloroots EOR (UK)
Why This Matters
UK compliance requires employers to manage tax registrations, payroll filings, pensions, and employment contracts. This creates administrative overhead and financial commitment before testing the market.
With Gloroots as your EOR in the UK, you can:
- Hire employees in weeks without entity setup.
- Stay fully compliant with PAYE, NICs, pensions, and IR35.
- Budget with confidence through a predictable monthly fee.
Gloroots provides a faster, simpler, and lower-risk path to hiring in the UK.
Q: What are the key employment laws in the UK that employers should know?
Employment in the UK is governed by a robust legal framework that protects workers’ rights and sets clear employer obligations. Employers must issue written contracts, comply with working time regulations, pay at least the National Minimum Wage or National Living Wage, and provide statutory leave entitlements. Employers must also manage PAYE (Pay As You Earn) income tax, National Insurance Contributions (NICs), and mandatory pension auto-enrolment.
The UK also enforces strict rules around employee classification (IR35) to prevent misclassification of contractors. Failure to comply with employment laws can result in financial penalties, claims for unfair dismissal, and reputational risks. With Gloroots as your EOR, you avoid these risks — we issue compliant contracts, manage payroll, and administer statutory benefits on your behalf.
Key Employment Law Provisions in the UK
- Employment Contracts
- Must be issued within 2 months of employment start date.
- Should outline wages, hours, leave entitlements, and termination terms.
- Working Hours
- Standard: 48 hours/week average (over a 17-week period).
- Employees may “opt out” of the 48-hour cap voluntarily.
- Overtime
- No statutory overtime rate — but pay cannot fall below the minimum wage.
- Overtime pay rules are set by contract or collective agreements.
- Minimum Wage (April 2023 rates)
- National Living Wage (23+): £10.42/hour.
- 21–22 years: £10.18/hour.
- 18–20 years: £7.49/hour.
- Under 18: £5.28/hour.
- Apprentices: £5.28/hour.
- Maternity & Paternity Leave
- Maternity: Up to 52 weeks (39 weeks statutory pay if eligible).
- Paternity: 2 weeks paid leave.
- Shared parental leave available.
- Annual Leave
- At least 28 days (5.6 weeks) paid leave per year (includes public holidays).
- Sick Leave
- Statutory Sick Pay (SSP): £109.40 per week (as of 2023), payable for up to 28 weeks.
- Pension Auto-Enrolment
- Mandatory employer contributions: 3% of qualifying earnings.
- Employee contributions: 5%, with tax relief.
Employment Law Compliance: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK has one of the most comprehensive employment law frameworks in Europe, with strong employee protections. Non-compliance risks fines, disputes, and reputational damage.
With Gloroots as your EOR in the UK, you can:
- Guarantee compliant employment contracts.
- Ensure correct wages, leave, and pension contributions.
- Avoid IR35 and employee misclassification risks.
Gloroots makes UK employment law compliance seamless and low-risk.
Q: What are the types of work visas in the UK, and how can Gloroots help with immigration?
Narrative Overview
Post-Brexit, the UK has implemented a points-based immigration system that applies equally to EU and non-EU nationals. This system requires foreign workers to obtain a sponsored work visa based on skills, salary thresholds, and job eligibility. While the UK remains one of Europe’s largest talent destinations, hiring foreign employees requires navigating complex immigration processes with the UK Home Office.
Employers must be approved as licensed sponsors to issue Certificates of Sponsorship (CoS). This adds significant cost, compliance obligations, and administrative burden. Mistakes in visa sponsorship can lead to refusals, fines, or loss of sponsorship license.
With Gloroots as your Employer of Record (EOR), immigration becomes simpler. Gloroots acts as the legal employer, handling visa sponsorship, compliance monitoring, and renewals. This allows you to access skilled talent in the UK without first applying for a sponsorship license.
Common Work Visa Types in the UK
- Skilled Worker Visa
- For workers with a confirmed job offer from a licensed sponsor.
- Requires meeting salary and skill thresholds.
- Global Talent Visa
- For leaders or potential leaders in research, science, engineering, humanities, arts, or digital technology.
- Endorsed by UK research bodies or tech associations.
- Health and Care Worker Visa
- For qualified doctors, nurses, and social care professionals.
- Reduced fees and fast-tracked processing.
- Intra-Company Transfer (ICT) Visa
- For multinational employees transferred to a UK branch.
- Graduate Visa
- For international students who completed a UK degree, allowing up to 2 years of post-study work.
- Start-up and Innovator Founder Visas
- For entrepreneurs establishing innovative businesses in the UK.
How Gloroots Supports Immigration
- Visa Sponsorship: Acts as the legal employer, sponsoring Skilled Worker and other eligible visas.
- Compliance with Home Office Rules: Ensures sponsorship duties, right-to-work checks, and reporting obligations are met.
- Visa Renewals & Extensions: Tracks visa expiry dates and manages renewal filings.
- Employee Mobility: Supports international relocations and intra-company transfers.
- Integration with EOR: Combines immigration with payroll, HR compliance, and employee benefits for seamless operations.
Why This Matters
The UK’s points-based immigration system is stringent and expensive, requiring companies to be licensed sponsors. Without this license, employers cannot hire foreign workers directly.
With Gloroots as your EOR in the UK, you can:
- Access global talent without needing a sponsorship license.
- Ensure full compliance with UK Home Office immigration rules.
- Simplify visa processing, renewals, and employee onboarding.
Gloroots makes immigration to the UK compliant, cost-efficient, and streamlined.
Q: What are the risks of misclassification in the UK?
In the UK, employee vs. contractor classification is one of the most critical compliance issues for employers. The IR35 legislation (also known as the “off-payroll working rules”) was introduced to prevent companies from treating employees as contractors to avoid paying PAYE income tax and National Insurance Contributions (NICs).
If a contractor is deemed to be working like an employee — e.g., under company supervision, using company equipment, or working exclusively for one employer — HMRC may reclassify them as an employee. This creates liability for backdated taxes, unpaid NICs, pension contributions, and potential fines.
The rules are complex, with responsibility for determining IR35 status often shifting to the hiring company. Misclassification can also trigger reputational risks and employment law disputes.
With Gloroots as your Employer of Record (EOR), companies eliminate misclassification risks. Gloroots ensures workers are classified correctly, issues compliant contracts, and manages PAYE and NIC contributions in line with UK law.
Criteria That Trigger Misclassification (IR35)
A contractor may be reclassified as an employee if:
- They work under the direct supervision and control of the company.
- They cannot send a substitute to perform their work (lack of substitution rights).
- They use company equipment and systems.
- They are integrated into the business (e.g., appear on org charts, attend internal meetings).
- They work on a continuous basis rather than project-specific tasks.
- They receive benefits similar to employees.
Penalties for Misclassification in the UK
- Backdated PAYE & NICs: Employer liable for unpaid income tax and contributions.
- Interest & Penalties: HMRC imposes fines for late or incorrect filings.
- Pension Contributions: Employers may owe unpaid pension auto-enrolment amounts.
- Legal Claims: Misclassified workers may sue for employee benefits such as holiday pay or redundancy.
- Reputational Risk: HMRC investigations are public and may damage brand credibility.
Misclassification Risk: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK’s IR35 regime is one of the strictest globally. Misclassification leads to heavy tax liabilities, legal claims, and reputational risk.
With Gloroots as your EOR in the UK, you can:
- Avoid IR35 risks entirely.
- Ensure every worker is classified correctly.
- Protect your business from HMRC penalties and backdated tax bills.
Gloroots makes hiring in the UK safe, compliant, and dispute-free.
Q: How does an EOR help you run payroll in the UK?
Payroll in the UK is regulated by HMRC (Her Majesty’s Revenue & Customs) under the PAYE (Pay As You Earn) system. Employers must deduct income tax and National Insurance Contributions (NICs) directly from employee salaries, submit real-time payroll reports (RTI) to HMRC, and ensure compliance with pension auto-enrolment rules.
UK payroll must also account for Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), and holiday accruals, all of which have strict eligibility and payment rules. Employers that fail to comply with RTI submissions or underpay contributions face penalties, fines, and interest charges from HMRC.
With Gloroots as your Employer of Record (EOR), payroll compliance becomes seamless. Gloroots manages PAYE deductions, employer NICs, pension contributions, and statutory leave payments — ensuring full alignment with UK employment law and tax regulations.
Key Payroll Compliance Requirements in the UK
- Payroll Cycle: Monthly (most common); some employers use weekly or bi-weekly.
- PAYE System: Mandatory withholding of income tax and NICs.
- Real-Time Information (RTI): Employers must report payroll data to HMRC every pay cycle.
- National Insurance Contributions (NICs):
- Employer NICs: 13.8% above threshold.
- Employee NICs: 12%–2%, depending on income band.
- Pension Auto-Enrolment:
- Employer: 3% minimum contribution.
- Employee: 5% minimum contribution.
- Statutory Leave Payments:
- SSP: £109.40/week (up to 28 weeks).
- SMP: 90% of average earnings (first 6 weeks), then capped payments (33 weeks).
- SPP: 2 weeks at capped statutory rate.
- Payslips: Must be provided each pay period, detailing deductions and net pay.
Payroll Management: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK’s payroll system is strictly regulated and requires timely reporting, accurate deductions, and compliance with statutory benefits. Mistakes result in HMRC fines, employee dissatisfaction, and reputational damage.
With Gloroots as your EOR in the UK, you can:
- Run payroll with full PAYE and NIC compliance.
- Ensure timely RTI submissions and statutory leave payments.
- Deliver transparent, accurate payslips to employees.
Gloroots makes UK payroll accurate, compliant, and stress-free.
Q: How does tax compliance work in the UK?
Tax compliance in the UK is multi-layered, involving income tax, National Insurance Contributions (NICs), and pension obligations. Employers must operate through the PAYE (Pay As You Earn) system, deducting tax and NICs directly from employee wages and remitting them to HMRC (Her Majesty’s Revenue & Customs).
In addition to employee deductions, employers pay employer NICs, contribute to pension auto-enrolment, and ensure accurate Real-Time Information (RTI) submissions each payroll cycle. Companies that fail to comply face penalties, interest charges, and reputational damage.
With Gloroots as your Employer of Record (EOR), you avoid the complexity of UK tax compliance. Gloroots manages PAYE, NICs, pensions, and reporting, ensuring that employees are paid accurately and HMRC requirements are met.
UK Income Tax Brackets (2023/24)
Note: Scotland applies different income tax bands and rates.
National Insurance Contributions (NICs)
- Employer NICs: 13.8% on earnings above £9,100/year.
- Employee NICs:
- 12% on earnings between £12,570 and £50,270.
- 2% on earnings above £50,270.
Pension Auto-Enrolment Contributions
- Employer: Minimum 3% of qualifying earnings.
- Employee: Minimum 5% of qualifying earnings (with tax relief).
Tax Compliance: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK’s tax compliance system is strict, data-driven, and penalty-heavy. Employers must manage complex PAYE, NIC, and pension requirements while submitting accurate RTI filings.
With Gloroots as your EOR in the UK, you can:
- Guarantee accurate PAYE, NIC, and pension deductions.
- Avoid HMRC penalties for late or incorrect filings.
- Ensure employees receive correct payslips and year-end summaries (P60, P45).
Gloroots makes UK tax compliance simple, transparent, and risk-free.
Q: What benefits and entitlements do employees in the UK receive?
Employees in the UK are entitled to a wide range of statutory benefits under UK employment law. These include paid annual leave, sick pay, maternity/paternity leave, and pension auto-enrolment. Employers must also pay National Insurance Contributions (NICs) and administer statutory payments like Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), and Statutory Paternity Pay (SPP).
Beyond statutory entitlements, employers often provide supplemental benefits such as private health insurance, enhanced pension contributions, life insurance, wellness programs, and flexible working arrangements. These perks are increasingly expected in competitive industries like technology and finance, where talent retention is a priority.
With Gloroots as your EOR, you can offer both mandatory statutory benefits and competitive supplemental packages, ensuring your UK workforce remains compliant and engaged.
Statutory Benefits in the UK
- Annual Leave
- Minimum 28 days (5.6 weeks) of paid leave, inclusive of public holidays.
- Public Holidays
- 8 bank holidays in England & Wales; 9 in Scotland; 10 in Northern Ireland.
- Sick Leave
- Statutory Sick Pay (SSP): £109.40 per week (as of 2023) for up to 28 weeks.
- Maternity & Paternity Leave
- Maternity: Up to 52 weeks (39 weeks paid if eligible).
- Paternity: 2 weeks paid leave.
- Shared Parental Leave: Up to 50 weeks shared between parents.
- Pension Auto-Enrolment
- Mandatory employer contribution: 3% minimum.
- Employee contribution: 5% minimum (with tax relief).
- Other Family Leave
- Adoption leave: Up to 52 weeks.
- Parental bereavement leave: 2 weeks.
Supplemental Benefits (Market Practice)
- Private health insurance (commonly provided in finance, law, and tech).
- Enhanced pensions beyond statutory minimum.
- Life and disability insurance.
- Mental health and wellness programs.
- Flexible/hybrid working arrangements.
Benefits & Entitlements: Direct Entity vs Gloroots EOR (UK)
Why This Matters
UK employees expect strong benefits, combining statutory protections with supplemental perks. Employers must balance compliance with competitiveness in a global labor market.
With Gloroots as your EOR in the UK, you can:
- Guarantee compliance with all statutory benefits.
- Offer attractive supplemental benefits for talent retention.
- Streamline benefits administration across payroll and HR.
Gloroots ensures UK employees receive fair, compliant, and competitive benefits packages.
Q: What’s involved in hiring and onboarding employees in the UK?
Hiring in the UK is structured and regulated, with strict compliance requirements for employment contracts, payroll registration, and statutory benefits. Employers must provide a written statement of employment particulars (contract) within the first 2 months of employment, detailing salary, working hours, benefits, and termination terms.
Probation periods are common (typically 3–6 months) and allow flexibility in performance review and termination. All employees must be registered with HMRC under the PAYE system, with payroll deductions for income tax and National Insurance Contributions (NICs). Employers must also auto-enrol eligible employees into a workplace pension scheme.
Onboarding includes verifying the employee’s Right to Work (passport, visa, or residency status), collecting tax details, and ensuring statutory benefit registration. Employers also typically provide orientation on company policies, health & safety compliance, and IT/equipment setup.
With Gloroots as your Employer of Record (EOR), hiring and onboarding are fast and fully compliant. Gloroots issues UK-compliant contracts, registers employees with HMRC, administers pensions, and ensures smooth onboarding workflows.
Hiring & Onboarding Steps in the UK
- Employment Contracts
- Must be issued within 2 months.
- Should outline salary, probation, hours, and statutory entitlements.
- Probation Periods
- Commonly 3–6 months.
- Termination terms during probation are more flexible.
- Employee Documentation
- Proof of Right to Work (passport, residency card, visa).
- National Insurance (NI) number.
- P45 or P46 form for tax code setup.
- Payroll Registration
- Employer must register with HMRC under PAYE.
- Employees auto-enrolled into a workplace pension.
- Onboarding Orientation
- Company handbook & workplace policies.
- Health & safety training (mandatory in many sectors).
- IT/equipment setup and team integration.
Hiring & Onboarding: Direct Entity vs Gloroots EOR (UK)
Why This Matters
Hiring in the UK requires strict compliance with contract, payroll, and pension rules, alongside employee-friendly onboarding practices. Errors in documentation or payroll setup can delay hiring and trigger penalties.
With Gloroots as your EOR in the UK, you can:
- Hire employees in weeks with fully compliant contracts.
- Ensure payroll, tax, and pension registration are handled seamlessly.
- Deliver a professional and consistent onboarding experience.
Gloroots makes hiring in the UK fast, compliant, and employee-friendly.
Q: How do you successfully manage a workforce in the UK?
Managing a workforce in the UK requires a balance between compliance with employment law and fostering a culture that supports productivity and retention. Employers must comply with statutory requirements such as working hours, annual leave, pensions, and payroll taxes, while also navigating employee protections against unfair dismissal and discrimination.
Culturally, UK employees value fairness, transparency, and work-life balance. Hybrid and flexible work models are widely adopted, and employers that provide wellbeing programs, professional development opportunities, and competitive supplemental benefits are more successful at retaining talent.
Retention strategies also require attention to diversity and inclusion, as the UK workforce is highly multicultural and international. Employers that prioritize equal opportunities and career progression benefit from stronger employee engagement and loyalty.
With Gloroots as your Employer of Record (EOR), you gain local HR expertise to manage your UK workforce effectively. Gloroots ensures compliance with labor laws while supporting employers in offering competitive packages and building strong employee relations.
Best Practices for Managing a Workforce in the UK
- Ensure Compliance
- Adhere to working time regulations, PAYE, NICs, pensions, and statutory leave entitlements.
- Avoid IR35 misclassification risks when hiring contractors.
- Promote Work-Life Balance
- Flexible and hybrid work arrangements are standard.
- Encourage use of annual leave entitlements.
- Offer Competitive Benefits
- Go beyond statutory pensions and sick pay.
- Provide supplemental health insurance, life cover, or wellness benefits.
- Focus on Retention & Growth
- Provide training, upskilling, and career pathways.
- Create transparent performance review systems.
- Support Diversity & Inclusion
- Embrace multiculturalism and equal opportunity practices.
- Ensure compliance with Equality Act 2010 protections.
Workforce Management: Direct Entity vs Gloroots EOR (UK)
Why This Matters
The UK offers a skilled, multicultural, and highly educated workforce, but managing compliance alongside employee expectations can strain internal HR teams. Failure to comply with employment law can result in penalties and disputes, while poor retention strategies increase turnover costs.
With Gloroots as your EOR in the UK, you can:
- Guarantee compliance with UK labor and tax regulations.
- Provide employees with competitive benefits and career growth.
- Build a positive, inclusive workplace culture.
Gloroots makes workforce management in the UK compliant, employee-focused, and retention-driven.
Q: What are the key steps and requirements in terminating employees in the UK?
Termination in the UK is highly regulated, with strong employee protections against unfair dismissal under the Employment Rights Act 1996. Employers must follow fair procedures and comply with statutory notice periods, redundancy rules, and final settlement requirements.
During probation, termination is easier but must still respect contractual terms and cannot breach discrimination protections. For employees outside probation, lawful termination requires valid grounds (such as redundancy, misconduct, or capability issues), adherence to notice requirements, and in some cases, redundancy pay.
Failure to follow lawful termination procedures exposes employers to unfair dismissal claims, financial penalties, and reputational damage. With Gloroots as your EOR, you can ensure every termination is handled fairly, lawfully, and with correct settlements.
Key Termination Rules in the UK
- Notice Periods (statutory minimums; contracts may specify longer):
- 1 week: after 1 month’s continuous employment.
- 2 weeks: after 2 years of service.
- 1 additional week per year of service (up to 12 weeks).
- Probationary Termination
- Typically 3–6 months.
- Shorter notice applies if stated in the contract.
- Redundancy Pay (if employed for 2+ years):
- Half a week’s pay for each full year under age 22.
- 1 week’s pay for each full year aged 22–40.
- 1.5 weeks’ pay for each full year aged 41+.
- Statutory weekly pay is capped (set annually).
- Final Settlement
- Must include all outstanding wages, holiday pay, and redundancy/severance (if applicable).
- Unfair Dismissal Protections
- Employees with 2+ years of service can challenge dismissals as “unfair.”
- Employers must demonstrate fair process and lawful grounds.
Termination: Direct Entity vs Gloroots EOR (UK)
Why This Matters
UK law makes termination a structured, employee-protective process. Employers must respect notice, redundancy, and settlement obligations, or risk tribunal claims, fines, and reputational damage.
With Gloroots as your EOR in the UK, you can:
- Manage terminations lawfully and fairly.
- Guarantee correct notice, redundancy, and settlement payments.
- Avoid unfair dismissal claims.
Gloroots ensures employee exits in the UK are compliant, fair, and low-risk.
Q: What is the offboarding process in the UK?
Offboarding in the UK is a compliance-driven process that requires careful handling of final pay, benefits, and documentation. Employers must ensure that employees receive their final settlement, including outstanding wages, holiday pay, redundancy/severance (if applicable), and statutory entitlements.
Employers must also provide key documentation such as the P45 form (for tax records), pension transfer details, and written confirmation of employment termination. Company property (laptops, ID cards, devices) must be returned, and access to systems revoked.
Failure to follow proper offboarding procedures can expose employers to unfair dismissal claims, delayed HMRC filings, and employee disputes. With Gloroots as your Employer of Record (EOR), the offboarding process is handled in line with UK law, ensuring employees exit smoothly and compliantly.
Key Phases of the Offboarding Process in the UK
- Notice & Exit Confirmation
- Ensure contractual/statutory notice periods are met.
- Provide written confirmation of termination or resignation.
- Final Settlement
- Pay outstanding wages, accrued holiday pay, overtime, and redundancy/severance (if applicable).
- HMRC Reporting
- Issue P45 form to employee, detailing pay and tax deductions up to exit date.
- Submit Real-Time Information (RTI) final payroll report to HMRC.
- Pension & Benefits
- Provide pension transfer details or options.
- End or transfer supplemental benefits (e.g., health insurance, life cover).
- Exit Clearance
- Retrieve company property (laptops, ID cards, mobile devices).
- Revoke system and account access.
- Exit Documentation
- Provide a reference letter or certificate of employment (if requested).
Offboarding: Direct Entity vs Gloroots EOR (UK)
Why This Matters
Offboarding in the UK involves multiple compliance requirements — from HMRC tax filings to redundancy calculations. Errors or delays can lead to legal claims, HMRC penalties, or reputational harm.
With Gloroots as your EOR in the UK, you can:
- Guarantee timely, compliant settlements.
- Ensure correct HMRC, pension, and benefits reporting.
- Provide a smooth, professional exit experience.
Gloroots makes UK offboarding structured, compliant, and low-risk.
Q: What costs and financial planning do you need with an Employer of Record in the UK?
Expanding into the UK requires careful financial planning. Beyond salaries, employers must budget for National Insurance Contributions (NICs), pension auto-enrolment contributions, statutory leave payments, and redundancy obligations. Employers operating a direct entity must also account for incorporation fees, payroll setup with HMRC, legal compliance, and ongoing accounting costs.
On average, employer payroll contributions add 15–20% on top of gross salary, depending on earnings and pension arrangements. Redundancy pay can also become a significant liability for long-term employees.
With Gloroots as your Employer of Record (EOR), companies avoid upfront entity setup costs and instead pay a predictable monthly fee per employee. This fee covers payroll processing, NICs, pensions, statutory benefits, and compliance with UK employment law, enabling accurate budgeting and scalability.
Key Cost Considerations in the UK
- Entity Setup & Maintenance
- Incorporation with Companies House.
- Employer registration with HMRC (PAYE, NICs, pensions).
- Ongoing legal and accounting costs.
- Employer Contributions
- NICs: 13.8% on earnings above threshold.
- Pension Auto-Enrolment: 3% minimum employer contribution.
- Statutory Leave Costs
- Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), and Statutory Paternity Pay (SPP).
- Employers pay statutory amounts and reclaim limited costs in some cases.
- Redundancy Costs
- Required for employees with 2+ years of service.
- Calculated by age, tenure, and capped weekly pay.
- EOR Fees
- Predictable monthly fee per employee.
- Covers payroll, pensions, benefits, and compliance administration.
Costs: Direct Entity vs Gloroots EOR (UK)
Why This Matters
While the UK offers access to a world-class workforce, employers must plan for high payroll contributions, redundancy liabilities, and compliance costs. Direct entity setup creates additional overhead.
With Gloroots as your EOR in the UK, you can:
- Avoid upfront entity setup costs.
- Accurately budget with predictable monthly fees.
- Ensure compliance with payroll, pensions, and redundancy.
Gloroots makes financial planning in the UK transparent, scalable, and cost-efficient.
Q: What challenges might you face, and how do you solve them using an EOR in the UK?
The UK offers a highly skilled workforce and global business hub, but compliance and employment rules present significant challenges for foreign employers. Companies must navigate PAYE tax and NIC obligations, manage pension auto-enrolment, and comply with strict employment laws on contracts, termination, and redundancy.
One of the most complex issues is IR35 contractor misclassification, which exposes employers to tax liabilities and penalties if contractors are deemed employees. In addition, payroll must comply with Real-Time Information (RTI) reporting to HMRC, and errors in submissions result in fines. Redundancy and unfair dismissal protections add another layer of complexity.
With Gloroots as your Employer of Record (EOR), you can bypass these hurdles. Gloroots manages contracts, payroll, NICs, pensions, redundancy pay, and IR35 compliance, enabling fast and risk-free hiring in the UK.
Common Challenges & EOR Solutions in the UK
Why This Matters
The UK’s compliance framework — PAYE, NICs, IR35, redundancy law, and RTI reporting — creates complexity for global employers. Missteps result in HMRC fines, tribunal claims, and reputational risk.
With Gloroots as your EOR in the UK, you can:
- Hire employees in weeks without entity setup.
- Stay compliant with PAYE, NICs, pensions, and IR35.
- Protect your business from penalties and disputes.
Gloroots makes hiring in the UK fast, compliant, and risk-free.
Conclusion
The United Kingdom offers one of the world’s most advanced, skilled, and diverse labor markets, making it a strategic hub for companies expanding into Europe and beyond. From finance and fintech in London to biotech in Cambridge and Oxford, and digital industries in Manchester and Edinburgh, the UK is home to world-class talent across sectors.
At the same time, UK employment compliance is detailed and penalty-heavy. Employers must navigate PAYE payroll taxes, National Insurance Contributions (NICs), pension auto-enrolment, IR35 contractor rules, redundancy, and unfair dismissal protections. Direct entity setup requires incorporation, payroll registration, and ongoing filings with HMRC.
With Gloroots as your Employer of Record (EOR) in the UK, you can hire employees in the UK in weeks instead of months. Gloroots handles payroll compliance, employee benefits, and global compliance while you focus on scaling your team.
Gloroots makes UK hiring compliant, cost-efficient, and risk-free.
Frequently asked questions
