Who is the legal employer when using an EOR?

EuroDev becomes the legal employer in the UK, while you retain day‑to‑day operational control over the employee.

Do I need a UK legal entity to hire employees?

No. A UK Employer of Record allows you to hire employees without setting up a UK company, branch, or subsidiary.

What employment contracts are used in the UK?

UK EOR hires typically use permanent (open‑ended) employment contracts, compliant with UK statutory employment law.

Can I hire both full‑time and remote employees?

Yes. An EOR supports full‑time, part‑time, and fully remote employees located anywhere in the United Kingdom.

What payroll taxes and contributions apply in the UK?

Employers must pay Employer National Insurance (15%) and workplace pension contributions (minimum 3%), which EuroDev manages through payroll.

How much does it cost to employ someone in the UK?

Total employer costs are typically 15–20% on top of gross salary, depending on salary level and pension setup.

Are UK employees entitled to paid leave?

Yes. UK employees are entitled to 28 days of paid annual leave, which may include public holidays, and is pro‑rated for part‑time employees.

Does UK employment law differ across regions?

Some legal procedures differ between England & Wales, Scotland, and Northern Ireland, but statutory employment rights are largely aligned.

When should I use an EOR instead of setting up an entity?

An EOR is ideal when you want to hire quickly, test the UK market, or reduce compliance risk without long‑term infrastructure.

What are the risks of employee misclassification in the UK?

Misclassifying a worker in the UK can expose businesses to significant financial and legal risk, including backdated Income Tax and National Insurance liabilities, interest, and HMRC penalties, particularly under IR35 off‑payroll rules. Workers may also claim employment rights such as holiday pay or unfair dismissal, while businesses risk audits, legal disputes, and reputational damage.

Can a PEO help hire contractors in the UK?

No, a PEO in the UK is designed for employees under a co‑employment model, not for engaging independent contractors. For genuine contractors, companies usually work with them directly, use contractor management tools, or choose an AOR or EOR if the role risks falling under IR35 or misclassification.

Hire Employees in the United Kingdom with an Employer of Record

Hiring employees in the United Kingdom does not require setting up a UK legal entity.

With EuroDev’s Employer of Record (EOR) and PEO services in the UK, you can legally employ staff, manage payroll, and remain compliant with UK employment legislation, while EuroDev acts as the official employer on your behalf.

We handle:

UK-compliant employment contracts
Payroll processing and tax reporting
National insurance contributions
Ongoing HR administration and employment law compliance

Talk to our EOR experts today

Hiring Employees in the United Kingdom with an Employer of Record

An Employer of Record (EOR) enables your company to hire employees in the UK without setting up a subsidiary or branch. EuroDev becomes the formal employer in the UK, while your business retains full operational control over the employee’s daily responsibilities.

How hiring in the UK through EuroDev works

1. Employee selection

You choose the candidate you want to employ in the UK.

2. Employment contract setup

EuroDev prepares and issues a locally compliant UK employment contract that aligns with statutory requirements, including employment rights and notice obligations.

3. Payroll & tax administration

We manage monthly payroll, income tax withholding (PAYE), National Insurance contributions and reporting to HM Revenue & Customs (HMRC).

4. Ongoing compliance & HR support

EuroDev handles statutory benefits, paid leave, payroll reporting, and compliance throughout the entire employment lifecycle.

Employer of Record vs Setting Up a Legal Entity in the United Kingdom

When an EOR is the right choice:

You want to hire quickly without lengthy incorporation procedures
You are testing the UK market
You plan to hire a small or remote UK-based team
You want to reduce legal, payroll and compliance risk

When a local entity makes sense:

You are building a large, long-term workforce in the UK
You require a permanent commercial presence
You want full internal control over payroll and HR administration

Key differences at a glance

	Employer of Record	Local Entity
Setup time	Weeks	Several months
Legal responsibility	EuroDev	Your Company
Payroll & Compliance	Managed by EuroDev	In-house
Upfront costs	Low	High
Risk exposure	Reduced	Full exposure

Employment Contracts Through a UK EOR

Permanent (Indefinite) Employment Contracts

Permanent contracts are the standard form of employment in the UK and offer strong employee protections.

Key characteristics of permanent contracts:

No fixed end date
Statutory notice and redundancy rights
Protection against unfair dismissal (after qualifying period)
Full entitlement to statutory leave and benefits
May include probationary periods

Fixed‑Term Contract Rules (Temporary Contracts)

Fixed‑term contracts are permitted where there is a genuine business need, such as project-based or temporary roles.

Key rules include:

Defined contract end date
Employees gain permanent status after 4 years of successive fixed-term employment unless the employer can show a good reason not to
Equal treatment compared to permanent employees
Automatic conversion risk if misused

All employees hired through a UK Employer of Record must receive contracts that comply with UK statutory employment law, including written particulars of employment.

Termination, Notice Periods & Severance in the United Kingdom

UK does not apply "employment at will." Terminations must follow statutory notice rules and fair dismissal procedures.

Probation Periods

Probation periods in the UK generally last between three and six months and allow employers to evaluate an employee's performance, conduct, and suitability for the role. Although not mandatory under UK law, probation clauses are common and must be expressly included in the employment contract. Shorter periods typically apply to junior positions, with six months being standard for senior roles.

Notice periods

Less than 1 month: no statutory minimum
1 month to 2 years: at least 1 week
2-12 years: 1 week per year of service
12+ years: maximum 12 weeks

Severance pay

Applies after 2 years of service
Based on: age, length or service, and weekly pay cap
Statutory redundancy pay is capped by law

Scotland and Northern Ireland use separate legal systems for disputes, but statutory entitlements are largely aligned.

EuroDev ensures terminations are handled correctly and compliantly.

Payroll, Employer Costs & Working Hours in the United Kingdom

Payroll costs when hiring through an EOR in the UK

When employing staff in the UK through EuroDev's EOR service, employer costs are typically around 18% on top of gross salary, depending on earnings level. This includes Employer National Insurance Contributions, pension auto-enrolment contributions, apprenticeship levy (where applicable).

EuroDev manages all payroll calculations, filings, and payments.

Example:

Average annual gross salary: £40,000.00
Estimated total employment cost: £46,262.80

EuroDev fully manages all payroll calculations, filings, and statutory payments.

Social Security & Employer Contributions in the United Kingdom

EuroDev manages all UK social security obligations as part of the payroll process

Employer responsibilities handled by EuroDev

PAYE registration with HMRC
Monthly payroll reporting
Employer National Insurance Payments
Pension auto-enrolment administration

Typical employer contribution structure

Employer National Insurance: 15% on earnings above the £5000/ year secondary threshold
Workplace pension minimum: 3%
Apprenticeship Levy: 0.5% of annual pay bill, payable only if pay bill is over £3 million

Total estimated employer contribution: ~18%

Working Hours & Overtime in the UK

Standard full‑time working week: 37.5- 40 hours
Maximum legal overtime limit: 48 hours per week on average (and opt-out must be voluntary and in writing)
No statutory overtime pay rate (typically set by contract)
Rest breaks and weekly rest periods are mandatory (20 minutes after 6 hours; 11 hours daily rest; weekly rest).

EuroDev ensures working‑time rules are correctly applied based on contract type and applicable agreements.

Paid Vacation Leave & Public Holidays

Employees hired through an EOR in the UK are entitled to statutory paid leave. EuroDev ensures all leave entitlements are tracked and administered correctly.

Annual leave

Minimum: 28 business days per year
Depending on the contract, this may include public holidays
Pro-rated for part-time employees

Public holidays

England: 8 bank holidays
Wales: 8 bank holidays
Scotland: 9 bank Holidays
Northern Ireland: 10 bank holidays

One-off bank holidays can be added

Maternity & Paternity Leave in the United Kingdom

The United Kingdom applies equal parental leave entitlements, fully funded through social security when handled correctly.

Maternity leave

Up to 52 weeks total
First 2 weeks are mandatory immediately after childbirth
Weeks 1-6: 90% of weekly earnings
Weeks 7-39: £194.32 per week or 90% of average weekly earnings (whichever is lower)
Final 13 weeks of leave (weeks 40-52): unpaid

Paternity leave

Up to 2 weeks
Can be taken as 2 separate 1 week blocks or 2 consecutive weeks
Must be taken within 52 weeks of the child's birth
Pay rate £194.32 per week or 90% of average weekly earnings (whichever is lower)

Why Companies Choose EuroDev for EOR in the UK

No need to establish a UK legal entity

Fully compliant UK employment and payroll execution
Local expertise in UK labor law
Single point of contact for HR, payroll, and compliance
Flexible scaling as your UK team grows

Hire Employees in the UK with Confidence

The UK has a structured employment law framework with defined employee protections. Hiring through an Employer of Record ensures compliance while reducing operational risk.

EuroDev enables international companies to hire in the UK quickly, compliantly, and without unnecessary administrative burden.

Whether you are making your first UK hire or expanding an existing team, our EOR and PEO services give you the flexibility to grow with confidence.

Get in touch with our team to discuss hiring in the United Kingdom.

Talk to our EOR experts today

Contact us

Get in touch with our team of experts to identify the best HR solutions for your needs in the United Kingdom today.

EuroDev's HR Outsourcing services provide the stability and expertise to enable you to scale your business with confidence.

Monique Ramondt-Sanders

CCO & VP of HR Outsourcing

FAQ's

: EuroDev becomes the legal employer in the UK, while you retain day‑to‑day operational control over the employee.
: No. A UK Employer of Record allows you to hire employees without setting up a UK company, branch, or subsidiary.
: UK EOR hires typically use permanent (open‑ended) employment contracts, compliant with UK statutory employment law.
: Yes. An EOR supports full‑time, part‑time, and fully remote employees located anywhere in the United Kingdom.
: Employers must pay Employer National Insurance (15%) and workplace pension contributions (minimum 3%), which EuroDev manages through payroll.
: Total employer costs are typically 15–20% on top of gross salary, depending on salary level and pension setup.
: Yes. UK employees are entitled to 28 days of paid annual leave, which may include public holidays, and is pro‑rated for part‑time employees.
: Some legal procedures differ between England & Wales, Scotland, and Northern Ireland, but statutory employment rights are largely aligned.
: An EOR is ideal when you want to hire quickly, test the UK market, or reduce compliance risk without long‑term infrastructure.
: Misclassifying a worker in the UK can expose businesses to significant financial and legal risk, including backdated Income Tax and National Insurance liabilities, interest, and HMRC penalties, particularly under IR35 off‑payroll rules. Workers may also claim employment rights such as holiday pay or unfair dismissal, while businesses risk audits, legal disputes, and reputational damage.
: No, a PEO in the UK is designed for employees under a co‑employment model, not for engaging independent contractors. For genuine contractors, companies usually work with them directly, use contractor management tools, or choose an AOR or EOR if the role risks falling under IR35 or misclassification.