United Kingdom 🇬🇧
Congratulations on your decision to hire employees in the United Kingdom! The UK is known for its highly skilled and diverse workforce. It can be an attractive destination for international businesses looking to hire employees, particularly those in the technology, finance, healthcare, and engineering sectors. Plane makes this process easy for you by providing automated tax document collection, payroll, benefits, and more. This ensures compliance and efficiency throughout the process. Navigating the hiring process in a new country can be challenging, so we've compiled the details below to help guide you.
Currency
GBP
Onboarding
2.5 weeks minimum
Employer Cost
20.80%
Pay Frequency
Monthly
Public Holidays
8
5 Considerations Before Hiring in the UK
As an employer in the UK, it is important to have a comprehensive employment contract outlining the employment relationship's terms and conditions. The contract should include compensation, benefits, vacation time, and sick leave policies. Before onboarding a new employee in the UK, take a moment to consider the following questions:
Getting Started with Hiring in the UK
Employment Contract
Fixed-term vs. Indefinite-term Contracts
In a fixed-term contract, an employee has an agreement with the organization they are working for, but their contract ends on a specific date or upon completion of a specific task. In an indefinite-term contract, the employee has an agreement with the organization they are working for, but their employment has no specified end date.Employee Rights
Employees on a fixed-term contract are entitled to the same treatment as employees on an indefinite-term contract. It's possible for an employer to have different terms for a fixed-term contract employee if they can show there is a good business reason for doing so. Otherwise, employers must ensure that fixed-term employees receive:- the same pay and conditions as permanent staff
- the same or equivalent benefits package
- information about permanent vacancies in the organization
- protection against redundancy or dismissal
Terminating a Fixed-term Contract
The contract will typically end automatically on the agreed-upon date, and no notice is needed from the employer.Not Renewing a Fixed-term Contract
When a contract is not renewed, it is considered a dismissal. If the employee has provided at least two years of service, the employer must show that there is a fair reason for not renewing the contract. An employee may not be unfairly dismissed after two years of service and is entitled to a written statement of reasons for not renewing the contract after one year of service.The employee may be entitled to statutory redundancy payments if they have provided two years of service and the reason for non-renewal is redundancy.Payroll Timelines and Dates
Pay Frequency: Employee payroll is monthly. Employees receive their pay via direct deposit by the last working day of the month.Payroll Change Cutoff Dates: To meet payroll deadlines, any changes must be submitted to hire@pilot.co by the cutoff date.For the UK, the payroll change cutoff date is on the last business day of the previous month. For example, changes to June payroll would need to be received no later than May 31 (if May 31 is a business day).Pilot sends payroll summaries to admins at the end of the second week of the month. After that, charges are automatically debited. Payroll summaries are also available to admins in their Pilot accounts. Payday may vary based on country requirements.
Working Hours
In the UK, full-time employees typically work between 35 to 48 hours per week, with the average work week being 40 hours. Employees who work less than 35 hours per week are generally considered part-time, while those who work 35 hours or more per week are considered full-time. Despite their reduced hours, part-time employees are entitled to the same benefits as full-time employees, including sick pay, maternity/paternity/adoption leave and pay, pension benefits, promotions, training, career development, and holidays.
Public Holidays
The UK has 9 public holidays (2023):
- New Year’s Day (substitute day)
- Good Friday
- Easter Monday
- Early May bank holiday
- Spring bank holiday
- Summer bank holiday
- Christmas Day
- Boxing Day
Compensation
To check remote salary data in the UK by job title, you can use Plane's Remote Compensation Tool.Although not mandatory, employers often include cash and non-cash bonuses as part of their compensation packages for employees in the UK.
Health Insurance Benefits
Ordinary residents in the UK are entitled to free treatment from the National Health Service (NHS). For more information about the services offered by the NHS, visit their website.Employees may choose to enroll in supplemental healthcare. Please see "Do you want to offer private supplemental health insurance?" in the section above for our recommendations.
Sick Leave
Employees are eligible for Statutory Sick Pay (SSP) if they are sick for at least 4 consecutive days, including non-working days. However, you do not pay employees SSP for the first 3 working days they are off sick, unless they were off sick due to COVID-19 before March 25, 2022, or they received SSP within the last 8 weeks that already included a 3-day waiting period.SSP is paid for qualifying days, which are the days an employee normally works. It is paid in the same way as wages, with tax and National Insurance deducted. The weekly rate for SSP is £99.35 for up to 28 weeks.
Vacation Leave
In the UK, employees are entitled to 5.6 weeks (28 days) of paid leave, which includes bank holidays, as per their statutory annual leave entitlement. Full-time workers are entitled to at least 28 days (5.6 weeks) of paid annual leave per year. Part-time workers are entitled to at least 5.6 weeks of paid holiday, but the number of days may be fewer than 28, depending on their schedule. For instance, a part-time worker who works 3 days a week must receive at least 16.8 days of leave per year (3 × 5.6).Annual leave accrues from the first day of employment and can be carried over. However, an employer can set their own leave year. The general notice period for taking leave is at least twice as long as the leave period a worker wants to take, plus 1 day. Employers can choose to offer more leave than the legal minimum.
Maternity / Paternity / Parental Leave
In the UK, eligible employees are entitled to take up to 52 weeks of maternity leave, with the first 26 weeks being "Ordinary Maternity Leave" and the last 26 weeks being "Additional Maternity Leave." This leave cannot start earlier than 11 weeks before the expected childbirth week, unless the baby is born prematurely. After giving birth, employees must take at least 2 weeks of leave. During maternity leave, eligible employees can receive Statutory Maternity Pay (SMP) for up to 39 weeks. SMP is paid by the employer and is calculated as follows (with Tax and National Insurance deducted):
- First 6 weeks: 90% of the employee's average weekly earnings (AWE) before tax
- Remaining 33 weeks: £156.66 or 90% of their AWE (whichever is lower)
Employment / Termination
In the UK, employers are required to provide notice to their employees before terminating their employment. The length of notice required depends on the employee's length of service, ranging from 1 to 12 weeks. Employers may offer longer notice periods in the contract. However, it's important to note that MTA (Mutual Termination Agreement) is the only termination option available. If an employee is laid off due to redundancy, employers should try to avoid redundancies by reassigning redundant employees, reducing overtime, ceasing to employ contractors and freelancers, or instituting temporary or short-term layoffs instead of permanent ones. If layoffs are still necessary, they will be facilitated via an MTA.We ask that you give us as much notice as possible and involve us right from the beginning of the process so we can better support and guide you through the process. Involuntary termination can take time to negotiate with the employees to mutually agree and end on good terms. Here you can find additional information on how to terminate an employee.
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Annual cost of employment*
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*rates for: July 23, 2024
Once you have sorted out the details mentioned above, you can add the employee to the Plane platform. We provide a step-by-step workflow that shows what tasks need to be completed, as well as real-time updates and notifications. This way, you can stay on top of the hiring process at all times. With Plane, you can confidently hire, knowing that you have a powerful platform at your disposal to manage the entire process from start to finish. Here are the instructions for adding a new employee to the platform:
How to hire and onboard an employee
Plane offers a guided process for administrators and managers to hire and onboard their new employees...
Learn moreHiring an employee in a new country can be complex, but with the right guidance and resources, it can be a smooth and successful transition. At Plane, we're committed to helping you navigate the process of hiring an employee in the UK. We'll keep you updated with the latest regulations and employment laws. Best of luck with your new hire, and welcome to the UK!
Frequently Asked Questions
Here are the answers to some common questions about hiring employees in the UK with Plane:
Employment Laws in the United Kingdom: A Guide for US Companies
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6 Best Practices for Successfully Onboarding Remote Employees
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