According to a 2025 report by the Office for National Statistics, over 22,000 foreign companies currently operate in the United Kingdom, with many actively hiring employees to tap into the UK’s skilled workforce and stable business environment.
Whether you’re looking to hire employees in the UK through your own legal entity or considering a faster route via an Employer of Record (EOR), there’s a lot to navigate from local labor laws to payroll and benefits.
This guide will help you cut through the noise, avoid legal potholes, and confidently hire in the UK, without losing your mind (or your budget).
Let’s start with the basics.
Why Hire Employees in the United Kingdom?
The UK remains one of the most attractive places to expand a team — even post-Brexit. Here’s why:
- Skilled Workforce: The UK boasts a diverse, well-educated talent pool. Whether you need tech talent in London, finance pros in Manchester, or customer support in Glasgow, there’s a strong network of qualified workers in the UK.
- Ease of Communication: For English-speaking businesses, hiring in the UK removes a major language barrier.
- Business Infrastructure: The UK’s infrastructure and time zone overlap with much of Europe and North America, making it a practical hub for distributed teams.
- Remote Work-Friendly: UK employees and companies have embraced hybrid and remote models, which makes onboarding a new employee smoother for international employers.
Whether you’re looking to hire an employee or build an entire team, the UK gives you a competitive edge if you do it right.
Understanding Labor Law in the UK
Before you hire employees in the United Kingdom, you need a solid understanding of UK labor laws because what you don’t know can cost you.
Here’s a quick overview:
Employees Have Rights from Day One
An employee in the UK is protected by law the moment they start. This includes:
- The right to a written employment contract within two months
- Protection against unfair dismissal (after a qualifying period)
- Statutory sick pay, maternity/paternity leave, and more
Know the Difference: Worker vs. Employee
Not all workers in the UK are considered full “employees.” UK law makes a clear distinction between:
- Employees (with full rights)
- Workers (with limited rights)
- Self-employed contractors (with the least protection)
Misclassifying someone can lead to serious legal issues, especially if you’re not a UK employer or you’re hiring employees in the United Kingdom through an EOR.
Employment Law Compliance Is Not Optional
From working hours and holiday pay, to anti-discrimination rules, UK employment law is strict, and it’s enforceable even for foreign companies looking to hire remotely.
Bottom line? If you want to hire employees in the UK, you need to align your hiring process with UK employment laws. That means clearly defined contracts, fair pay, and compliance with the national minimum wage.
The Hiring Process in the UK
Let’s be honest, hiring employees in the UK sounds simple… until you actually start doing it.
Sure, the UK has a solid labor market, a well-defined legal framework, and a reputation for being business-friendly. But if you’re a foreign company trying to hire in the United Kingdom for the first time, it’s a bit like assembling IKEA furniture without the instructions, technically possible, but probably frustrating and definitely slower than it should be.
Here’s what to expect when you’re looking to hire a new employee in the UK, minus the HR jargon and legalese.
You Don’t Have to Set Up a UK Entity (But You Can)
Before you even post the job ad, you’ll need to decide:
Do you want to establish a legal entity in the UK, or use an Employer of Record (EOR)?
- Setting up an entity gives you full control and permanence, but it comes with a long list of admin tasks, UK tax registration, payroll setup, local banking, compliance, etc.
- EORs are a faster route for companies that want to hire employees in the UK without the paperwork headache. The EOR becomes the legal employer, while you handle the day-to-day management.
Whichever you choose, make that decision early, it affects how you pay employees, handle benefits, and draft employment contracts in the UK.
Writing the Job Description
Once you’re ready to start hiring, the first step is writing a job description that actually attracts UK talent. UK candidates tend to value:
- Work-life balance
- Clear salary bands (don’t say “competitive salary” unless it truly is)
- Remote or hybrid flexibility
- Learning and development opportunities
And yes, please include whether the job requires a UK visa. Being upfront about that saves you and the applicant time.
Interviewing UK-Style
The UK hiring culture leans more formal than, say, the US startup scene but it’s still people-first.
- Be aware of employment law during interviews: You can’t ask about age, marital status, plans for children, or health conditions.
- Keep records of your selection process in case you need to prove non-discriminatory hiring.
Also, UK workers expect timely responses. Ghosting candidates isn’t just bad form, it hurts your reputation.
Making an Offer (Yes, You Need to Put It in Writing)
You’ve found your perfect employee in the UK. Great! Now comes the important part: the offer.
In the UK, a verbal offer can be binding, but it should always be followed up with a written contract. More on that in the next section but for now, make sure the offer includes:
- Job title and responsibilities
- Start date
- Salary and bonus structure
- Work location (or remote terms)
- Eligibility for benefits in the UK
And don’t forget to include any probationary periods, which are common and legally allowed under UK employment laws.
Pre-Employment Checks: Do It Right
You’ll need to confirm your employee in the United Kingdom has the legal right to work in the UK. This is especially important for foreign nationals, failing to conduct the right checks can lead to penalties.
Depending on the role, background checks or references may also be part of the process.
TL;DR: Hiring in the UK is Structured, but Flexible
Compared to some markets, UK employment is fairly predictable but don’t confuse “predictable” with “easy.”
The steps involved in hiring, from choosing an EOR or legal entity, to drafting the job offer and verifying eligibility, require thought, time, and a bit of local know-how. But once you’ve done it right once, it gets easier.
And the best part? UK workers are typically loyal, professional, and open to remote or hybrid roles, which makes them an excellent investment for growth-focused businesses.
Employment Contracts in the UK
If you’re ready to hire employees in the UK, there’s one non-negotiable item to get right before your new employee starts: the employment contract.
In the United Kingdom, it’s a legal requirement to provide a written statement of employment within two months of the employee’s start date. But realistically, you should have that contract signed before day one.
Why? Because UK labor law heavily favors clarity and protection for the employee in the UK, and if there’s ever a dispute, vague contracts will come back to bite the employer.
Here’s what to include:
Key Terms Every UK Employment Contract Must Cover
- Job title and description
- Work location (and remote flexibility, if applicable)
- Start date and probationary period (usually 3–6 months)
- Salary and payment frequency (weekly/monthly)
- Working hours and overtime policy
- Holiday entitlement (the statutory minimum is 28 days for full-time employees, including public holidays)
Extras That Show You Know the Market
- Pension contributions: UK employers must automatically enroll eligible employees into a workplace pension
- Sick pay and family leave: These are protected under UK employment law, and employees are entitled to statutory minimums
- Notice periods and termination clauses
Even if you’re using an Employer of Record in the UK, you will typically provide the job description and performance expectations, while the EOR handles the legal contract and compliance.
And yes, the contract needs to be enforceable in the UK, meaning no clauses that violate UK labor laws, even unintentionally.
Paying Employees in the UK
So, you’ve made the hire — congrats! But now comes the less glamorous part of the process: figuring out how to pay employees in the UK without accidentally triggering a letter from HMRC (because they will write to you).
Whether you’re managing payroll directly or using an Employer of Record in the UK, here’s what you need to know to pay employees the right way.
Payroll in the UK: What You Must Handle (Or Outsource)
If you’ve set up a legal entity in the United Kingdom, you’ll need to:
- Register with HM Revenue & Customs (HMRC) as an employer
- Set up a compliant payroll system
- Deduct PAYE (Pay As You Earn) income tax and National Insurance contributions
- Submit real-time information (RTI) to HMRC every time you run payroll
- Provide a payslip to each employee in the UK
Sound like a lot? That’s why many foreign companies hiring in the UK opt for an Employer of Record, who handles all of this for you.
If you go it alone, using a local payroll provider or cloud-based UK payroll software can help you stay compliant and avoid penalties.
When and How to Pay Employees
Most employees in the United Kingdom are paid monthly, but some sectors (like retail or hospitality) prefer weekly or biweekly schedules.
- Payments must go directly to the employee’s UK bank account
- You must include a breakdown of gross pay, deductions, and net pay
- All tax and National Insurance contributions must be paid to HMRC by the 22nd of each month (if paying electronically)
Also, be aware of pay during probationary periods and make sure your payroll reflects any agreed terms. UK law doesn’t allow you to withhold pay just because a new employee is in their trial period.
Employee Benefits in the UK
Now let’s talk perks. Employee benefits in the UK fall into two buckets: statutory (required by law) and optional (nice to have if you want to attract top talent).
If you’re planning to hire employees in the UK, you’ll need to budget for both.
Statutory Benefits (Required by Law)
All eligible employees in the UK are entitled to a baseline of protections under UK labor law, including:
- Paid annual leave: 28 days minimum (for full-time workers), including public holidays
- Statutory sick pay (SSP): Paid by the employer for up to 28 weeks
- Maternity & paternity leave: Eligible workers in the UK can take extended time off, with varying pay depending on length of service
- Pension contributions: Employers are required to automatically enroll eligible employees into a workplace pension, contributing a minimum of 3% of their salary
- Parental leave, adoption leave, and leave for dependents: UK employees have the right to time off under specific circumstances
Optional Benefits That Help You Stand Out
If you’re looking to hire in a competitive market (and let’s face it, who isn’t?), optional benefits can be a game-changer.
Popular add-ons include:
- Private healthcare
- Additional holiday days or sabbatical schemes
- Flexible working hours or 4-day workweeks
- Bonuses and stock options
- Mental health support and wellness stipends
- Learning and development budgets
These perks can make a big difference in whether a top-tier employee in the UK chooses your offer, or your competitor’s.
And remember, these benefits don’t just help with recruitment, they also boost retention. Fewer exits = lower cost to hire over time.
UK Visa & Employer of Record Options
If you’re looking to hire talent from outside the United Kingdom, the process involves a few more steps, and a lot more acronyms. Let’s talk about the two most common paths: navigating the UK visa system yourself or working with an Employer of Record (EOR).
The UK Visa Route
To hire an employee in the UK who isn’t a British citizen or already settled in the UK, you’ll likely need to sponsor a work visa.
Here’s what that involves:
- Becoming a licensed sponsor under the UK’s Skilled Worker visa scheme
- Proving that the job and candidate meet the visa eligibility requirements
- Paying the Immigration Skills Charge (yep, more costs)
- Ensuring ongoing compliance with UK immigration and labor law
This route gives you direct control, but it also means handling complex government processes and remaining audit-ready at all times. For early-stage companies, it can be overwhelming, especially if you’re managing global hiring across multiple countries.
The EOR Option: Simpler, Faster, Safer
Enter the Employer of Record (EOR), your shortcut to hiring in the UK without opening a local entity or wrangling visa paperwork on your own.
An EOR in the UK becomes the legal employer on paper while you maintain day-to-day management of the employee. They handle:
- Work visa sponsorship and compliance
- Contracts enforceable under UK labor law
- Payroll, taxes, and employee benefits in the UK
- Local employment regulations (so you don’t have to Google “statutory sick leave at midnight”)
This is an ideal solution for foreign companies hiring in the UK who want to test the market, scale quickly, or avoid the risks and red tape that come with DIY hiring.
What to Consider Before You Start Hiring in the UK
Before you start hiring in the UK, it’s worth pausing to look at the big picture. Every country has its quirks, and the United Kingdom is no exception.
Here are a few key things to consider when hiring:
- Do you need a local entity? Setting one up gives you control, but increases the cost to hire and compliance load.
- How fast do you need to hire? An EOR can often onboard someone in days, while the visa route or local setup may take months.
- Are you hiring one person or building a team? The size and scope of your hiring plan may influence whether you go direct or partner with a hiring solution.
- What roles are you hiring for? If they’re on the UK’s shortage occupation list, that may simplify the visa process.
- What are your compliance obligations? From UK tax to leave in the UK, probationary periods, and pension schemes, employers in the UK are expected to stay on top of their game.
Ultimately, whether you’re hiring one employee in the UK or building out an entire regional team, doing it right from the start saves time, money, and headaches later.
Ready to Hire Employees in the UK?
The United Kingdom is home to top-tier talent, robust infrastructure, and business-friendly policies, but navigating the hiring process alone can be complex.
At Empleyo, we help companies like yours hire employees in the UK without the legal and logistical headaches. Whether you need support with visas, local compliance, or a full Employer of Record solution, we’ve got your back.
Let’s make your UK expansion smooth, smart, and scalable. Get in touch with Empleyo today.
