Employer of record in the UK: costs and rules for 2026

How UK employment differs from a US hire

There is no state-by-state patchwork for employer costs: employer NICs and the pension minimum are the same across the UK, while bank holidays differ by nation. Notice and redundancy pay are set as statutory minimums that a contract can only improve.

• Employer NICs have no ceiling. The worker's 8% stops at GBP 50,270 and drops to 2%, but the employer's 15% keeps going on every pound above GBP 5,000. Under-21s, apprentices under 25 and veterans cost 0% up to GBP 50,270.
• Pension auto-enrollment is compulsory. The employer puts in at least 3% of qualifying earnings (GBP 6,240 to 50,270) and the worker 5%, for an 8% minimum.
• Paid time off is 28 days (5.6 weeks) for a five-day week. The employer may count the 8 bank holidays in England and Wales (10 in Scotland and Northern Ireland) inside that 28.
• Pay floors went up in April 2026: the National Living Wage is GBP 12.71 an hour from age 21, GBP 10.85 for 18 to 20, and GBP 8.00 for under-18s and apprentices. Statutory Sick Pay is GBP 123.25 a week, or 80% of average weekly earnings if lower.
• Notice scales with tenure: 1 week from one month to two years, then 1 week per full year, capped at 12 weeks after 12 years. A contract can give more, never less.

We have not yet confirmed probation rules, pay frequency or the 48-hour working week cap from GOV.UK, and the Employment Rights Act 2025 changes to unfair dismissal were not checked. Ask the EOR how its UK contract handles each.

Employment costs and rules in United Kingdom

What an EOR charges to employ someone in United Kingdom

A GBP 30,000 UK hire, line by line

Figures are in pounds except the provider fee, which the providers in our fee table list in US dollars. Of the GBP 4,462.80 extra, GBP 3,750 is National Insurance.

Two things change the math. At GBP 50,270 and above the pension minimum stops at GBP 1,320.90 (3% x 44,030), while NICs keep climbing at 15%. And the GBP 10,500 Employment Allowance, which eligible employers take off their NIC bill, is left out here because it belongs to the employing company, and an EOR's per-employee price does not say whether any of it reaches you.

Compare the UK against other markets in the country cost index, or model a different salary with the employee cost calculator.

What ending a UK job costs

Redundancy pay is statutory after two years: half a week's pay per year of service under age 22, one week from 22 to 40, and one and a half weeks from 41. Weekly pay is capped at GBP 751 and only 20 years count, so the most anyone can get is GBP 22,530 (for redundancies on or after April 6, 2026).

On the sample salary, a 30-year-old made redundant after 5 years gets 5 weeks of notice and 5 weeks of redundancy pay: GBP 30,000 / 52 = GBP 576.92 a week, so GBP 2,884.62 in redundancy pay. Expect the EOR to bill this to you (Remote's terms, for example, pass severance through). Multiplier also sets its deposit partly from notice periods, so a long-serving UK employee can raise what you prefund.

A UK subsidiary versus an EOR

Your own UK company pays exactly the same NICs and pension. The saving is the EOR fee, $7,188 a year per person at $599 a month, against the work of running a PAYE scheme, a pension scheme and UK company filings yourself. The entity versus EOR comparison shows where the line sits by headcount, and the permanent establishment guide explains why an EOR does not by itself settle corporate tax exposure.

UK contractors and employment status

HMRC looks at how the work is done, not what the contract calls it. If a UK contractor works fixed hours for one client under your direction and is later treated as an employee, the employer NICs alone would have been GBP 3,750 a year at GBP 30,000. For real freelancers, contractor payment platforms are cheaper than an EOR; a contractor of record takes on the status checks for a fee.

Which provider to use in the UK

Following our scoring method, the two highest-scored EORs are Multiplier (79/100) and Oyster (64/100); see the full ranking in best employer of record services.

• Multiplier: $459 a month on annual billing or $499 monthly; says it adds no FX markup; charges a 15% penalty if you talk to the employee about termination yourself instead of going through them.
• Oyster: $699, no setup or termination fee, deposit of at least one month of total service cost under its terms (its pricing page, in the fee table, gives no amount). Trustpilot reviewers report held and late wages (see our Oyster review).
• Deel and Remote both list $599, but Remote's support article says $699 and its default terms run 12 months and auto-renew (Remote review, Deel review).

For a UK hire, ask whether the provider bills you in GBP or USD, who chooses the pension scheme, and whether its contract adds anything above the statutory notice scale.