Employer of Record (EOR) in the United Kingdom

An Employer of Record (EOR) plays a vital role in managing employment responsibilities in the United Kingdom (UK), including England, Scotland, Wales, and Northern Ireland. Often referred to as a Global Professional Employer Organization (Global PEO), the EOR ensures legal compliance and facilitates various aspects of employment. This includes guaranteeing that employees adhere to local labor laws and regulations, overseeing critical tasks such as payroll processing, tax compliance, benefits mandated by law, and the creation of employment contracts.

The Employer of Record (EOR) in the UK takes on several crucial responsibilities, including:
  • Ensuring strict adherence to the country’s employment laws.
  • Managing the intricacies of local payroll procedures.
  • Handling the filing of employment-related taxes and essential documentation.
  • Providing employees with accurate and timely payslips.
  • Disbursing employee salary payments promptly.

Simplify your global expansion endeavors with our Global PEO services, offering a hassle-free solution without the need for establishing a legal entity. Mercans serves as your trusted Employer of Record (EOR) in the United Kingdom, guaranteeing legal compliance, intellectual property protection, and allowing your business to concentrate on its core operations. Our services facilitate seamless global mobility and work visas while enabling the recruitment of a diverse and efficient global workforce.

EOR Solutions in the United Kingdom (UK)

  • EOR for Prospective Employees: Mercans offers seamless Employer of Record (EOR) solutions for businesses that have already identified their ideal candidates in the United Kingdom (UK). Our services encompass every aspect of the employee lifecycle, ensuring compliance with the United Kingdom (UK) labor laws and regulations.
  • EOR + Recruitment: For those seeking assistance in talent acquisition, our EOR and recruitment services provide a holistic solution. We tap into our extensive network and expertise to help you find, onboard, and retain top talent, streamlining your expansion into the United Kingdom (UK) market.
  • Visa Sponsorship and Global Mobility: Navigating the intricacies of expatriate employment is simplified through our visa sponsorship and global mobility services. We facilitate the relocation of your international workforce, ensuring compliance with the United Kingdom (UK) immigration and employment laws.
  • AOR for Contractor Payments: Businesses grappling with contractor payments can leverage our Assistance on Record (AOR) services. We handle the complexities of contractor payments, guaranteeing accuracy and compliance.
  • Converting Freelancers to Employees: Mercans supports the transition from independent contractors to permanent employees in the United Kingdom (UK). Our expertise ensures smooth conversions while adhering to legal requirements.
  • HCM Integration: Integrate Mercans’ EOR services seamlessly with your HCM system in the United Kingdom (UK) for real-time data exchange, enhanced compliance, and cost-efficiency. Trust our expertise for a unified, compliant, and efficient approach, elevating your workforce management and payroll operations.

Employment in UK

The United Kingdom has been a driving force in Europe’s thriving startup ecosystem, which has witnessed substantial growth over the past turbulent 18 months. Supported by state-backed initiatives and robust funding, the UK’s startup sector has been on the rise, with the Future Fund playing a pivotal role in supporting equity deals. Europe, as a whole, is showcasing impressive results, with ecosystems contributing over $4 billion in value, challenging North America’s dominance. Brexit has introduced potential friction, raising questions about its impact on the startup landscape. Still, London, Berlin, and Amsterdam continue to shine in the Top 5 for their international relationships and innovation exchange. Climatetech presents a significant investment opportunity, driven by initiatives like the EU Commission’s partnership with Bill Gates and the UK government’s funding for Greentech. However, attracting diverse technical talent and streamlining visa processes remain essential for Europe’s success on the global stage.

Employees vs Independent Contractors in UK

In the UK, individuals participating in the job market are classified into three distinct categories: employees, workers, and independent contractors. While there exist statutory definitions for employees and workers, these definitions are not all-encompassing, and the current delineation has largely evolved through legal precedents. Individuals who do not fall within the employee or worker categories are considered self-employed for employment law purposes.

This differentiation in employment law holds substantial significance due to several factors:

AspectEmployee (Worker)Independent Contractor (Self-Employed)
Legal DefinitionStatutory definitions for employees and workersNo statutory definition for independent contractors
Implied Contractual ObligationsYes (e.g., mutual trust and confidence)Limited to explicit contract terms
Written ParticularsEntitled to written particulars of employmentNot entitled to written particulars
Termination RightsYes (right to notice, no unfair dismissal)No (some self-employment rights apply)
Employment ProtectionsVarious legal protectionsLimited legal protections
Working Time and Minimum WageCovered by working time and minimum wage lawsNot covered by these laws
Acas Code of PracticeAppliesDoes not apply
TUPE (Transfer of Undertakings)Automatically transferred under certain conditionsGenerally not transferred to new entity
Vicarious LiabilityEmployer is liable for actions in the course of employmentGenerally not liable for actions
Health and Safety DutiesEmployer has statutory health and safety dutiesResponsibility rests with independent contractor
GDPR Data Handling ImplicationsSpecific implications for employees under GDPRSpecific implications for contractors under GDPR

Hiring and Recruitment in UK

StepsHiring an EmployeeHiring an Independent Contractor
Business PreparednessEnsure your business is ready to employ staff.Ensure your business is prepared for contractor engagements.
RecruitmentStart the recruitment process to find the right candidate.Select and recruit an independent contractor suitable for the project.
Right to Work CheckCheck the right to work in the UK for the selected candidate.Verify the right to work in the UK as part of the contract review.
DBS CheckDetermine if a DBS check is needed based on the nature of the role.Assess if a DBS check is necessary for specific roles or projects.
Workplace PensionCheck if the employee is eligible for a workplace pension and comply with auto-enrollment.Contractors typically manage their own pensions, not required by the employer.
Employment ContractAgree on terms of employment, including salary, working hours, and benefits.Create a detailed contract outlining the project scope, payment terms, and deliverables.
Inform HMRCNotify HM Revenue and Customs (HMRC) about the new employee for tax and NI purposes.Ensure compliance with tax laws when making payments to the contractor.

Top #5 Cities to hire remote talent in UK

When it comes to hiring remote talent in the UK, here are the top 5 cities to consider:

  • Belfast: Northern Ireland’s capital takes the top spot with excellent internet download speeds, averaging 64.1mbps, ensuring smooth remote work experiences.
  • Birmingham: Known as the UK’s “second city,” Birmingham secures the second position with robust internet download speeds (24.1mbps) and reliable 4G coverage.
  • Nottingham: Nottingham ranks third, offering a relatively low average living cost (£890) and an average internet download speed of 62mbps.
  • Manchester: Manchester claims the fourth spot, primarily due to its strong 4G signal strength (23.4mbps).
  • Leicester: In fifth place, Leicester combines a low cost of living with an average internet download speed of 53.1mbps.

These cities provide favorable conditions for remote work, including reliable internet connectivity and affordability, making them attractive choices for businesses looking to hire remote talent in the UK.

Top #5 Skills on Demand

The UK government maintains a shortage occupation list, which encompasses a variety of skilled positions, including computer engineers, nurses, geoscientists, and architects. If you’re uncertain about which educational path to pursue for a successful career, consult our list of the most sought-after jobs in the UK to align your degree and course choices accordingly.

Software Developers and Programmers

The UK, along with many nations worldwide, grapples with a scarcity of digital expertise. Consequently, individuals with IT and software proficiencies are in high demand, with starting salaries hovering around £26,000. If you seek a future-proofed tech career, pursuing a degree in computer engineering or software engineering is a sound strategy.

Cybersecurity Experts

In line with digital skills, cybersecurity is another prominent occupation in the UK, featuring numerous job openings and attractive salaries. Cybersecurity plays a pivotal role in safeguarding sensitive public data for both private companies and government organizations, with salaries commencing at around £25,000.

Health Services and Residential Care

The healthcare sector experiences significant demand, particularly for managerial roles and full-time nursing positions. If you aspire to make a positive impact on people’s lives through care and attention, consider a nursing career, possibly complemented by an MBA specializing in healthcare.


Architectural roles also rank among the UK’s most sought-after professions. This occupation requires a blend of skills, including mathematics, engineering, creativity, communication, and teamwork. While the training duration can span a minimum of seven years, the long-term prospects are promising.

Graphic Designers

In our rapidly evolving communication landscape, visual content plays a pivotal role. Whether designing logos, digital banners, websites, packaging, or traditional print materials, the skills of design-savvy professionals are highly coveted. Although the starting salaries may be slightly lower than some other roles on this list (around £18,800), they can rapidly increase with experience and outstanding work.

Physical Scientists

The oil, gas, and mining sectors are crucial for sustainability and reducing environmental impact. However, these industries face a shortage of skilled scientists capable of spearheading sustainable development. This demand positions physical science roles among the most sought-after jobs in the UK, providing excellent opportunities for STEM students.

Sales Assistants

Sales assistants serve as the primary point of contact for customers, helping them find products, answering inquiries, and providing product information. Qualifications matter less than skills and experience in this role. The ability to stay composed under pressure, think on your feet, possess computer literacy, and exhibit effective communication skills are valuable traits for success as a sales assistant.

Operations Managers

Operations managers hold a broad scope of responsibilities with competitive salaries, although their specific duties vary by industry and employer. Generally, they are responsible for ensuring an organization’s smooth operations. A business-related degree is often favored for this role, and MBA graduates may explore opportunities through graduate trainee schemes.

Business Analysts

Business analysts play a pivotal role in helping organizations plan for future growth. This entails assessing the company’s current status, anticipating future requirements, and devising solutions for success and expansion. While this often involves working with IT and software solutions, it may also encompass aspects like staffing and budgets.

Employee Onboarding in UK

Employee onboarding in the United Kingdom typically involves several key steps to ensure a smooth transition for new hires. Firstly, it’s essential to complete all the necessary paperwork, including employment contracts and tax forms, in compliance with UK employment regulations. Next, HR teams need to introduce new employees to the company culture, policies, and procedures, which often includes anti-discrimination training, health and safety briefings, and an overview of employee benefits. Providing proper training and access to necessary tools and resources is crucial. Finally, ongoing support and clear communication are vital for successful onboarding, helping employees integrate into the workplace effectively and contribute to the organization’s success.

Background Verification in UK

Employers in the UK must conduct several essential checks on job applicants to ensure legal compliance. Firstly, it’s crucial to verify the right to work in the UK, with potential fines for not doing so. For EU citizens and their non-EU family members, settled status applications are necessary post-2020. Criminal record checks can be requested, particularly for certain roles in healthcare or childcare. Health checks are permissible only if legally required or the job demands it. These checks should be clearly communicated in offer letters, and written consent is needed for health reports from candidates’ doctors. Furthermore, employers should ensure that their checks do not discriminate, and they must adhere to data protection regulations when handling applicant information. Violations can result in prosecution.

Payroll in UK

In the United Kingdom, Payroll Cycle, Tax Codes, and Minimum Wages are integral aspects of the General Employee Pay Regulations.

Payroll Cycle/ Payroll Period

The frequency of payroll cycles in the UK is typically determined by the company, with bi-weekly and monthly schedules being the most common. However, regardless of the chosen frequency, it is mandatory to specify it in the written statement of employment particulars. Payroll periods typically conclude with payday, which is typically set at the end of the month, often falling between the 25th and 30th or the last working day of the month.

Tax Codes

Tax codes are essential for the calculation of income tax in the UK. These codes are provided by HM Revenue and Customs (HMRC) and are based on various factors, including the individual’s earnings and any applicable tax reliefs. The tax code determines how much income tax should be deducted from an employee’s pay, ensuring that tax contributions are accurate and in compliance with UK tax regulations.

Minimum Wages

The UK enforces minimum wage regulations, and changes to these rates typically take effect on April 1st each year. As of the most recent update, employees aged 23 or older are entitled to a minimum wage of £10.42 per hour, while those aged 21 to 22 should receive at least £10.18 per hour. These minimum wage rates are designed to ensure fair compensation for workers and are subject to annual reviews and adjustments.
These components collectively form the framework for payroll management and employee compensation in the United Kingdom, ensuring that employers comply with regulations and employees receive their rightful earnings.

Employment Cost in UK

As an example, let’s break down the financial components for an employee with an annual salary of 10,000 GBP in the UK:

Gross Annual Salary (GBP 9,999.96)

The gross annual salary represents the total amount the employee earns before any deductions. In this case, the employee’s gross annual salary is 9,999.96 GBP. It’s slightly less than the original salary amount due to various deductions and taxes.

Total Annual Employer Costs (GBP 474.72)

These are the costs that the employer incurs beyond the employee’s salary. They include expenses such as taxes, benefits, and other contributions made by the employer on behalf of the employee. In this case, the total annual employer costs amount to 474.72 GBP.

Total Annual Cost (GBP 10,474.72)

This figure represents the overall financial impact of employing this individual. It includes both the gross annual salary (what the employee receives) and the total annual employer costs (what the employer pays on behalf of the employee). The total annual cost is 10,474.72 GBP.
So, when you add the employee’s gross salary (9,999.96 GBP) to the total annual employer costs (474.72 GBP), you get the total annual cost (10,474.72 GBP), which represents the complete financial commitment associated with employing this individual in the UK.

Social Security Contributions in the United Kingdom

In the United Kingdom, social security payments are referred to as ‘national insurance contributions’ (NICs). NICs are payable by employees, employers, and the self-employed. Explore further →

Statutory Payments in the United Kingdom

Statutory Payments in the United Kingdom are essential provisions that ensure employees are financially supported during various life events and circumstances. These statutory payments are designed to provide financial assistance when employees are unable to work due to sickness, are expecting a child, or are adopting a child. Here are the key statutory payments in the UK:

  • Statutory Sick Pay (SSP): Statutory Sick Pay is a crucial benefit for employees who are unable to work due to illness. It provides financial support when employees are too unwell to carry out their duties. Eligible employees can receive SSP for up to 28 weeks, and it is paid by their employers.
  • Statutory Maternity Pay (SMP): Statutory Maternity Pay is intended to support expectant mothers during and after childbirth. Eligible employees can receive SMP for up to 39 weeks. During this period, new mothers can take time off work to recover and bond with their child while still receiving financial support from their employer.
  • Statutory Adoption Pay (SAP): Statutory Adoption Pay is designed to help employees who are adopting a child. Like SMP, it provides financial assistance for up to 39 weeks, allowing adoptive parents to take time off work to care for and bond with their newly adopted child.
  • Shared Parental Pay (ShPP): Shared Parental Pay is a flexible provision that allows eligible parents to share the care responsibilities of a child. Parents can choose how to divide the leave and pay between them, enabling a more balanced approach to parenting.

These statutory payments are a valuable part of the UK’s social security system, ensuring that employees are supported during significant life events. They not only provide financial assistance but also promote employee well-being and work-life balance.

National Insurance in UK

National Insurance is a fundamental component of the UK’s social security system, requiring both individuals and employers to make compulsory contributions. Explore further →

Employment Laws in UK

Employment law encompasses a body of legislation that governs the relationships between employers, employees, and trade unions in the United Kingdom. Explore further →

Employee Benefits in UK

Employers must offer a pension scheme to all employees within three months of starting work. Employees have the option to join or decline. Explore further →

Employee Rights in the United Kingdom

Every employee in the UK is entitled to a comprehensive written employment contract before commencing work. Explore further →

Employee Termination

When an employer decides to terminate an employee’s contract in the United Kingdom, it is imperative that the dismissal is valid and justified. Explore further →

Leave Policy in the UK

The vast majority of individuals classified as workers are legally granted a yearly paid holiday entitlement of 5.6 weeks, often referred to as statutory leave or annual leave. Explore further →

Personal Income Tax in United Kingdom

Personal Income Tax in the United Kingdom (UK) is an essential part of the country’s revenue system, ensuring the funding of public services and government operations. Explore further →

Immigration UK

Work in the UK for Your Overseas Employer

If you are employed by a company overseas but need to work in the UK, you might require a suitable visa to do so. Depending on your specific situation, various visa options are available. Some of the most common ones include the “Skilled Worker Visa UK” or the “Work Permit UK,” both of which cater to individuals with job offers in the UK.

Senior or Specialist Worker Visa (Global Business Mobility)

The Senior or Specialist Worker Visa is designed for employees at a senior level or with specialized skills within a global business. This visa facilitates their transfer to the UK branch of the company, making it easier for multinational organizations to deploy their top talents.

Overseas Domestic Worker Visa

For domestic workers accompanying their overseas employers to the UK, the Overseas Domestic Worker Visa is crucial. This visa allows individuals such as nannies, housekeepers, and carers to work within a private household setting.

Graduate Trainee Visa (Global Business Mobility)

The Graduate Trainee Visa is intended for recent graduates from overseas looking to undertake a structured training program in the UK. This program must be within the same industry as their academic field.

Secondment Worker Visa (Global Business Mobility)

The Secondment Worker Visa is applicable when an overseas employer temporarily assigns an employee to the UK. This type of visa is particularly relevant for individuals who are part of international companies with offices in the UK.

Service Supplier Visa (Global Business Mobility)

Service Supplier Visas are suitable for employees providing services to UK-based clients as part of an overseas company. This visa is instrumental for global businesses expanding their services to the UK market.

UK Expansion Worker Visa (Global Business Mobility)

The UK Expansion Worker Visa is tailored for employees of overseas companies looking to establish a branch or subsidiary in the UK. This visa assists in the growth and expansion of international businesses within the United Kingdom.

Representative of an Overseas Business Visa

If you are a senior employee or representative of an overseas company planning to set up a branch or subsidiary in the UK, the Representative of an Overseas Business Visa is the appropriate choice. It enables you to manage the UK business operations effectively.

Apply for a Service Providers from Switzerland Visa

Service providers from Switzerland can apply for a specific visa to deliver services in the UK. This visa is vital for Swiss businesses or individuals offering services within the UK, fostering trade relations between the two countries.


In summary, Mercans (as your trusted Employer of Record in the United Kingdom) stands ready to provide you with bespoke solutions to meet your employment and immigration requirements in the United Kingdom. Our seasoned experts are committed to guiding you through the intricacies of the process, ensuring a smooth and effective transition to working in the UK. If you seek a seamless and successful employment journey, do not hesitate to contact us today. Your success is our foremost concern, and we are here to assist you every step of the way.

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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