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Global Expansion Guide

United Kingdom

Manage and pay your employees easily with BIPO in the UK and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

British Pound Sterling (GBP)

employment guide_language

Language

English

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Capital

London

Employer of Record UK

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Other Regulations

Probationary Period

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in the UK

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Employer of Record United Kingdom

Embark on your business expansion in the UK with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the UK market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 8 May 2025. The content in this guide is current as of this date and based on common business practices.

Employment Contract

  • UK employers are required to provide employees with a written employment contract, which must include details on working hours, wages, sick leave, holidays, termination terms, grievance procedures, and disciplinary procedures.
  • Employees may also be covered by a Collective Bargaining Agreement (CBA), which sets out the general terms of employment for all employees included in the agreement.
Contract TypeDetails
Ful-Time ContractFor permanent employment positions. Can be paid annually or hourly. No fixed working hours requirement, most full-time employees in the UK work more than 35 hours per week.
Part-Time ContractSuch contract employees have more flexible working hours than full-time contract employees and is paid hourly or pro rata of annual salary based on his or her working hours.
Fixed-Term / Temporary ContractThe contract is valid for a fixed period. The duration of this type of contract can be renewed for up to 4 years. After 2 years, the employees’ rights will change and enjoy benefits as full-time employees, making it more difficult to terminate their contracts. It is recommended to sign a 23-month contract for such contract employees.
Zero-Hour ContractSuch contract employees are on-call according to the employer’s needs, and the workload, work content and working hours are not fixed. It is an employment agreement without any benefits or guarantees.
Consultancy ContractIn most cases, this type of contract has specific start and end dates or is for the purpose of completing a certain task or project. The employer is not responsible for withholding the consultants’ tax or national insurance.

Statutory Contributions

Statutory contributions include the Wales Pension Partnership (WPP) and National Insurance (NI).

National Insurance contributions are categorised into four classes, with employees further classified into eight codes. The following example shows the contributions for one class of employees for your reference.

TypeDetailsEmloyer ContributionEmployee Contribution
Pension PlanRetirement benefitsMinimum: 3%Minimum: 5%
National Insurance (NI)Basic social security

Weekly earning < £96: 0%

Weekly earning ≥ £96: 15%

Weekly earning < £242: 0%

Weekly earning £242.01 – £967: 8%

Weekly earning > £967: 0 – 2%

 TotalAbout 3% – 18%About 5% – 15%

Minimum Wage

The UK statutory National Living Wage (for those aged 21 and over) and National Minimum Wage (for employees at least of school-leaving age) have been revised, with the new rates taking effect from April 2025.

  • National Living Wage rates (workers aged 21 and over): £12.21/hour
  • Workers aged 18 to 20: £10/hour
  • Workers aged 16 to 17: £7.55/hour
  • Apprentice: £7.55/hour

Public Holidays

The public holidays listed below are national public holidays observed across the UK. Individual constituent countries may observe additional public holidays. Please refer to official government announcements in England and Wales, Scotland, and Northern Ireland for the latest updates.

  • New Year’s Day
  • Good Friday
  • Early May Bank Holiday
  • Spring Bank Holiday
  • Summer Bank Holiday
  • Christmas Day
  • Boxing Day

Working Hours

Normal Working Hours

  • Employees must not work more than 48 hours per week on average, calculated over a 17-week reference period.
  • Employees aged over 18 may opt out of the maximum working hours limit by signing a written agreement with their employer.
  • Employees may revoke an opt-out agreement at any time, provided they give at least 7 days’ notice.
  • Employers are required to keep accurate records of employees’ working hours.

  • The following categories of employees are not permitted to opt out of the maximum working hours limit:

    1. Airline staff
    2. Workers on ships or boats
    3. Workers in the road transport industry
    4. Bus conductors
    5. Taxi drivers
    6. Train and tube drivers
    7. Security guards on vehicles carrying high-value goods

Flexible Working Arrangements

The Employment Relations (Flexible Working) Act 2023 came into effect on 6 April 2024, introducing the following key changes:

  • Employees now have the right to submit applications for statutory flexible working arrangements from their first day of employment.
  • Each employee can make up to two requests under the statutory regime within any 12-month period.
  • Employers must respond to requests for flexible working arrangements within two months.
  • Employers may reject an application for valid business reasons, but must fully discuss the request with the employee and offer alternatives where possible.
  • Employees applying for flexible working arrangements are no longer required to explain the impact of the proposed changes on the employer or how they will manage the adjustments.

Rest Time

According to the ‘Working Time Directive’, employees are entitled to:

  • A 20-minute break for every six consecutive hours of work, paid or unpaid as determined by the employer.
  • At least 11 consecutive hours of rest between shifts.
  • At least 24 consecutive hours of rest per week, or 48 consecutive hours over a 14-day period.

Night Work

  • Night working hours are defined as 11:00 pm to 6:00 am. However, employers and employees may agree on an alternative night shift period of 7 hours, provided it includes the time between midnight and 5:00 am.
  • Employees who regularly work during the night hours for at least 3 hours are considered night shift workers, while those who work at night only occasionally are not.
  • The average working hours of night shift workers must not exceed 8 hours in any 24-hour period (excluding overtime), and employees cannot waive this maximum night work hours limit.

Overtime

  • Any hours worked beyond the standard working hours are considered overtime.
  • Employers are not legally required to pay overtime, but any overtime pay must not fall below the UK minimum wage.
  • Part-time employees working beyond their contracted hours are typically paid an additional hourly rate rather than overtime pay, unless certain conditions are met.
  • In practice, employers often provide Time-off-in-Lieu (TOIL) instead of overtime pay, but the arrangement must be agreed upon by both the employer and the employee.

Other Regulations

  • Protection against minor employees
  • Prohibition of gender discrimination
  • Rights of pregnant employees
  • Employee stock ownership plans
  • Business transfer regulations

Probationary Period

  • There is no statutory limit on the length of a probationary period, although it is usually no longer than six months.
  • For entry-level positions, a probationary period of three months is commonly applied.

Leave

Statutory leaves in the UK include:

TypeApplicable toDetails
Paid Annual LeaveAll Employees

Full-time employees: 28 working days

Part-time employees: 5.6 weeks, pro-rated based on their working hours.

Sick LeaveAll EmployeesPaid for up to 28 weeks Statutory Sick Pay (SSP).
Pregnancy and Maternity LeaveFemale Employees

Maternity leave: 26 weeks + additional 26 weeks (39 weeks are paid)

Leave for Ante-Natal Care: 6.5 hours, two or more occasions can be permitted.

Neonatal Care LeaveEmployees with sick or premature babies12 weeks (effective 6th of April 2025)
Paternity LeaveMale Employees1 – 2 weeks
Shared Parental LeaveAll Employees50 weeks (37 weeks are paid)
Carer’s leaveAll Employees1 week (unpaid)
Child Care LeaveAll Employees18 weeks (unpaid)
Parental Bereavement LeaveAll Employees2 weeks
Adoption LeaveAll Employees52 weeks (39 weeks are paid)
Time off for Job Hunting and TrainingDismissed EmployeesTo look for job opportunities according to actual situations
Time off for Public DutiesEmployees performing public dutiesAccording to actual situations, e.g. performing juror duties
Time off for Trade Union Duties and ActivitiesEmployees holding trade union positions or serving as employee representativesAccording to actual situations to perform trade union duties
Time off for Training or StudyEmployees who have served for an organisation with 250 or more employees for at least 26 weeksBased on actual situations to receive a training or education (unpaid)
 

Termination and Compensation

Termination Notice

Executed in accordance with the Employment Contract or Collective Bargaining Agreement (CBA).

  • Resignation by the employee: Must be served with at least 1 week’s notice if employed for more than 1 month.

  • Redundancy by the employer

    • At least 1 week’s notice if employed between 1 month and 2 years.
    • 1 week’s notice for each year of service if employed between 2 and 12 years.
    • 12 weeks’ notice if employed for 12 years or more.
  • Expiration of fixed-term contract: No notice is required. For early termination or contract renewal, notice periods can be negotiated in advance or applied according to the contract.
  • Summary Dismissal: In cases of gross misconduct (e.g., theft, violence, or endangering others or social security), the employer may dismiss the employee without notice. Disciplinary and grievance procedures outlined in the contract or employee handbook must be followed. No compensation is required in such cases.

Compensation

UK employers are generally required to pay statutory redundancy compensation to employees who have worked for them for two years or more. Key rules include:

Age Compensation
< 22 years of age Half a week’s pay for each full year of employment
≥ 22 years of age, < 41 years of age One week’s pay for each full year of employment
≥ 41 years of age One and half week’s pay for each full year of employment

Notes:

  • Length of service is capped at 20 years.
  • Weekly pay is calculated as the average earned per week over the 12 weeks preceding the redundancy notice.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with the UK’s regulations.
  • Contributions and Taxes: Our expertise in managing local social security requirements ensures your business complies with the UK’s financial obligations.
  • Compliance with Working Hours: We guarantee that your employment practices adhere to Germany’s working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with the UK’s laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in the UK

Unlock your growth potential with BIPO’s Employer of Record service in the UK. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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