UNITED KINGDOM - Employer of Record Service

If you are embarking on expanding abroad where you have not incorporated a legal entity yet, you will need our in-country Employer of Record (EOR) services to be able to hire employees fast and in a compliant manner. We make hiring an easy, effective and highly cost efficient experience and take on the burden of all administration. 

Your candidates get hired by CoberonChronos’ PEO legal entity in accordance with local Labor Code and can be onboarded in days by signing an employment contract we can provide in English. The employed is eligible and assigned to work with and on your company’s behalf exactly as if he or she were your employee in-country. We prepare the monthly salary, benefits and allowances payroll based any timesheet provided and we calculate all expense reimbursement costs too.




Employment At a Glance

Hiring in the UK

Generally, there are some advises and guidance to follow while hiring employees in the United Kingdom, such as:

  • Whether offering market standard benefit packages incl. supplemental health insurance.
  • Whether offering additional pension plan benefit over the state one.
  • Additional option may be offered for C-level / senior management employees including the stock option benefit, car allowance, premium insurances, etc.
  • The EU Data protection requires some information to be secured especially for protecting data handling and exchanges to employees' personal data.

 Employment contract in UK

In the UK an employee is an individual who has entered into, or works under, a contract of employment. The employment contract must be in writing and some important terms & conditions are advised to be included over the general details of the name, job title, work place and working hours: 

  • How much and how often the employee will be paid (monthly or bi-weekly wages).
  • Terms and conditions relating to holiday entitlement. 
  • Terms and conditions relating to sickness absence and sick pay. 
  • Terms and conditions relating to pensions (including whether the employee's pension is covered by a contracting-out certificate).
  • Notice periods to terminate employment.
  • Non-compete clauses.


Probationary period

In the UK probationary periods normally last for about 3 to 6 months, sometimes longer, although if it’s a short-term, temporary contract, they can often be much shorter. Both parties should have the right to terminate the employment, however, the employment contract must be checked if the employer is required to give any notice or vice versa (see statutory / contractual notice details below).

Health Insurance in the UK

In the UK there is a national social security program called National Insurance Contribustions (NIC) and the primarily health coverage is provided by the contributions are paid by employers and their employees into. In law, the employee contribution is referred to as the 'primary' contribution and the employer contribution as the 'secondary', but they are usually referred to simply as employee and employer contributions. The employee contribution is deducted from gross wages by the employer, with no action required by the employee. National insurance contributions (NICs) determines eligibility for certain benefits - including the state pension. 

There are a number of milestone figures which determine the rate of NICs to be paid and mostly based on the yearly earnings, where the "earnings" refers to an employee's wage or salary.  The contribution is currently 13.8% for all salary, benefit compensations and expense reimbursements.

Pension Plans in the UK
In the UK there are additional pension contributions (schemes) are available over the statutory state scheme (3%) and most employees in the UK may request such additional pension plan. These have been available only to employees paying National Insurance (NIC) contributions and to certain exempted groups (not including the self-employed).
Supplementary Health insurance and Benefits in the UK

Many employers also provide supplementary benefits such as life, medical and dental insurance for their employees even it is not a statutory requirement. 

In case of the employee travels abroad it is advised to get the employee covered by travel insurance policy because the UK insurance plans may cover only very basic emergency emergency treatments shwoing the EU health insurance card based on being covered with employer's contributions to NIC.

Public Holidays and Vacation in the UK

England and Wales celebrates several public holidays for which employees are given the day off, including:

  • New Year’s Day - 01 January 
  • Good Friday - 30 March
  • Easter Monday- 02 April
  • Early May Bank holiday: 07 May
  • Spring Bank holiday: 28 May
  • Summer Bank holiday: 27 August
  • Christmas Day: 25 December
  • Boxing Day: 26 December
All employees have the right to 28 days paid holiday each year. If an employees starts or ends work part way through a holiday year he is entitled to paid holiday on a pro rata basis. 

There are currently eight permanent public and bank holidays in England and Wales. Although these can be (and frequently are) included in the minimum holiday entitlement of an employee 5-26 days of vacation and 2-3 public holidays gets paid by the employer), however an employer does not have to let an employee take holiday on these days, if it otherwise provides him/her with his/her statutory holiday entitlement.

13th month salary in the UK
There is no mandatory requirement for a 13th month salary by law.


Bonus payments in the UK
It is entirely up to the employer what bonus to pay or whether to pay at all. Any employee may receive for example individual bonuses based on performance or based on corporate structure bonus plan linked to individual/department/corporate performances.

entirely up to the employer to set the day to day wirking hours according to business need. HHowever, there is a maximum of 48 hours per week limit which can not be extended by neither of the employees, averaged over 17 weeks. 

Sick Leave in the UK
Employees are entitled to a Statutory Sick Pay for up to 28 weeks but absent from work must be documented with doctors' note to fullfil sick pay obligations.


Maternity/Shared Parental Leave in the UK
Currently, all pregnant employees are entitled to both:
  • 26 weeks' ordinary maternity leave (OML).
  • 26 weeks' additional maternity leave (AML).
Employees do not have to take all 52 weeks of their maternity entitlement, but must take 2 weeks' compulsory leave directly after the baby is born (or 4 weeks, in the case of some factory workers).
Employees entitled to take maternity leave are also entitled to receive up to 39 weeks' statutory maternity pay (SMP) if they meet some requirements. 
Also, shared parental leave (SPL) and shared parental pay (SPP) is supported and also applies for parents who adopt. 

If an expectant employee chooses to take SPL with her partner (instead of taking OML/AML herself), the couple can share up to 50 weeks' SPL and up to 37 weeks' ShPP, between them. However, the two weeks' compulsory maternity leave after the baby is born is still applies which the mother must still take.

Termination of the Employment Contract and Severance in the UK

Basic facts:
  • Both the employee and employer are normally entitled to a minimum period of notice on termination of employment.
  • Notice periods should be one of the main terms and conditions of employment and included in the employee's written statement.
  • It's always best to write out any form of notice to make it clear it is the termination of employment.
  • In most cases employees should be paid their normal pay during the notice period.
  • Normal notice applies when employment is being terminated due to redundancy.

An employment contract can be terminated at any time by either party, it could be a resignation or dismissal, redundancy or retirement. For a notice to be effective it should be in writing and specify the date of termination.

There are two types of notice period: statutory and contractual.
Statutory notice is the minimum legal notice that can be given. Employers should give the employee:
  • one week's notice if the employee has been employed by the employer continuously for one month or more, but for less than two years. This minimum is unaffected by longer service.
  • two weeks' notice if the employee has been employed by the employer continuously for two years, and one additional week's notice for each further complete year of continuous employment, up to a maximum of 12 weeks. For example if an employee has worked for 5 years then they are entitled to 5 weeks' notice.
  • twelve weeks' notice if the employee has been employed by the employer continuously for twelve or more years

Contractual notice is the amount of notice that the employer can set out in the terms and conditions of employment which can be longer than the statutory notice, but usually this notice period is 1 month for the majority of employees and up to 3 months for senior and/or management employees. For example the statutory notice an employee must give to an employer is one week, however, an employer can state within the terms of employment that an employee must give one month's notice.

Fixed-term contracts: generally, no notice of the expiry of a fixed-term contract will need to be given, however, if the contract is terminated by giving notice before its expiry date then the correct amount of statutory notice should be given.

Regarding to the severance, an employee who has been continuously employed by his employer for two years is entitled to a Statutory Rdundancy Payment (SRP) if he/she is dismissed on grounds of redundancy. Severance is calculated in accordance with a statutory formula based on the employee's age, salary and length of service (one weeks's pay for each year of employment up to the age of age 40, 11/2 week's pay for each year of employment over the age of age 40). There are no further statutory rights to severance payments, although an individual's employment contract may provide for some form of severance payment.

Failure by the employer to give the correct notice period may amount to a breach of contract and employees may make a claim to an employment tribunal.Currently, any redundancy payment or other such compensation payment may be paid free of tax up to GB£30,000 in aggregate and without payment of National Insurance contributions. However, certain changes to this will take effect from April 2018.

Employment Taxes in the UK

There is a sytem called PAYE (Pay as You Earn) where employers must contribute the amounts deducted from each employee's salary, Including the Personal Income Tax and a National Insurance contribution (NIC).



Why Coberon Chronos

Hiring a small or large number of staff in the United Kingdom can be time consuming, expensive and complex without the extensive knowledge of the local Labor Code but mostly to apply it to the best practices.

Coberon Chronos can help your business to hire your candidates, handle all the hiring administration and payroll and ensure that you’re in compliance with local labour laws, without the burden of setting up a large office or subsidiary abroad in a rush.
Our Global Employer of Record and PEO services lets you focus on running your key business in a new country.
If you have an immediate EOR needs to just would like to discuss how Coberon Chronos can provide a seamless employee-leasing or PEO solution for hiring employees in UK, please contact us at sales@coberonchronos.com.

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