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Hiring employees in the United Kingdom (2026)

Here's what you need to know before you hire in United Kingdom: what it really costs an employer, the employment laws that shape the contract, and how an employer of record in the United Kingdom lets you hire compliantly without opening a local entity. Every figure below is sourced and dated.

18%Employer cost on top
£2,203Minimum wage / mo
28 daysMinimum paid annual leave
Days, not monthsTime to hire via EOR
Robbin Schuchmann
Written by:
Robbin Schuchmann
Co-Founder at EOR Overview
Last updated: November 7, 2026

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United Kingdom employment facts

The statutory facts that drive a hire in United Kingdom. Each row shows where the figure comes from and how current it is, so you can trust the number and check it yourself.

Pay & working time

Minimum wageper month£2,203CurrentNational government · 2026
Average wage (USD PPP)per year, OECD, at purchasing power parity$66,299AgingOECD · 2025
Payroll cyclemonthlyCurrentManual / editor · 2026
13th-month salarynoneCurrentNational government · 2026

Employer cost & tax

Employer social securityof gross salary18%CurrentManual / editor · 2026
Employee social securitywithheld from pay8%CurrentNational government · 2026
Tax and mandatory contributions wedgeOECD, taxes plus non-tax compulsory payments such as mandatory private pension and health contributions32.4%AgingOECD · 2025
Corporate tax rate25%CurrentNational government · 2026

Termination

Notice period (average over 1, 5 and 10 years)employer notice for an economic dismissal5.3 weeksCurrentNational government · 2026
Severance pay (average over 1, 5 and 10 years)unconditional severance for an economic dismissal5 weeksCurrentNational government · 2026
Employment protectionOECD EPL, scale 0 to 61.9AgingOECD · 2025

Leave & time off

Paid annual leave (minimum, once eligible)28 daysCurrentNational government · 2026
Public holidays8 daysCurrentNational government · 2026
Maternity leave52 weeksCurrentNational government · 2026
Paternity leavepaid leave reserved for the father or partner, including reserved parental-leave quotas2 weeksCurrentNational government · 2026
Parental leave18 weeksCurrentNational government · 2026

Labour market

State pension agenormal statutory pensionable age66CurrentManual / editor · 2026
Unemployment rate5%CurrentOECD · 2026
GDP per capita$57,602AgingWorld Bank Open Data · 2025
Union density22%DatedOECD/AIAS ICTWSS · 2024
Collective bargaining coverage40.2%DatedOECD/AIAS ICTWSS · 2024

What it costs to hire in United Kingdom

Salary is only part of the bill. On top of gross pay you owe employer social security and statutory contributions. Here's what an example salary of $66,000 a year actually costs you as the employer.

Gross annual salary$66,000
Employer contributions≈ 18% of gross+ $11,880
Total employment cost$77,880
Your EOR handles the filings

Illustrative, based on the employer social-security rate above. An EOR adds its own service fee on top of this total and runs the income-tax withholding and statutory filings, which are withheld from the employee's pay, not paid by you.

Income tax in United Kingdom

Income taxPaid by employee · progressive
$0 to $12,5700%
$12,571 to $50,27020%
$50,271 to $125,14040%
$125,141 +45%
Employer contributions
Social security18%
Employee contributions
Social security8%

Employment-law essentials

The rules an EOR enforces in your contracts, and the ones most likely to trip you up if you tried to hire in United Kingdom on your own.

Working time

Standard full-time hours apply; overtime is regulated.

Pay & 13th salary
Minimum wage£2,203
Payroll cyclemonthly
13th-month salarynone
Leave
Paid annual leave (minimum, once eligible)28 days
Public holidays8 days
Maternity leave52 weeks
Paternity leave2 weeks
Termination
Notice period (average over 1, 5 and 10 years)5.3 weeks
Severance pay (average over 1, 5 and 10 years)5 weeks

Figures from the cited sources. Notice and severance are averages over 1, 5 and 10 years of service, not the amount for any one employee. Collective agreements or contracts can be more generous; an EOR applies whichever is correct for the role.

What changed in United Kingdom

Checked against official sources on .

No rule changes recorded since we began logging them.

EOR vs. opening your own entity in United Kingdom

Use an EOR when…
You're hiring one to a handful of people in United Kingdom.
You want someone working in weeks, not months.
You'd rather not own local payroll, tax and compliance.
You're testing the market before committing.
Open your own entity when…
You're scaling to a large local team long-term.
Per-employee EOR fees outweigh the cost of an entity.
You need full control of local employment and IP.

Choosing an EOR for United Kingdom

Providers with strong United Kingdom coverage onboard faster and carry less risk. A shortlist to start from:

Compare all EOR providers in United Kingdom

Best employer of record in the United Kingdom: ranked providers

Local players in United Kingdom

EOR and global-employment providers headquartered in United Kingdom:

Common questions about hiring in United Kingdom

Common questions about hiring in United Kingdom through an EOR.

Do I need a legal entity to hire someone in United Kingdom? +
No. An Employer of Record (EOR) already has a legal entity in United Kingdom and employs the person on your behalf, so you can hire compliantly without opening your own entity. You manage the day-to-day work; the EOR handles the local contract, payroll, taxes and statutory benefits.
How much does it cost to employ someone in United Kingdom? +
On top of gross salary, employers in United Kingdom contribute roughly 18% in social security and statutory costs. An EOR adds its own service fee on top of that total employment cost.
What is the minimum wage in United Kingdom? +
The statutory minimum wage in United Kingdom is £2,203. Pay below this is not permitted, and an EOR will hold contracts to at least this floor.
How hard is it to terminate an employee in United Kingdom? +
Averaged across 1, 5 and 10 years of service, an economic dismissal in United Kingdom comes with notice of 5.3 weeks and severance of 5 weeks. The amount owed depends on the reason for termination and the employee's tenure. An EOR runs the offboarding in line with local law to limit your risk.
How much paid leave do employees get in United Kingdom? +
Employees in United Kingdom are entitled to 28 days of paid annual leave; employers may count public holidays inside that minimum. Statutory leave is one of the entitlements your EOR administers automatically.
About the author
Robbin Schuchmann
Robbin Schuchmann
Co-Founder at EOR Overview
Robbin is the co-founder of EOR Overview, an independent research site for Employer of Record services. He has been in the international hiring space for over a decade.
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