How to hire in United Kingdom through an EOR

UK law doesn't require a full written contract, but you must give employees a written statement of main terms on or before their first day. Skip this, and they can claim up to four weeks' pay in compensation from an employment tribunal.

Contract types

Permanent contracts are the most common choice for UK hires. They're stable, give full employment rights from day one, and work well for most ongoing roles.

For your first UK hires, go permanent unless you have a clear short-term need. Fixed-term sounds flexible, but chains of renewals can tip you into accidental permanency without realising it.

What has to be in the contract

You need to provide a principal statement covering: job title, start date, pay details, hours, holiday entitlement (at least 5.6 weeks paid), notice periods, and pension info. It should also point employees to where your disciplinary and grievance policies live.

There's no language requirement, but English is standard. If clarity is a concern, provide a translation. The statement can be a single document or split across two (one on day one, the full contract to follow). Verbal agreements do count as contracts, but a written statement is what protects you if terms are ever disputed.

Probation periods aren't required by law, but 3-6 months is common practice. You can dismiss with minimal notice during probation (often one week), though you should still follow a fair process. If someone has been with you for two years, fair dismissal rules apply regardless. State the probation period explicitly in the contract, including its length and what it means for notice.

Contractor vs employee

Misclassifying a worker is expensive. If HMRC or a tribunal decides your contractor is actually an employee, you'll owe back taxes, National Insurance, holiday pay, and potentially pension contributions. Fines can reach 200% of unpaid NICs, plus interest. Tribunal awards for unpaid rights can go up to 52 weeks' pay (capped at £115,115 in 2026), and more if discrimination is involved.

The legal test looks at the reality of the relationship, not what you've written in a contract. Tribunals consider control (do you dictate how, when, and where they work?), mutuality of obligation (are they exclusive to you?), personal service (can they send someone else?), and integration (are they effectively part of your business?). IR35 rules add another layer for public sector or medium-to-large private clients, and off-payroll status shifts the tax risk to you.

To reduce risk, genuine contractors should invoice through their own company, use their own tools, set their own rates, and work for multiple clients. If you're unsure about a specific arrangement, get advice before you sign anything.

Non-competes are only enforceable if they're reasonable: they need to protect a legitimate interest (like client lists), be limited to 3-12 months, and be specific about geography and role. Blanket bans don't hold up. IP assignment works well in contracts too. Employees automatically assign inventions made in the course of their work, but with contractors you need an explicit clause. Courts will strike out anything overbroad.

The UK has one of Europe's more generous statutory leave setups, but there's a real gap between what the law requires and what competitive employers actually offer. Both matter when you're hiring here.

Annual leave: the legal baseline

Every UK worker gets 5.6 weeks of paid annual leave per year, which works out to 28 days for someone on a standard five-day week. This includes bank holidays. Entitlement starts accruing from day one, so new hires build up leave right away.

Most employers give full-time employees the full 28 days upfront. That said, they're legally allowed to use an accrual system in the first year, where employees earn one-twelfth of their entitlement each month. For irregular-hours or zero-hours workers, the calculation is different: they accrue leave at 12.07% of hours actually worked in each pay period. That figure comes from dividing 5.6 weeks by the 46.4 working weeks in a year.

Employees can carry over unused leave into the next year, but only up to four weeks. That carried-over leave must be used within 18 months of the end of the leave year it was accrued in. If someone leaves without taking all their accrued leave, you must pay it out in full.

Public holidays in the UK

Bank holidays are included within the 28-day entitlement, not added on top. Scotland and Northern Ireland have slightly different dates for some holidays.

All leave types

Mandatory benefits

Pensions: You must enrol eligible employees (aged 22+, earning over £12,570 annually) into a workplace pension scheme. The employer contributes at least 3% of qualifying earnings; the employee contributes at least 5%. There's no flexibility here.

National Insurance and tax: You handle payroll deductions for income tax and National Insurance contributions. There's no separate health insurance requirement because the NHS is funded through National Insurance, so all employees already have access to free healthcare.

Statutory Sick Pay: From day 4 of absence, you must pay £116.40 per week (2026 rate) for up to 28 weeks in a rolling 12-month period. Many employers offer more than this, but it's the legal floor.

Beyond these, there are no mandatory meal vouchers, transport allowances, or other statutory benefits.

What employees actually expect

The statutory minimums hold up well by global standards, but UK employees generally expect more. Here's where the gap tends to show up.

Sick pay: The statutory rate is low. Most mid-market and larger employers offer full pay for at least the first week, then drop to statutory rates. Offering only the legal minimum tends to signal cost-cutting rather than care.

Bereavement and marriage leave: Neither is legally required, but it's standard practice to offer 3-5 days paid leave for close family deaths and 1-2 days for weddings. Not including these tends to stand out, and not in a good way.

Private health insurance: It's not mandatory, but it's become a common expectation in professional roles. Even modest coverage covering dental, optical, and physio goes a long way in showing you value the people you hire.

Flexible working: Employees can request it by law, and you can decline if there's a genuine business reason. In practice, remote or hybrid arrangements are now expected in most knowledge work roles. Ruling out flexibility entirely will make hiring harder.

Enhanced parental pay: Statutory rates are modest. Employers competing for talent often top up maternity pay to 100% for longer periods, or offer enhanced paternity pay. It's a bigger factor in retention decisions than many employers expect.

Professional development: Not required, but expected. A training budget or learning allowance is standard in most competitive hiring markets.

You can hire on statutory minimums, but you'll attract fewer candidates and see higher turnover. Most employers who hire well in the UK offer at least modest improvements on sick pay, health coverage, and parental support.

Firing someone in the UK just got riskier. From January 1, 2027, employees qualify for unfair dismissal protection after just six months, down from two years. That's a significant shift, and it means you'll need clear reasons and a fair process in place before letting anyone go.

Firing someone

There are only five fair reasons to dismiss someone: capability or qualifications, conduct (including gross misconduct), redundancy, a legal reason (like a driving ban for a driver), or some other substantial reason. Tribunals look at whether the reason holds up and whether you followed a fair process, including Acas guidelines for investigations and hearings.

Unfair dismissal happens when you skip a fair reason or a fair process. Automatic unfair dismissal is different. It covers around 60 grounds with no service requirement at all. Those include pregnancy, maternity or family leave, whistleblowing, health and safety complaints, flexible working requests, asserting statutory rights like minimum wage or holidays, trade union activities, and TUPE transfers without an economic reason.

Protected characteristics under the Equality Act 2010 include age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex, and sexual orientation. Any dismissal linked to these is unlawful from day one. If you lose a tribunal claim, compensation can reach up to a year's salary, capped at £115,115 in 2025, and you'll likely cover legal costs too.

Notice periods

Statutory minimums apply unless your contract sets something higher. As the employer, you give at least one week per year of service, up to 12 weeks. Employees give one week after four weeks' service, unless their contract says otherwise.

Garden leave or payment in lieu of notice (PILON) can shorten the notice period if it's written into the contract. Always check whether a collective agreement adds anything on top of the statutory minimums.

Severance

Severance pay isn't required for most dismissals. It's only mandatory for redundancy after two years' service, at least until the 2027 changes come in. Statutory redundancy pay is calculated as one week's pay per year of service, capped at £700 per week in 2025, with employees aged 41 and over getting 1.5 weeks per year, up to a maximum of 20 years and £21,000 total.

The weekly pay calculation uses basic salary only, not overtime or bonuses. Unfair dismissal awards aren't subject to the redundancy cap, but they are capped at £115,115. If your contracts or policies offer enhanced redundancy, those terms take precedence, and that's common in larger organisations.

Work permits and visas

You can hire foreign nationals through an EOR. The EOR acts as the visa sponsor if they hold a sponsor licence, and most UK EORs do. That means they can sponsor Skilled Worker visas on your behalf. You can't sponsor directly without a UK legal entity of your own.

The main visa categories are: Skilled Worker (for roles on the eligible occupations list, with a minimum salary of £38,700 or tradeable points), Health and Care Worker (for NHS and shortage roles), Global Business Mobility (for intra-company transfers), and Scale-up (for fast-growth companies). All of them require sponsorship, an English language test, and proof of maintenance funds.

Standard processing takes around three weeks, or five days on the priority route. Key requirements include a role at RQF level 3 or above, a genuine vacancy, and ongoing sponsor duties like record-keeping. There's no digital nomad visa in the UK. Remote workers need a valid work visa, or they can visit under visitor rules, but they can't receive payment from a UK source while doing so.

EORs handle Home Office compliance for you, including right-to-work checks, reporting changes, and visa renewals. If those obligations are missed, fines can reach £20,000 per worker, and the sponsor licence can be revoked.

A few other things worth knowing

Employee data falls under UK GDPR. You're required to process it lawfully, and EORs typically manage this through privacy notices and data protection impact assessments (DPIAs). Fines for breaches can reach 4% of global turnover, so it's worth making sure your EOR has this covered.

Trade unions have recognition rights in larger workplaces. Union density sat at around 23% in 2024. Where collective bargaining applies, it can set terms like pay rates, so check whether any of your roles fall under an existing agreement. If you're making 20 or more redundancies, you're also required to consult with unions.

The Employment Rights Act 2025 rolls out from 2027 and brings some meaningful changes. Day-one unfair dismissal protection applies to some workers, with a six-month qualifying period overall. There's also no qualifying period for spent convictions, stronger family leave enforcement, and unfair dismissal rights for zero-hours contract workers. Expect quicker-onset protections and a likely increase in tribunal claims.