Hiring in the UK

Despite the challenges, the UK remains an attractive place to invest in, partly due to robust, company-focused regulation and employment law geared to attract a competitive and engaged workforce.

Contracts of employment.

By law, PEO UK employment contracts can be quite brief and can even be based on a verbal agreement. Employers tend to flesh out contracts with comprehensive information, such as bonuses (even if discretionary), salary, benefits, notice period, and termination clauses etc., as this prevents misunderstandings later in someone’s service.

Working hours and holidays.

There is a maximum 48-hour working week averaged over 17 weeks (the employee can waive this in writing. All employees are entitled to a prorated 28 days’ vacation, including the eight standard public holidays in England and Wales (there are different public holidays in Scotland and Northern Ireland).

Notice period.

Employers must give employees notice if their employment is to be terminated. Notice period is often clarified in contracts (usually starting at one month and increasing with service), but minimum legal notice periods are as follows:

  • one week notice for one month and less than two years of service.
  • one week notice for each year for between two and 12 years of service.
  • 12 weeks notice for 12+ years of service.

Sick leave and parental leave.

Statutory sick pay is paid at 99.35 pounds per week (as of 2021), up to a maximum of 28 weeks, and is paid out after the third day of absence. There can be discretionary company sick pay on top of this.

  • 90% of average weekly earnings (before tax) for the first 6 weeks.
  • £156.66 or 90% of average weekly earnings (whichever is lower) for the next 33 weeks (as of 2022).


All employers in the UK must deduct income tax from their employees wages (how much tax your employee pays depends on their level of earnings). In addition to this, there are employer and employee contributions to National Insurance (NI) which is similar to social security. All tax and NI is deducted via the UK governmental tax office (HMRC), via an automated system called Pay As You Earn (PAYE).


The UK mandates an ‘auto enrolment’ pension scheme that requires employees to contribute 3% towards their employee’s pension (employees can opt out of this pension). Pensions aside, there is not much statutory right to benefits in the UK; this includes private healthcare. Employers will generally offer a suite of benefits which may include healthcare, although NI is connected to funding the NHS, the UK free healthcare service. Given the competitive labour market in the EOR UK, benefits are an important aspect of job offers.


The UK is weathering many economic challenges but remains an attractive business environment, partly due to it sustaining a skilled workforce through many means, including robust employment law.



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