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How to Hire Employees in the UK: A 2026 Guide for Overseas Companies

Insights · By Chen ChunJie · Updated 8 October 2026

Hiring in the UK requires a compliant employment arrangement, right-to-work checks, employment terms and payroll administration. Overseas companies commonly use their own UK entity or an employer of record (EOR). This guide explains the main steps for Great Britain, including PAYE and pension assessment. Northern Ireland has a separate employment-law framework, so confirm the rules for the employee’s location before making an offer.

Last reviewed in October 2026 against GOV.UK, HMRC and Acas guidance for the 2026 to 2027 tax year.

Step 1: Decide who will employ the person

A UK employee has to be paid through PAYE, enrolled in a workplace pension and given the rights in UK employment law, wherever the company they work for is based. Overseas companies usually choose between five options:
Decision flowchart for choosing between hiring directly, an employer of record, setting up a company or a contractor in the UK
OptionWhen it fits
Your own UK companyYou plan a team or will sign contracts with UK customers.
Employer of recordYou need NNRoad to employ a local employee for your business in the UK.
Hire Foreigner serviceYou need NNRoad to employ a foreign employee; eligibility and the employment arrangement are assessed separately.
Payroll outsourcingYou already have a UK company but no payroll team.
ContractorYou need a contractor engagement, subject to assessment of the actual working arrangement and applicable status rules.
For a closer comparison of the models, read EOR vs PEO in the UK.

Step 2: Check the candidate's right to work

Every UK employer must check that a person is allowed to work in the UK before they start, whatever their nationality. An employer that skips the check can face a civil penalty. How the check is done depends on the person: GOV.UK
CandidateHow the check is done
British or Irish citizenCheck the original passport, or use an identity service provider. Keep a dated copy.
Settled status, or a visa that allows the workThe candidate gives you a share code and you check it on GOV.UK. If the permission has an end date, check again before it expires.
No permission to work yetThe person cannot start until a visa is granted.

NNRoad’s UK EOR service is for local employees, subject to right-to-work checks and role review. Foreign employee hiring is handled through our separate Hire Foreigner in the UK service.

Step 3: Set the salary and package

The legal floor is the National Living Wage: £12.71 an hour from age 21 and £10.85 for ages 18 to 20, from 1 April 2026. GOV.UK
For professional roles, market practice matters more than the legal minimum. Offers commonly include:
  • 25 days of holiday plus bank holidays, against a legal minimum of 28 days in total
  • An employer pension contribution above the 3% minimum
  • Private medical insurance or a health cash plan
  • Sick pay above the statutory rate for a set number of weeks
  • A bonus or commission for sales and senior roles
On top of salary, budget for employer National Insurance at 15% of pay above £5,000 a year and the employer’s pension contribution. Estimate the cost with our calculator, or see how UK income tax affects take-home pay.

Step 4: Give written terms on day one

Employees must receive a written statement of the main terms on or before their first day. In practice it is part of the employment contract. It must include at least:
  • The employer’s name, the employee’s name, job title and start date
  • Pay, and how often it is paid
  • Working hours and days, and whether they can vary
  • Holiday entitlement, and whether it includes bank holidays
  • Place of work
  • The length and conditions of any probation period
  • Other benefits, and any training the employee must complete
  • For a fixed-term role, the end date
The remaining terms, such as pension and disciplinary procedures, must follow within 2 months. Probation is not regulated by law; three to six months is common. GOV.UK: written statement of employment particulars

Step 5: Set up PAYE, National Insurance and pension

A new employer registers with HMRC before the first payday. On each payday, income tax and National Insurance are deducted and reported to HMRC, and the employee gets a payslip on or before that day. GOV.UK: register as an employer
ContributionEmployerEmployee
National Insurance15% of pay above £417 a month8% of pay between £1,048 and £4,189 a month, 2% above
Workplace pension (minimum)3% of qualifying earnings5% of qualifying earnings, including tax relief
Income tax (PAYE)None20%, 40% or 45%, deducted from pay

Rates for the tax year 6 April 2026 to 5 April 2027. Qualifying earnings for pensions are pay between £520 and £4,189 a month. Sources: GOV.UK rates and thresholds for employers, GOV.UK workplace pensions.

  • Report pay and deductions to HMRC on or before each payday, and pay what is due each month.
  • Enrol employees aged 22 to State Pension age who earn more than £10,000 a year in a workplace pension. GOV.UK
  • Take out employers’ liability insurance of at least £5 million as soon as you become an employer. GOV.UK
  • Give employees still employed on 5 April a P60 by 31 May, and issue a P45 when employment ends.
  • Keep payroll records for 3 years from the end of the tax year they relate to.

Step 6: Holiday, working hours, sick pay and family leave

TopicThe rule
Paid holiday5.6 weeks a year, which is 28 days for a five-day week. Bank holidays can be included. GOV.UK
Working hoursNo more than 48 hours a week on average over 17 weeks, unless the employee opts out in writing. GOV.UK
Sick payStatutory Sick Pay of £123.25 a week, or 80% of average weekly earnings if lower, from the first day of illness for up to 28 weeks. GOV.UK
Maternity leave and payUp to 52 weeks of leave. Statutory pay for 39 weeks: 90% of average weekly earnings for 6 weeks, then £194.32 a week or 90% if lower. GOV.UK
Paternity leaveUp to 2 weeks, a right from the first day of employment since 6 April 2026. GOV.UK
Flexible workingEmployees can make a request from their first day. GOV.UK
Bank holidays8 a year in England and Wales; Scotland and Northern Ireland have more. GOV.UK

Step 7: If the employee will work from home

A remote employee in the UK is still employed in the UK. PAYE, pension and employment rights apply in full, whether the person works from home, a co-working space or a client site.
  • Write the place of work and any home-working arrangement into the contract.
  • Employees can ask for flexible working from their first day. GOV.UK
  • Agree who provides equipment and how expenses are reimbursed.
  • Set clear rules on confidentiality, data access and ownership of work.

Step 8: Ending the employment

Either side can end the contract with the notice it sets out. The contract cannot give the employee less than the statutory minimum: GOV.UK
Length of serviceMinimum notice from the employer
Less than 1 monthNone set by law
1 month to less than 2 years1 week
2 to 12 years1 week for each full year
12 years or more12 weeks

Assess the lawful reason, procedure, notice and any redundancy obligations before dismissing an employee. The usual service requirement for an ordinary unfair dismissal claim is two years; many automatically unfair reasons and discrimination claims have no such qualifying period. For dismissals from 1 January 2027, the ordinary unfair dismissal qualifying period is due to fall to six months and the compensation cap is due to be removed. Obtain case-specific advice when planning a dismissal or transfer.

Hiring checklist for the UK

  • Employer decided: your own UK company or an EOR
  • Right to work checked before the first day, with a dated record
  • Salary, holiday, pension and benefits agreed
  • Written statement of terms issued on or before day one
  • Employer registration with HMRC and a payroll calendar
  • Workplace pension scheme and enrolment in place
  • Employers' liability insurance of at least £5 million
  • Equipment, system access and home-working rules agreed

Questions about hiring in the UK

Yes, through an employer of record. The EOR employs the person in the UK and handles the contract, PAYE, National Insurance and pension, while you manage the work. At NNRoad this route is for British and Irish citizens and people with settled status. A candidate who needs a visa is hired through a different route, such as our Hire Foreigner service.

Through NNRoad’s EOR, allow about one month from signing to the employee’s first day. The candidate’s notice period with their current employer often sets the pace. With your own company, add the time to register it, open a bank account and set up payroll and a pension scheme.

Employer National Insurance at 15% of pay above £5,000 a year, and a pension contribution of at least 3% of qualifying earnings. On a £60,000 salary the two come to £797.52 a month.

No. Bonuses are a matter for the contract. The statutory items are the minimum wage, paid holiday, sick pay and the workplace pension.

With NNRoad, a monthly service fee for each employee, quoted after we review the role, plus the employment cost at cost. See worked examples of the employment cost.

Hiring your first employee in the UK?

If you do not have a UK company yet, NNRoad can employ your hire for you. Send us the role and salary for a quote within 24 hours.
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