PEO & EOR services in the United Kingdom


The United Kingdom offers a diverse range of PEO/EOR employment opportunities, attracting both domestic and international talent to contribute to its thriving workforce.

UK PEO/EOR employment contracts


The most common type of employment contract through PEO/EOR in the UK is an “open-ended” permanent contract that can be terminated on notice. Many employers in the UK start by giving an employee a fixed-term contract. An employee on fixed-term contracts for 4 or more years will automatically become a permanent employee unless the employer can show there is a good business reason not to do so.


An employment contract is formed when an employer makes an offer of employment, and the employee accepts the offer. 

Employment contracts outline the terms and conditions of employment, including job responsibilities, working hours, salary or wages, holiday entitlement, notice periods, and any other relevant provisions.

PEO/EOR employment termination and notice period in the United Kingdom

Employers in the UK must give a notice period to their employees before the employment ends. The minimum notice periods are:

  • One week’s notice if employed between one month and 2 years,
  • One week’s notice for each year of employment if employed between 2 and 12 years,
  • 12 weeks’ notice if employed for 12 years or more.

Employment can be ended without notice if ‘payment in lieu of notice’ is included in the contract. In that case, the employer will pay the employee instead of giving a notice period. 

London Bridge across Thames river connecting two sides of London, UK PEO exploration

United Kingdom PEO/EOR employment: Salary, employer costs and working hours

In 2022, the average annual salary in the UK was $34.068,72. This is lower than the average annual salary in the United States: $53.490.

As an employer through PEO/EOR services in the UK, the actual employer costs are around 14% higher than the gross annual salary. Based on a $34.068,72 annual salary, the employment costs would be $38.838,34.

See all average salaries in Europe in 2022

There is no specific number of hours that makes an employee a full or part-time employee. Usually, a full-time employee works 35 hours or more a week. By law, an employee cannot work more than an average of 48 hours a week.


London Millennium Footbridge fascinating evening view, UK EOR services,

Paid vacation leave and public holidays in the UK PEO/EOR employment

Almost all employees are legally entitled to 5.6 weeks (28 days) of paid holidays per year (known as statutory leave entitlement or annual leave). For employees that work less than 5 days a week, there is a simple calculation to determine the amount of paid vacation days: the amount of workdays x 5.6.

In the United Kingdom, there are 10 public holiday days. 

  • New Year's Day – 1 January
  • New Year holiday – 2 January
  • Good Friday – 29 March
  • Easter Monday – 1 April
  • Early May bank holiday – 6 May
  • Bank Holiday for the coronation of King Charles – 8 May
  • Late May bank holiday – 27 May
  • Summer bank holiday – 26 August
  • Christmas Day – 25 December
  • Boxing Day – 26 December

Add 2024 UK public holidays to your calendar

London night street view with symbolic red bus, UK business expansion

Maternity and paternity leave through EOR/PEO in the United Kingdom


Mothers in the UK are entitled to statutory maternity leave and statutory maternity pay. Statutory maternity leave is a total of 52 weeks – the first 26 weeks of ordinary maternity leave and afterward 26 weeks of additional maternity leave. Mothers do not have to take 52 weeks, but they must take 2 weeks' leave after the baby is born (or 4 weeks if they work in a factory).

Looking at paternity leave in the UK, fathers can choose to take either 1 or 2 weeks. The statutory weekly rate of paternity pay is £151.97, or 90% of the average weekly earnings (whichever is lower).


Statutory Maternity Pay (SMP) is paid for up to 39 weeks. The employee is entitled to:

  • 90% of the average weekly earnings (before tax) for the first 6 weeks,
  • £151.97 or 90% of the average weekly earnings (whichever is lower) for the next 33 weeks.


Find out everything you need to know about Maternity leave in other European countries

Social Security tax for UK PEO/EOR employers

Workers within the UK are required by law to pay social security contributions on their gross salary and all earnings in the United Kingdom. The following rates (2020) have to be applied against the gross salary, with the ceilings indicated.

There are three taxes associated with a UK payroll scheme: two that affect the employee and one that affects the UK PEO/EOR employer. These taxes are listed below with their corresponding rates.

  • Employee taxes: PAYE (Income tax) -  20% – 45%
  • National Insurance (Social Security) - 2% – 12%
  • Employer taxes (National Insurance) - 13.8%

Both the employee and the employer contribute to social security in the UK. Here is an example: 

(COPY) Table for Blog page - HRO-2
** Earnings up to £9,500 are charged at 0% NI for employees and £8,788 for employers.

To learn more about the social security tax in Europe, we invite you to read this article on Social Security Tax Rates for Employers Across Europe.

We know European markets

Europe is home to a diverse range of countries, each with its unique employment characteristics. These reflect the diverse economic and cultural landscapes across the continent.

Contact us


Get in touch with our team of experts to identify the best PEO and EOR solutions for your needs in the UK today. Our HR Outsourcing services provide you with the right helping hand to enable you to grow! 

Monique Ramondt-Sanders

Monique Ramondt-Sanders

CCO & VP of HR Outsourcing