Employer of record in the UK: costs, rules and how to hire
Hire someone in the UK without opening your own UK company.
An employer of record (EOR) employs the person for you and handles their employment contract, payroll and benefits. You choose who to hire and manage their daily work.
By Employ Borderless · We help you understand and compare EOR services.
Start with our hiring overview, then use the guide to plan your offer and costs.
Use the dated guidance below for current rates and requirements.
Watch on YouTubeHow does a UK employer of record work?
There are two agreements: your company signs a service agreement with the EOR, and the employee signs an employment contract with the EOR’s employing entity. The person then works as part of your team.
Your company
Sets the role and salary, directs the work and pays the EOR invoice.
The employer of record
Is the legal employer and administers payroll, benefits and employment processes.
Your employee
Works with your team and receives their salary and employment documents through the EOR.
Agree who handles equipment, payroll changes, performance concerns and employee questions. An EOR service does not settle every business-tax or regulatory question about your UK activities.
- Do you already have an entity in this country?
- How many people are you hiring, and for how long?
- Is the work genuinely independent, or is it a job?
- Who carries the employment risk if the arrangement is challenged?
What each route means in full
- Your own entity
- Choose it when: You already have a company here, or you are committing to a substantial local team for the long term.You become the legal employer. You arrange payroll, benefits, filings and employment support yourself, and you carry the setup and running cost.
- Employer of record
- Choose it when: You have a person to hire here, want them employed properly, and do not want to open a company for it.The provider is the legal employer through its own entity. You direct the work and pay one invoice covering salary, employer costs and the service fee.
- Independent contractor
- Choose it when: The work is genuinely independent: their own business, their own methods, their own clients.A contract for services, not employment. The label does not decide the status; how the person actually works does, and getting it wrong is reclassified after the fact.
When would a UK company or contractor make more sense?
Employ through your own company
If you already have a UK operation, or plan to build a substantial local team, compare direct employment with the ongoing EOR fees and services. You will need to arrange payroll, benefits and employment support.
Engage a genuine independent contractor
That can suit independent project work. The arrangement must match how the person actually works; choosing a contractor label does not decide their employment status.
GOV.UK employment-status guidanceWhat does it cost to hire through a UK EOR?
The EOR’s advertised fee is only one part of the bill. Ask for a quote that separates these four costs:
- 1
Gross salary
The salary you agree with the employee, before their tax and deductions.
- 2
Employer National Insurance
An employer payroll contribution. The threshold and rate matter; a flat percentage of the whole salary can overstate the cost.
- 3
Pension and benefits
Confirm pension contributions and any health insurance, allowances or other benefits included in your offer.
- 4
EOR fees and other charges
Check the recurring fee, onboarding or exit fees, currency conversion and any deposit you need to fund.
Start with your salary budget
An illustration for one employee in the standard NI category.
- Annual salary
- £50,000.00
- Employer National Insurance
- £6,750.00
- Salary + NI, per year
- £56,750.00
Then add pension, EOR fees and benefits. This subtotal is not your complete hiring cost.
Calculation assumptions and source
Standard category: 15% above the £5,000 annual secondary threshold. Pay-period thresholds and category reliefs apply. Applies to 6 April 2026–5 April 2027. Assumes a full year. Actual payroll uses pay-period thresholds and rounding. Employment Allowance, special-category reliefs and other employer costs are excluded.
Check HMRC rates- Gross salary: £50,000
- Employer National Insurance: £6,750
- Benefits and EOR fee: quoted per hire
The numbers behind this figure
| Cost | Amount |
|---|---|
| Gross salary | £50,000 |
| Employer National Insurance | £6,750 |
| Benefits and EOR fee | Quoted per hire |
Source: HMRC (GOV.UK), 2026
How much should you budget for a workplace pension?
For an eligible employee in a scheme using qualifying earnings, the minimum employer contribution is 3% of that earnings band. The total minimum is 8%; the remaining 5% usually comes from the employee, including applicable tax relief. Your scheme can require more.
Which earnings count?
For 6 April 2026–5 April 2027, the annual qualifying-earnings band is £6,240 to £50,270. Salary, bonuses, commission, overtime and certain statutory payments count. Other schemes may use a different earnings basis, such as full basic salary.
The employee’s contribution is normally deducted through payroll. Your employer contribution is an additional hiring cost. Have the EOR identify both amounts and the scheme basis in the quote.
Example: a £50,000 annual salary
Assuming a full year of membership, salary only and the minimum 3% employer rate on qualifying earnings:
(£50,000 − £6,240) × 3% = £1,312.80 a year
That is about £109.40 a month in employer pension contributions, on top of salary and NI. Actual payroll uses pay-period thresholds and rounding. This fixed example is separate from the salary calculator above.
6 April 2026–5 April 2027 example · Checked . Due for review; verify current rules.
Sources and scheme exceptions
GOV.UK contribution rates and scheme rulesThe Pensions Regulator: 2026/27 earnings thresholdsWhat salary should you offer in the UK?
£39,039 gross annually. Full-time employee jobs held for at least a year; a median, not a mean or take-home pay. Provisional estimate.
Use this national benchmark for context. The role, seniority and location matter when setting your offer.
This fact is due for review.
Source and last check
Office for National Statistics (ONS) · Checked .
April 2025 ASHE (provisional annual earnings)
Compare stored earnings by occupation
ILOSTAT comparisons use a different population and measure from the ONS median. Their original data years remain visible; these figures were not independently revalidated in this review.
Average salary in the United Kingdom by occupation
Gross monthly earnings of employees per ISCO-08 occupation group, in GBP, from the ILO's official labour statistics. These stored survey figures for the United Kingdom have reference year 2025. Use these survey earnings to benchmark an offer before an EOR quote turns it into total employer cost.
| Occupation group | Monthly (GBP) | Approx. USD |
|---|---|---|
| All occupations | 3,157 | $4,157 |
| Managers · ISCO 1 | 4,576 | $6,025 |
| Professionals · ISCO 2 | 3,871 | $5,097 |
| Technicians and associate professionals · ISCO 3 | 3,168 | $4,171 |
| Clerical support workers · ISCO 4 | 2,280 | $3,003 |
| Service and sales workers · ISCO 5 | 1,953 | $2,572 |
| Skilled agricultural, forestry and fishery workers · ISCO 6 | 2,152 | $2,833 |
| Craft and related trades workers · ISCO 7 | 2,974 | $3,915 |
| Plant and machine operators and assemblers · ISCO 8 | 2,733 | $3,598 |
| Elementary occupations · ISCO 9 | 1,504 | $1,980 |
Source: ILOSTAT, the International Labour Organization's statistics database (average monthly earnings of employees, both sexes), reference year 2025.
How to hire a UK employee through an EOR
- 01
Define the role and offer
Have the job description, work location, salary, working hours and preferred start date ready. Decide which benefits you want to offer.
- 02
Choose your EOR and confirm the full cost
Ask who will legally employ the person, what the monthly invoice includes, and who will help with UK employment questions.
- 03
Complete checks and agree the contract
The EOR checks the proposed hire, prepares employment documents and confirms payroll and benefit arrangements. Your company signs a separate service agreement.
- 04
Onboard your employee
Once the documents and required checks are complete, the employee starts working with your team. Arrange equipment, access and a clear reporting line.
- 05
Manage the work; coordinate employment changes
You manage performance and priorities. Send the EOR payroll changes, leave information and any proposed contract or employment changes before they take effect.
What should the EOR arrange before your UK hire starts?
Confirm the employment terms, work eligibility, payroll and pension arrangements before the start date. These decisions affect what you promise the employee and what you pay each month.
Employment rules here follow Great Britain; confirm the applicable rules for a Northern Ireland hire. Source and review dates are shown for each topic. This section is due for review; verify current requirements before relying on it.
Employment documents and contract type
Employees and workers must receive their principal written statement on day one; the wider statement is due within two months. The statement records key terms and is distinct from the employment contract.
- Day-one terms include the employer and employee, role and start date, pay amount and frequency, working days and hours, location, holiday, benefits, training and any fixed end date or probation conditions.
- Sick-pay procedures, other paid leave and notice information must also be available on day one. Pension information and disciplinary, grievance and collective-agreement details belong in the wider statement.
- Changes to the written statement must be communicated within one month of the change.
For your hire: Choose ongoing or fixed-term employment and agree the hours and offer. The EOR prepares the employment documents; you supply the role details and review confidentiality, ownership of work and any enhanced benefits before signing.
Source and last check
GOV.UK written employment terms · Checked . Due for review; check the current source.
Working hours and overtime
The general limit is an average of 48 hours a week, normally measured over 17 weeks. Adult workers can choose to opt out; exceptions and separate rules for younger workers apply.
- Adult workers usually receive a 20-minute uninterrupted break when working more than six hours, 11 hours of rest between working days, and 24 hours off each week or 48 hours each fortnight. Exceptions apply.
- Breaks are not automatically paid. There is no general statutory overtime premium, but agreed contract terms apply and average pay for all hours worked must meet minimum-wage rules.
For your hire: Set hours that leave room for breaks and time-zone overlap. Agree paid overtime or time off in the offer. You manage the schedule; the EOR documents the terms and any valid opt-out and helps check working-time records.
Source and last check
GOV.UK working-time rules · Checked . Due for review; check the current source.
GOV.UK rest breaksGOV.UK overtime payPayroll, tax and employee deductions
Payroll must distinguish the employee’s gross salary, deductions and take-home pay from the employer’s contributions. PAYE handles Income Tax and National Insurance; the calculation depends on the employee’s circumstances.
For your hire: Ask the EOR to confirm the tax code, payroll cut-off, payslip, HMRC reporting and treatment of expenses and bonuses. Budget from the employer invoice, not the employee’s net salary.
Source and last check
HMRC payroll guidance · Checked . Due for review; check the current source.
Workplace pension contributions
Automatic enrolment normally applies to eligible workers aged 22 to State Pension age who earn at least £10,000 a year and ordinarily work in the UK. Exceptions and opt-in rights apply.
- Workers outside automatic-enrolment criteria may still ask to join. Employer contributions depend on earnings and eligibility. Employers must not pressure workers to opt out.
- Enrolment can generally be postponed for up to three months with written notice, while preserving the worker’s right to join during the delay.
For your hire: The EOR assesses eligibility, arranges enrolment and employee communications, and handles payroll contributions and opt-outs. Agree the scheme and contribution basis in your quote. The pension cost example above explains what to budget.
See pension contributions and the cost exampleSource and last check
GOV.UK pension eligibility · Checked . Due for review; check the current source.
Sickness and enhanced benefits
For 2026/27, Statutory Sick Pay is the lower of £123.25 a week or 80% of average weekly earnings, for up to 28 weeks. It is paid for qualifying working days from the first full working day of sickness, subject to eligibility.
- Employees must have started work under their contract and give the required notice and evidence of illness. Exceptions include employees already receiving statutory maternity pay; linked absences can affect entitlement.
- At average weekly earnings of £100, the weekly amount is £80. At £500, it is capped at £123.25. A part-week absence requires a daily calculation.
- Enhanced contractual sick pay can top this up. Agree the amount and duration before making the offer; a promise of full salary during sickness costs more than the statutory minimum.
For your hire: Give the EOR absence dates and the agreed sick-pay policy. The EOR checks eligibility, calculates payroll and issues the required paperwork. You plan cover and budget for any enhanced pay, health cover or other benefits.
Source and last check
GOV.UK statutory sick pay · Checked . Due for review; check the current source.
HMRC sick-pay calculationHMRC eligibility and exceptionsContractors and IR35
IR35 can apply when someone supplies services through their own intermediary but would be an employee if engaged directly. Responsibilities depend on the client and arrangement; a contractor label alone does not settle status.
For your hire: Review the actual working relationship before choosing a contractor route. Ask for an assessment of your arrangement, particularly when converting an existing contractor to employment.
Source and last check
HMRC off-payroll working guidance · Checked . Due for review; check the current source.
What pay and leave should your UK offer cover?
The EOR helps administer these obligations, but they still affect your offer, budget and team planning. Employment guidance below follows Great Britain; check the local rules for Northern Ireland.
- Paid annual leave, other days: 20 days
- Public holidays, if counted within leave: 8 days
- The rest of the year: 337 days
The numbers behind this figure
| Entitlement | Days a year |
|---|---|
| Paid annual leave (statutory minimum) | 28 days |
| Public holidays (England and Wales) | 8 days, can be counted within annual leave |
| Total statutory paid days off | 28 days |
Source: National government, 2026; National government, 2026. Statutory minimums. Eligibility, accrual and collective agreements can change what an individual employee receives.
Agree a salary that meets the wage rules
£12.71/hour. Age 18–20: £10.85; under 18: £8. Eligible apprentices: £8; age and training-year conditions apply.
This fact is due for review.
Plan paid holiday from the start
5.6 weeks for most workers; 28 days for a five-day week. Bank holidays can be included. Irregular-hours and part-year workers accrue leave under separate rules.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Agree when the employee gets paid
Pay frequency must be specified in the written employment statement; follow the agreed pay schedule.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Check any promised bonus
No general legal duty to offer a bonus. Contractual terms and established custom can create an entitlement.
This fact is due for review.
Source and last check
Acas · Checked .
Budget for time off as well as pay
Plan cover for absences and distinguish statutory entitlements from any enhanced benefits you offer. Leave eligibility and pay eligibility can differ.
Bank holidays
Calendars differ across England and Wales, Scotland and Northern Ireland; check the relevant location and year.
This fact is due for review.
Maternity leave
Up to 52 weeks for eligible employees. Leave entitlement is separate from eligibility for statutory pay.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Statutory maternity pay
Up to 39 weeks if eligible; the first six weeks and remaining weeks use different payment rules.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Paternity leave and pay
Up to two weeks of leave; pay has separate eligibility rules. Check the conditions and notice requirements.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Shared parental leave and pay
Eligible parents can share up to 50 weeks of leave and 37 weeks of pay by reducing maternity or adoption entitlement. These are shared limits, not extra entitlement per parent.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Unpaid parental leave
Up to 18 weeks per child before age 18 if eligible; normally no more than four weeks per child per year unless agreed otherwise.
This fact is due for review.
Source and last check
GOV.UK · Checked .
What happens when UK employment ends?
Involve the EOR before communicating a dismissal or redundancy. Agree the reason, process, notice, final pay and any compensation. Notice and redundancy pay are separate obligations; ending your EOR service agreement does not itself settle the employee’s rights.
The numbers behind this figure
| Obligation | Weeks of salary |
|---|---|
| Statutory notice | 5.3 weeks |
| Statutory severance | 5 weeks |
| Total statutory exit cost | 10.3 weeks |
The UK sits at number 85 of 191 countries for statutory exit cost in our Termination Cost Index.
Employer notice (Great Britain)
At least one week after one month of service; one week per completed year from two to twelve years, capped at twelve weeks. Contractual notice can be longer.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Employee notice (Great Britain)
At least one week after more than one month of employment; check the contract for any longer notice requirement.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Statutory redundancy pay (Great Britain)
Normally eligible after two years. Uses age during each completed service year: half a week under 22, one week at 22–40, and 1.5 weeks at 41+. Service is capped at 20 years; a weekly-pay cap applies.
This fact is due for review.
Source and last check
GOV.UK · Checked .
Does probation change the process?
The written employment statement must set out any probation period and its conditions. Check the agreed terms.
This fact is due for review.
Source and last check
GOV.UK · Checked .
This guidance covers Great Britain. For a hire in Northern Ireland, confirm local rules with the EOR and consult nidirect redundancy guidance.
What should you ask a UK EOR provider?
Compare the service you will receive for your actual hire. Before signing, get clear answers to these questions:
- Which legal entity will employ the person, and who handles local support?
- What is the full recurring cost, and what can be charged separately?
- What payroll cut-off and start date can you commit to for this hire?
- What are the pension and benefit options, and what will they cost?
- Who helps with contract changes, employee concerns and termination?
- What are the terms for ending the service or transferring the employee?
Tell us about the role and your hiring plans. Employ Borderless helps you compare EOR options and decide what to ask next.
Questions about hiring through a UK EOR
For the difference between hiring models, read our EOR vs PEO guide. When a provider uses “PEO” in a UK offer, ask who signs the employment contract and whether you need your own entity.
Does an EOR find candidates for me?
Typically, you choose the person and the EOR handles employment. Recruitment may be a separate service, so check what is included if you also need help finding someone.
Can I move the employee to my own UK company later?
Discuss the transfer process before choosing a provider. Ask about notice, fees, continuity of employment and the documents needed. Plan the transfer with both employers before changing payroll arrangements.
Can an EOR sponsor a work visa?
Do not assume that an EOR contract includes immigration support. Ask whether the provider can support the specific person, role and immigration route, and obtain confirmation before agreeing a start date.
GOV.UK sponsorship requirementsWhat changed in the UK
Checked against official sources on .
No rule changes recorded since we began logging them.
Check the facts behind this guide
The practical figures above use our reviewed UK facts. Open the record for government links, eligibility details, data periods and individual validation dates. Statistical benchmarks describe their stated period, not today’s market.
View 24 sourced facts and the review notes
United Kingdom employment facts at a glance
Each validation date records when we checked that fact against the linked source. Effective dates describe when a rule applies; statistical periods describe when earnings were measured. A successful website fetch does not renew either date.
Employment-law guidance here follows Great Britain unless stated otherwise. Northern Ireland has separate rules and eligibility conditions: check nidirect employment guidance. Tax and earnings rows state their own scope.
| Fact | Value | Source | Effective / data period | Last validated |
|---|---|---|---|---|
| Minimum wage (age 21+) | £12.71/hour. Age 18–20: £10.85; under 18: £8. Eligible apprentices: £8; age and training-year conditions apply. | GOV.UK | From 1 April 2026 | Review due |
| Employer National Insurance | Standard category: 15% above the £5,000 annual secondary threshold. Pay-period thresholds and category reliefs apply. | HMRC (GOV.UK) | 6 April 2026–5 April 2027 | Review due |
| Payroll cycle | Pay frequency must be specified in the written employment statement; follow the agreed pay schedule. | GOV.UK | Review due | |
| 13th salary / bonuses | No general legal duty to offer a bonus. Contractual terms and established custom can create an entitlement. | Acas | Review due | |
| Paid annual leave (minimum) | 5.6 weeks for most workers; 28 days for a five-day week. Bank holidays can be included. Irregular-hours and part-year workers accrue leave under separate rules. | GOV.UK | Review due | |
| Bank holidays | Calendars differ across England and Wales, Scotland and Northern Ireland; check the relevant location and year. | GOV.UK | 2026 regional calendars | Review due |
| Maternity leave | Up to 52 weeks for eligible employees. Leave entitlement is separate from eligibility for statutory pay. | GOV.UK | Review due | |
| Statutory maternity pay | Up to 39 weeks if eligible; the first six weeks and remaining weeks use different payment rules. | GOV.UK | Review due | |
| Paternity leave and pay | Up to two weeks of leave; pay has separate eligibility rules. Check the conditions and notice requirements. | GOV.UK | Review due | |
| Shared parental leave and pay | Eligible parents can share up to 50 weeks of leave and 37 weeks of pay by reducing maternity or adoption entitlement. These are shared limits, not extra entitlement per parent. | GOV.UK | Review due | |
| Unpaid parental leave | Up to 18 weeks per child before age 18 if eligible; normally no more than four weeks per child per year unless agreed otherwise. | GOV.UK | Review due | |
| State Pension age | Depends on date of birth; use the government calculator. State Pension age is not a general mandatory retirement age. | GOV.UK | Review due | |
| Probation terms | The written employment statement must set out any probation period and its conditions. Check the agreed terms. | GOV.UK | Review due | |
| Employer notice (Great Britain) | At least one week after one month of service; one week per completed year from two to twelve years, capped at twelve weeks. Contractual notice can be longer. | GOV.UK | Review due | |
| Employee notice (Great Britain) | At least one week after more than one month of employment; check the contract for any longer notice requirement. | GOV.UK | Review due | |
| Statutory redundancy pay (Great Britain) | Normally eligible after two years. Uses age during each completed service year: half a week under 22, one week at 22–40, and 1.5 weeks at 41+. Service is capped at 20 years; a weekly-pay cap applies. | GOV.UK | Review due | |
| Median annual salary (full-time) | £39,039 gross annually. Full-time employee jobs held for at least a year; a median, not a mean or take-home pay. Provisional estimate. | Office for National Statistics (ONS) | April 2025 ASHE (provisional annual earnings) | Review due |
| Employment documents and contract type | Employees and workers must receive their principal written statement on day one; the wider statement is due within two months. The statement records key terms and is distinct from the employment contract. | GOV.UK written employment terms | Review due | |
| Working hours and overtime | The general limit is an average of 48 hours a week, normally measured over 17 weeks. Adult workers can choose to opt out; exceptions and separate rules for younger workers apply. | GOV.UK working-time rules | Review due | |
| Payroll, tax and employee deductions | Payroll must distinguish the employee’s gross salary, deductions and take-home pay from the employer’s contributions. PAYE handles Income Tax and National Insurance; the calculation depends on the employee’s circumstances. | HMRC payroll guidance | Review due | |
| Workplace pension contributions | Automatic enrolment normally applies to eligible workers aged 22 to State Pension age who earn at least £10,000 a year and ordinarily work in the UK. Exceptions and opt-in rights apply. | GOV.UK pension eligibility | Review due | |
| Sickness and enhanced benefits | For 2026/27, Statutory Sick Pay is the lower of £123.25 a week or 80% of average weekly earnings, for up to 28 weeks. It is paid for qualifying working days from the first full working day of sickness, subject to eligibility. | GOV.UK statutory sick pay | 6 April 2026–5 April 2027 | Review due |
| Contractors and IR35 | IR35 can apply when someone supplies services through their own intermediary but would be an employee if engaged directly. Responsibilities depend on the client and arrangement; a contractor label alone does not settle status. | HMRC off-payroll working guidance | Review due | |
| Workplace pension contributions | For a scheme using qualifying earnings, the minimum employer contribution is 3% and the total minimum is 8%. The 2026/27 annual earnings band is £6,240–£50,270. Scheme rules may require more or use a different earnings basis. | GOV.UK and The Pensions Regulator | 6 April 2026–5 April 2027 | Review due |
International statistical benchmarks
Retained for comparison, with their original data years. These are not individual statutory entitlements or payroll rates. Last independently validated: not recorded for these imported observations; this government-source review does not validate them.
| Fact | Value | Source and data period |
|---|---|---|
| Employer social contributions | 15% | National government · Data period: 2026 |
| Employee social contributions | 8% | National government · Data period: 2026 |
| Tax and mandatory contributions wedge (OECD, taxes plus non-tax compulsory payments such as mandatory private pension and health contributions) | 32.4% | OECD · Data period: 2025 |
| Average weekly hours actually worked | 35.08 hours | ILOSTAT · Data period: 2025 |
| Trade union membership | 22% | OECD/AIAS ICTWSS · Data period: 2024 |
| Collective bargaining coverage | 40.2% | OECD/AIAS ICTWSS · Data period: 2024 |
Page review notes
: replaced generic source labels with direct publisher links; clarified payroll frequency, leave and bonus conditions; added ONS median earnings and individual validation dates.
: corrected wage rounding and redundancy units; separated statutory NI from OECD benchmarks. These entries describe our page changes, not the dates legislation changed.