Hiring in the United Kingdom
- Minimum wage
- £12.71 / hour
- Average salary
- £39,039 / year — median
- Employer contributions
- 18%
- Income tax
- 20–45%; Scotland 19–48%
- Paid leave
- 28 days
- Public holidays
- 8–10 in 2026
- Probation
- Contractual; no set limit
- Notice period
- 1–12 weeks
General information, not legal or tax advice — confirm with a local adviser before you act.
Contents
Foreign companies can hire in the United Kingdom through their own entity, an employer of record, or a genuinely independent contractor; an overseas employer without a UK presence may also operate PAYE voluntarily for direct employment, subject to its other duties. 4dev.com works with UK contractors through its Contractor Platform, a global contractor platform for contractor operations and documents. The headline 18% employer-contribution figure combines nominal rates applied to different earnings bases.
Three ways to hire in the United Kingdom
Choose the route according to who employs the person and whether the work is genuinely independent.
| Route | Legal employer | What you pay on top of salary | How you end it |
|---|---|---|---|
| Your own entity | Your UK entity | 18% nominal employer contributions; National Insurance and pension contributions have separate earnings bases | Contractual notice, subject to statutory minimum notice of 1–12 weeks according to service |
| Employer of record | The employer of record | Employment cost plus the provider's quoted terms | The employment agreement and applicable employment rules determine the process |
| Contractor | No employer where the individual is genuinely self-employed | The engagement follows the commercial contract; employee-contribution assumptions do not determine a genuine contractor arrangement | The contract's termination clauses apply; statutory dismissal rules do not govern a genuinely self-employed engagement |
The 18% does not apply to every pound of salary. Employer National Insurance starts above a monthly threshold; pension contributions use a separate qualifying-earnings band. Statutory employment notice of 1–12 weeks depends on service: at least one week after one month, then one week for each full year through the relevant range, capped at twelve weeks. Voluntary PAYE for an overseas employer without a UK presence belongs within direct employment and does not settle the employer's other duties.
The UK labour market and salary benchmarks
Use the national earnings median as a broad benchmark and advertised developer pay as a role-specific recruitment reference.
Salary reference points
| Full-time employee earnings | £39,039 / year — median; April 2025 gross annual earnings for full-time employees in jobs held at least a year | ONS — Employee earnings in the UK |
| Software Developer vacancies | £65,000 / year — median quoted annual salary in UK vacancies posted in the six months to 15 October 2026 | IT Jobs Watch — Software Developer Job Trends |
The ONS figure covers full-time employees who had held their jobs for at least a year; the developer figure comes from advertised vacancies over six months. Use the latter for a role-specific recruitment reference, without treating the two figures as a salary trend.
Registering as a UK employer, step by step
Register for PAYE before the first payday, while completing the employment checks and records on their own deadlines. HMRC publishes no fixed end-to-end setup time.
| Step | What happens | Takes |
|---|---|---|
| Choose the direct-employment setup | An overseas employer without UK presence can choose voluntary PAYE for UK-taxable employment income, while assessing its other applicable duties | Before PAYE registration |
| Register for PAYE | Register with HMRC to obtain an employer PAYE reference | Before the first payday, and no more than two months before staff are first paid |
| Complete pre-employment checks and cover | Check the person's right to work before employment; arrange Employers' Liability insurance from the start where it applies in Great Britain | Before employment; insurance from the start of employment where applicable |
| Give written particulars | Provide the principal written statement | Day one; the wider written statement follows within two months of the start date |
| Assess pension duties and run the first pay cycle | Assess automatic-enrolment duties against the £10,000 annual trigger, then complete PAYE reporting and payment tasks for the relevant tax month | Each tax month runs from the 6th of one month to the 5th of the next |
| Total | HMRC does not publish a fixed end-to-end duration; the sequence depends on HMRC processing and employer readiness | No fixed official total |
Hiring and onboarding: legal limits and a first-day checklist
Confirm employment status and the person's right to work before the start date, then complete the records due on day one.
Legal limits before an offer
A job title does not determine status: a contractor can be genuinely self-employed, a worker or an agency employee. Confirm the proposed arrangement before relying on a contractor route, and check the prospective employee's right to work before employment. Where a Skilled Worker visa is involved, the sponsor cannot hire the person out for another organisation's ongoing routine role without retaining full responsibility for the duties and outputs.
Probation is optional and has no fixed statutory length. Record any probation terms in the employment documents; statutory notice and other rights still need separate attention.
Onboarding checklist
- Record the agreed employment status and complete the right-to-work check before employment.
- Issue the principal written statement on day one and keep the wider statement due within two months in the onboarding record.
- Register for PAYE before the first payday and prepare the first tax-month tasks.
- Arrange Employers' Liability insurance from the start where it applies in Great Britain.
- Assess automatic-enrolment duties and prepare the first pay-cycle records.
Minimum wage: the rate depends on age and apprenticeship year
From 1 April 2026, the statutory hourly floor is £12.71 / hour for workers aged 21 or over. Younger workers and eligible apprentices have different rates.
| Aged 21 or over | £12.71 / hour from 1 April 2026 | UK Government — National Minimum Wage and National Living Wage rates |
| Aged 18–20 | £10.85 / hour from 1 April 2026 | UK Government — National Minimum Wage and National Living Wage rates |
| Under 18 | £8 / hour from 1 April 2026 | UK Government — National Minimum Wage and National Living Wage rates |
| Eligible apprentice | £8 / hour from 1 April 2026; applies to an apprentice aged under 19, or aged 19 or over in the first apprenticeship year | UK Government — National Minimum Wage and National Living Wage rates |
The top rate covered workers aged 25 and over in 2020, 23 and over in 2021–2023, and 21 and over from 2024. The youth and apprentice rates remain separate from this series.
Taxes and contributions: different earnings bases
Employee income-tax bands are marginal: 20%, 40% and 45% in England, Wales and Northern Ireland, and 19%, 20%, 21%, 42%, 45% and 48% in Scotland. The headline range is 20–45%; Scotland 19–48%. Employer National Insurance and pension costs need separate calculations.
For a standard NI category A employee, employer Class 1 National Insurance is 15% on earnings above the £417 monthly secondary threshold. The minimum employer pension contribution is 3% on monthly qualifying earnings between £520 and £4,189. Those rates add to the nominal 18%, but their distinct floors, and the pension cap, change the cash amount due.
The annual automatic-enrolment trigger is £10,000. Eligible employers may reduce annual NI liability by up to £10,500 through Employment Allowance. The 0.5% Apprenticeship Levy applies where the UK annual pay bill exceeds £3 million, subject to its allowance and connected-employer rules.
What an employee actually costs you
The two examples apply monthly NI and pension thresholds separately for an eligible enrolled employee on standard NI category A.
| Monthly scenario | Gross | Employer NI | Minimum pension | Employer additions | Total monthly cost | Annual cost: 12 monthly periods | Salary source |
|---|---|---|---|---|---|---|---|
| ONS median full-time salary (April 2025) | £3,253.25 | £425.44 | £82.00 | £507.44 | £3,760.69 | £45,128.28 | ONS — Employee earnings in the UK |
| Software Developer vacancy median (October 2026) | £5,416.67 | £749.95 | £110.07 | £860.02 | £6,276.69 | £75,320.28 | IT Jobs Watch — Software Developer Job Trends |
Each annual total represents 12 identical monthly pay periods, with gross monthly pay and each contribution rounded to pennies before multiplication. The figures use the monthly NI floor of £417 and pension band of £520–£4,189; they are not an annual-pay-period assessment. They exclude benefits, provider fees, Employment Allowance, the conditional levy and non-standard NI categories.
Working time and overtime
Working time is normally limited to an average of 48 hours a week over 17 weeks, unless the worker chooses to opt out. There is no general statutory overtime premium: the contract may set overtime terms, but average pay across all hours worked must still meet the minimum wage.
Leave, sick pay and parental leave across the UK
For a regular five-day worker, statutory paid annual leave is 28 days; the regional bank-holiday calendar ranges from 8–10 in 2026.
| England and Wales | 8 bank-holiday dates in 2026 | UK Government — UK bank holidays data |
| Scotland | 10 bank-holiday dates in 2026 | UK Government — UK bank holidays data |
| Northern Ireland (NI) | 10 bank-holiday dates in 2026 | UK Government — UK bank holidays data |
The 28 days equals 5.6 paid weeks for a regular five-day worker and remains capped at 28 days for staff who work six days a week. An employer may include bank holidays within that entitlement, so the regional calendar does not create an additional paid-leave allowance by itself.
Since 6 April 2026, eligible employees can receive Statutory Sick Pay from the first full day of sickness, for up to 28 weeks. The weekly amount is the lower of £123.25 or 80% of average weekly earnings.
Statutory Maternity Leave lasts 52 weeks, while Statutory Maternity Pay lasts up to 39 weeks under its own calculation and eligibility conditions. Statutory Paternity Leave may last up to two weeks, together or in separate one-week blocks. Great Britain introduced day-one paternity and unpaid parental leave on 6 April 2026; that change does not make every type of leave payable from day one.
Termination: notice, redundancy and the 2027 dismissal change
Probation is Contractual; no set limit. Statutory employer notice runs 1–12 weeks according to service.
For Great Britain, statutory notice is at least one week after one month of service, then one week for each full year from two to under twelve years, capped at twelve weeks. Northern Ireland also uses one week per complete service year from two years, capped at twelve weeks. Set a contractual probation review point with these service-based notice rules in mind.
Employers will also need tighter probation management. Probation can no longer be treated as an informal “try before you buy” period.
— Sally Hulston, Partner & Head of Office, Manchester; Colin Leckey and Gemma Taylor, Partners, Lewis Silkin
Statutory redundancy pay in Great Britain usually requires at least two years of service. For redundancies from 6 April 2026, the Great Britain weekly-pay cap is £751 and the maximum payment is £22,530; Northern Ireland's weekly cap is £783 and its published maximum is £23,490, where statutory eligibility applies.
For ordinary unfair-dismissal claims, Great Britain generally requires two years of service under the current rule; Northern Ireland ordinarily requires one year. Automatic-unfair-dismissal exceptions can apply. Subject to parliamentary process, Great Britain is scheduled to move to a six-month qualifying period for most employees dismissed from 1 January 2027, with compensatory awards uncapped. The scheduled change does not extend to Northern Ireland.
Recent changes to UK employment law
The sick-pay and umbrella-chain PAYE changes took effect in April 2026. Later Great Britain measures have scheduled dates, some subject to parliamentary process.
Commenced
- 6 April 2026 — United Kingdom. Statutory Sick Pay became payable from the first full day of sickness, with the new earnings-based payment rule. For payments from the same date, an agency, or the end client where there is no agency, can be pursued for unpaid PAYE in qualifying labour-supply chains that include an umbrella company.
- 6 April 2026 — Great Britain. Day-one paternity leave and unpaid parental leave took effect, and the maximum collective-redundancy protective-award period doubled.
- 7 April 2026 — Great Britain. The Fair Work Agency was established.
- 1 October 2026 — Great Britain. Most Employment Tribunal claim periods rose from three to six months. The Scottish breach-of-contract claim change has a later effective date.
Scheduled
- 30 October 2026 — Great Britain. The government schedules stronger employer sexual-harassment prevention duties and protections concerning third-party harassment.
- 9 November 2026 — Scotland. The six-month Employment Tribunal claim period is scheduled to extend to breach-of-contract claims.
- 1 January 2027 — Great Britain. The ordinary unfair-dismissal qualifying period is scheduled to become six months for dismissals from that date, with compensatory awards uncapped. This is a Great Britain measure; Northern Ireland’s ordinary qualifying period remains one year under the current rule.
Where UK geography changes the answer
Scottish income-tax bands, regional bank holidays and Northern Ireland's dismissal rules require separate payroll and exit planning.
Scotland changes income-tax payroll
For 2026/27, England, Wales and Northern Ireland use employment-income marginal rates of 20%, 40% and 45%, with a standard personal allowance of £12,570. Scotland uses six marginal bands of 19%, 20%, 21%, 42%, 45% and 48%, while retaining that £12,570 standard allowance. Use the employee's Scottish tax position for income-tax withholding; employer National Insurance is a separate calculation.
Holiday planning follows the regional calendar
Statutory annual leave remains 5.6 paid weeks, or 28 days for a regular five-day worker, and an employer may include bank holidays within that entitlement. The official 2026 calendar has 8 dates in England and Wales, 10 in Scotland and 10 in Northern Ireland. Use the calendar for the employee's location when planning cover. Additional regional dates do not automatically increase statutory leave.
Northern Ireland has its own exit and agency rules
For ordinary unfair-dismissal claims, Northern Ireland ordinarily uses a one-year service requirement, while Great Britain currently uses two years before its separately scheduled 2027 change. Northern Ireland also has its own statutory redundancy figures: a £783 weekly-pay cap and £23,490 maximum, where eligibility applies; its statutory notice rule is one week per completed service year from two years, capped at twelve weeks. For temporary agency work, Northern Ireland has its own regime: qualifying agency workers gain equal treatment after 12 weeks in the same job.
What a hiring mistake costs and who pays
The legal employer and the worker's status determine which statutory duties apply. A provider agreement does not automatically transfer every client exposure.
| Party | Risk | Amount |
|---|---|---|
| Direct employer in Great Britain | Missing required Employers’ Liability insurance | Up to £2,500 per day without proper insurance |
| Employer responsible for pay | Minimum-wage underpayment | Arrears plus a normal penalty of 200% of the underpayment |
| Legal employer where statutory redundancy entitlement applies | Statutory redundancy | Great Britain: weekly pay capped at £751 and maximum payment £22,530; Northern Ireland: weekly-pay cap £783 and published maximum £23,490 |
For direct employment, the hiring employer is the legal employer for these employer-side duties. The redundancy amounts are limits, not automatic payments: Great Britain usually requires two years of service, and the regional eligibility rules still apply. Employers’ Liability insurance is a Great Britain requirement and normally requires at least £5 million of cover from the start of employment.
Classify the engagement before assigning risk: a contractor may be genuinely self-employed, a worker or an agency employee. The contract label alone does not settle statutory rights or underpayment exposure. An employer of record arrangement changes who employs the person, but the United Kingdom employer of record guide explains why chain-specific client duties still need checking.
Questions people actually ask
Can a US company hire a UK employee without a UK subsidiary?
Yes. An overseas employer without a UK presence can voluntarily operate PAYE on UK-taxable employment income, while meeting its other applicable duties. That is direct employment; an employer of record employs the person under a separate route, and a contractor arrangement depends on genuine independence.
What is the minimum wage in the UK in 2026?
From 1 April 2026, the National Living Wage is £12.71 an hour for workers aged 21 or over. The rate is £10.85 for people aged 18–20 and £8 for under-18s and eligible apprentices. An apprentice aged 19 or over receives the apprentice rate only in the first year of the apprenticeship.
What is the average salary in the UK?
The ONS median gross annual earnings figure is £39,039 for full-time employees who had held their jobs for at least a year in April 2025. It is a median for that defined employee population, rather than an average for every worker or a salary target for a particular role. Use it as a reference point alongside the role-specific market evidence in the salary section.
How much does a UK employee cost beyond salary?
For the ONS median salary scenario, £3,253.25 gross monthly pay produces £507.44 of employer National Insurance and minimum-pension additions, for a total monthly cost of £3,760.69. That illustration assumes an eligible enrolled employee, standard NI category A and a qualifying-earnings pension scheme. It uses monthly thresholds and rounding, and excludes benefits, provider fees, Employment Allowance and the conditional levy.
Are bank holidays extra to 28 days of leave?
Not necessarily. A regular five-day worker has 28 days, or 5.6 paid weeks, of statutory annual leave, and an employer may include bank holidays within it. The 2026 calendar has 8 bank-holiday dates in England and Wales and 10 in Scotland and Northern Ireland, so use the relevant regional calendar without adding those dates automatically to the statutory allowance.
Can I dismiss an employee during probation without notice?
Probation does not waive notice that is due under the contract or statute. In Great Britain, statutory employer notice begins at one week after one month of service and then rises with service to a maximum of 12 weeks; contractual terms may require notice sooner. Automatic-unfair-dismissal exceptions remain separate from the ordinary qualifying period.
What changes for dismissal in January 2027?
Subject to parliamentary process, most Great Britain employees are scheduled to gain the right to bring an ordinary unfair-dismissal claim after six months for dismissals from 1 January 2027, with compensatory awards uncapped. Until then, the ordinary Great Britain qualifying period is generally two years, while Northern Ireland ordinarily uses one year. The scheduled Great Britain change does not extend to Northern Ireland, and automatic-unfair-dismissal exceptions remain separate.
Sources
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