Mercans CountryIntel ® United Kingdom Payroll And HR Insights
Mercans offers complete payroll, PEO and HR services in the UK
Employers normally operate PAYE (pay as you earn) as part of payroll. Payroll and deductions need to be made to HM Revenue and Customs’ (HMRC) system which collects income tax and national insurance from employment.
Doing Business in the UK
Traditionally, the UK has been very welcoming of foreign investors and businesses which makes it an attractive place for overseas businesses and entrepreneurs to conduct their operations.
Entity Registration and Incorporation Requirements
Setting up a new business or expanding an existing one in the UK is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.
Banks are open from Monday to Friday 9am to 4pm.
The standard working week is 40 hours per week usually worked from Monday to Friday
In the UK, individuals can be classified as employees, workers or independent contractors. Each classification carries different rights and protections. All employees and workers are entitled to a statement that outlines their conditions of employment. If an employee is dissatisfied about an issue, a claim can be brought before the Employment Tribunal.
Services, manufacturing, construction and tourism
Dates & Numbers
Official State Name
United Kingdom of Great Britain and Northern Ireland
English, Welsh, Gaelic
International Dialing Code
Payroll refers to the compensation a business pays its employees for a set period and on a given date. Payroll management must take into account all relevant benefits and deductions, keeping in mind the minimum wage applicable. It is worth noting that, in the UK, there is no legal right to pay for working extra hours.
It is acceptable to provide employees with online payslips
Payroll reports must be kept for seven years
28 days paid sick leave
28 weeks sick leave
52 weeks of paid maternity leave and 26 weeks of paid paternity leave
Maternity & Paternity Leave
No statutory provisions for the 13th salary
£8.91 per hour for employees aged 23 and above
Employers are not forced to pay workers for doing overtime.
Half a week's pay for each full year under 22. one week's pay for each full year for 22 or older, but under 41.
Tax and Social Security
In the UK, most individuals get a Personal Allowance of tax-free income, that is, the amount of income an individual can have before tax is paid. An individual can claim the basic State Pension when they reach the State pension age.
In the UK, tax is paid by individuals on income received which includes wages, benefits, pension and any savings interest. Income tax is to be paid on income above an individual’s Personal Allowance. If employed, the employer will deduct income tax from wages paid.
Corporate Income Tax
Income Tax Rate
The Department for Work and Pensions (DWP) administers the State pension and a range of working age, disability and ill health benefits.
Social Security Rate
Social Security Rate for Employers
Social Security Rate for Employees
UK employment laws seek to ensure that both employers and employees are protected through legislation on dismissal, holidays, pay, discrimination and more.
All employees have an employment contract with their employer. This sets out the conditions of employment, the duties of the employee as well as the rights and responsibilities of both parties. It is important to note that once a job offer is accepted, there is a contract with the employer. An employment contract does not have to be written down.
All employees have a legal right to request flexible working and must have worked for the same employer for at least 26 weeks to be eligible for this. By law, workers cannot work more than 48 hours a week on average. This is sometimes called the ‘working time directive’. Exceptions include where 24 hour staffing is required, in security or surveillance, domestic servant in a private household.
Almost all workers are legally entitled to 28 days paid holiday a year (known as statutory leave entitlement or annual leave). This includes agency workers, workers with irregular hours and those on zero-hour contracts. Statutory paid holiday entitlement is limited to 28 days.
An employee dissatisfied over pay, dismissal or discrimination may take an employer to an employment tribunal. The employer may be required to pay compensation or reinstate the employee if they lose the case.
Minimum notice period for terminating employment
Total number of public holidays
Working hours per week
Total number of days for Compassionate and Bereavement Leave
UK Visas and Immigration makes decisions on who has the right to visit or stay in the country, with firm emphasis on national security.
An individual’s UK resident status determines whether they pay tax in the UK on foreign income earned. Residents normally pay UK tax on all their income, whether from the UK or abroad.
Work Permit validity
UK visa application form
A valid passport
Proof of financial means (such as bank statements and payslips)
Proof of accommodation
Detailed travel itinerary
Tuberculosis test results
UK visa invitation letter (If applicable)
Receipt indicating UK visa fees are paid
Certified translations of any document that is not in either English or Welsh
Build the best team and hire top talent compliantly in United Kingdom. Get in touch with United Kingdom payroll outsourcing & PEO specialists for a free consultation!