Hiring in the UK

In the UK, a £60,000 salary costs £69,570.90 a year before EOR fees in this 2026–27 example: £60,000 salary, £8,250 employer National Insurance and £1,320.90 minimum employer pension contributions. This assumes standard National Insurance treatment and an employee eligible for automatic enrolment.

The full hiring budget also includes the EOR management fee, any FX charge, benefits and other agreed extras. Age-related National Insurance relief and Employment Allowance can change the employer’s bill. A refundable deposit increases upfront funding, rather than the annual employment cost.

Yes. An EOR can employ someone in the UK, but it must meet the usual employment and payroll rules. Confirm who is responsible for PAYE income tax, National Insurance and the employment contract. An overseas client does not make the employee’s UK pay tax-free.

Usually not. If the employee will work under your day-to-day direction, the arrangement will not normally qualify. The UK visa sponsor must remain responsible for the employee’s duties and work.

Different rules can apply when a sponsor delivers a defined service or project. A sponsor licence alone does not make an EOR hire eligible.

£21,144 a year for three employees makes the EOR cheaper in this UK administration-cost model, compared with £55,364 for a UK company in year one. Both routes still require salary and equivalent employment costs; those are excluded from this comparison.

The company becomes cheaper at 11 employees in year one, or 10 in later years, under the stated assumptions. The model includes EOR management, FX and extras, versus company setup, HR support, accounting, half an internal role and incidentals. These are planning assumptions, not a universal headcount threshold.

The UK employer operates PAYE, deducts the employee’s Income Tax and National Insurance, and pays employer NICs. Your US location does not make UK work tax-free.

From 6 April 2026, additional PAYE liability can reach an agency or end client in a qualifying umbrella-company supply chain. Establish the actual contractual chain and who reports and pays HMRC; an EOR label does not settle that liability.

Yes, for the new work if the contractor genuinely becomes an employee paid through PAYE instead of supplying services through their own intermediary.

IR35 concerns the intermediary arrangement; it is not a separate tax on every employee. The conversion does not settle earlier PSC periods or historical status liabilities. Keep the old contract’s final invoice separate from the new employment salary and benefits.

If you still engage a personal service company, a wholly overseas client without a UK connection falls outside the client-led off-payroll rules; the intermediary retains its own assessment responsibility.

A UK connection changes that analysis. Genuine EOR employment runs through PAYE instead. Separately, the April 2026 umbrella-company rules can affect labour-supply chains, so an overseas address is not a universal exemption.

An EOR employee has ordinary employee protections: minimum wage, paid-holiday accrual, payslips, written employment particulars and protection against discrimination and unlawful wage deductions.

Probation does not suspend these rights. Eligibility and service requirements still apply to other entitlements, including some statutory payments and redundancy pay. The employment contract can improve the minimum but cannot remove it.

For qualifying sickness from 6 April 2026, statutory sick pay starts on the first full qualifying day, at the lower of £123.25 a week or 80% of average weekly earnings, for up to 28 weeks.

Most workers also receive 5.6 weeks’ paid holiday annually, pro-rated for their working pattern. Contractual benefits can be better; transitional sick-pay protections may affect an absence spanning the change.

A continuous payment timetable is possible, but it must be arranged rather than promised. Agree the contractor’s last invoicing period, the employment start date and the first payroll cutoff before ending the old engagement.

The employer needs the worker’s P45 or starter information to calculate PAYE. Moving into employment changes the pay and benefits calculation; it does not automatically preserve the contractor’s take-home amount.

The EOR must handle a lawful dismissal process as well as final pay. Statutory employer notice is normally one week after one month’s service, then one week per completed year from two years, capped at twelve weeks; a longer contract controls.

A qualifying redundancy normally attracts statutory redundancy pay after two years’ continuous employment. Provider cancellation alone does not terminate the employee or replace these obligations.