Guide to employment, payroll and benefits in

United Kingdom of Great Britain and Northern Ireland

Rivermate offers complete payroll, benefits and compliance services for

United Kingdom of Great Britain and Northern Ireland

01. Overview

Last updated: 

August 19, 2021

Currency
British Pound
Capital
London
Ease of doing business
Language
English
Population
67886011
GDP growth

02. Grow your team in

United Kingdom of Great Britain and Northern Ireland

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

United Kingdom of Great Britain and Northern Ireland

, particularly if you don't have established local relationships. You can hire employees in

United Kingdom of Great Britain and Northern Ireland

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

The United Kingdom of Great Britain and Northern Ireland, also known as the United Kingdom or Britain, is a sovereign nation located off the northwestern coast of the European mainland in northwestern Europe. The United Kingdom consists of the island of Great Britain, the north-eastern half of the island of Ireland, and a slew of smaller islands scattered across the British Isles. Northern Ireland and the Republic of Ireland share a land boundary. The Atlantic Ocean surrounds the United Kingdom, which has the world's 12th-longest coastline, with the North Sea to the east, the English Channel to the south, and the Celtic Sea to the south-west. Great Britain and Ireland are separated by the Irish Sea. The United Kingdom has a total area of 94,000 square miles. The United Kingdom is a constitutional monarchy with a unitary parliamentary democracy. Queen Elizabeth II, who has ruled since 1952, is the current ruler. London, the capital of the United Kingdom, is a global city and financial center with a population of 10.3 million people. England, Scotland, Wales, and Northern Ireland are the four nations that make up the United Kingdom. Their respective capitals are London, Edinburgh, Cardiff, and Belfast. The constituent countries, with the exception of England, have their own devolved governments, each with differing powers. The United Kingdom of Great Britain and Ireland was formed by the unification of the Kingdoms of England and Scotland in 1707, followed by their union with the Kingdom of Ireland in 1801. In 1922, five-sixths of Ireland seceded from the United Kingdom, resulting in the current United Kingdom of Great Britain and Northern Ireland. The name of the United Kingdom was changed in 1927 to reflect the transition. The Isle of Man, the Bailiwick of Guernsey, and the Bailiwick of Jersey became Crown Dependencies, with the British Government responsible for defense and foreign representation. There are now 14 British Overseas Territories, the last remnants of the British Empire, which spanned nearly a quarter of the globe at its peak in the 1920s and was the world's largest empire. Many of Britain's former colonies have retained British dominance in their language, culture, and political structures. The United Kingdom has the world's fifth-largest economy by nominal GDP and the tenth-largest by purchasing power parity. It has a high-income economy and ranks 13th in the world in terms of human development index. During the 19th and early 20th centuries, the United Kingdom became the world's first industrialised nation and the world's leading power. The United Kingdom is still one of the world's great powers, with significant economic, cultural, military, science, technical, and political clout. It is a nuclear-weapons state with the sixth highest military spending in the world.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

Employers are generally required to offer notice to employees prior to terminating employment. The notice period is between one and twelve weeks, depending on the duration of employment of the employee. Employers frequently include extended notice periods in contracts. Employers may also give compensation in lieu of notice and quickly terminate an employee if the employment contract provides for it or if the employer and employee agree on this arrangement.


When employees are laid off as a result of redundancy, special processes apply. Employers must make every effort to avoid redundancy whenever possible by reassigning superfluous staff, reducing or eliminating overtime, discontinuing the use of contractors and freelancers, or implementing temporary or short-term layoffs rather than permanent ones.


If no alternative to layoffs exists, or if the company still needs to lay off employees after all other options have been exhausted, the employer must pursue the legal process for redundancy terminations. Employees who are eligible for statutory redundancy get a payment based on their age and duration of service.


In certain cases, employers are compelled to provide severance.

Notice period

In the United Kingdom, there are two types of notice. The first is statutory notice, which is required by law, and the second is the notice period specified in the employee's employment contract. The statutory notice period is calculated based on the length of service. The notice period is one week for each month of service between one and two years. The notice period is one week for each year of service between two and twelve years. The length of notice specified in the employment contract is up to the employer, but it is typically one month for employees and up to three months for senior employees.

Severance pay

When an employee is laid off due to redundancy and has worked for the employer continuously for at least two years prior to the layoff, severance pay is paid according to the following schedule: half a week's pay for each year of service if the employee was under the age of 22; one week's pay for each year of service if the employee was between the ages of 22 and 40; 1.5 weeks' pay for each year of employment if the employee was 41 years or older. A weekly wage cap is in place for redundancy pay purposes, and it is adjusted annually.

Probation period

The duration and terms of any probation period are determined by the terms of an individual's employment contract, but they are typically three or six months long and may include formal or informal assessments.

07. Working hours

General

Employers are free to set daily work hours based on business needs. By law, an employee may work no more than 48 hours per week on average over a 17-week period. Employees may, and frequently do, opt out of this.

Overtime

Overtime work must be specified and agreed upon in the employment contract. Employers are not required to pay overtime unless specifically stated in the contract.

08. Minimum wage

General

The minimum wage in the United Kingdom of Great Britain and Northern Ireland is set at 1,598.69 EUR per month.

09. Employee benefits

General

In the United Kingdom, the main statutory benefit is given via the employers' share of National Insurance Contribution, NIC, which is the national social security program through which all employers and workers pay to the public health care system. The employer's share of the national insurance payment is typically 13.8 percent of total pay. Employees must also pay national insurance payments, which are deducted by the employer via the PAYE system.

In addition to the NIC, many employers provide other benefits such as medical, vision, dental, and life insurance to their workers. Although there is no legal obligation, market factors suggest that workers may expect their company to offer extra perks. Approximately 75% of UK businesses offer supplemental insurance coverage.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

United Kingdom of Great Britain and Northern Ireland

to hire a team takes time, money, and effort. The labor law in

United Kingdom of Great Britain and Northern Ireland

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

United Kingdom of Great Britain and Northern Ireland

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

United Kingdom of Great Britain and Northern Ireland

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

United Kingdom of Great Britain and Northern Ireland

via our Employer of Record / PEO solution.

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