Your Guide to Hiring Employees and Contractors in United Kingdom
Pound Sterling (GBP)
Ease of doing business
0% – 45%
In the United Kingdom, the payroll frequency is typically monthly, with salary payments made between the 25th and 30th of each month.
Minimum Wage Requirements
In the United Kingdom, the National Living Wage depends on the age of the worker.
In April 2022, the national minimum wages were updated to the following hourly rates:
23 and over: £9.50
21 to 22: £9.18
18 to 20: £6.83
Under 18: £4.81
Individual Income Tax
Minimum 5% – Pension Fund
Up to GBP 11,850
Tax rate: 0%
Between GBP 11,850-46,350
Tax rate: 20%
Between GBP 46,350-150,000
Tax rate: 40%
Over GBP 150,000
Tax rate: 45%
- Minimum 4% – Pension Fund
- 15.05% – National Insurance Rate
- £60.32 – Employer Liability Insurance
- 0.50% – Monthly Apprentice Levy
Monday to Friday.
Overtime Pay & Maximum Hours
Standard working hours are 8 hours per day, 40 hours per week. The standard work week is from Monday to Friday.
Overtime payment is not mandatory. However, an employee’s average pay for the total hours they work must not fall below the National Minimum Wage.
Termination from the employer valid grounds with any fair reasons. There are six potentially fair reasons for dismissals:
- Employee’s capability or qualifications for performing work of the kind the employee was employed to do;
- Employee conduct;
- Employee retirement;
- Employee redundancy;
- Employee could not continue work in position without contravening statutory duty or restriction; or
- Other substantial reason justifying dismissal
Notice period depends on the length of the employment relationship. For up to 4 years of employment, the notice period is no less than 1 month.
For 5 to 11 years of employment, the notice period is no less than 1 week notice for every year of completed year of continuous employment.
Above 12 years, it is no less than 3 months.
There is no legal stipulation for minimum and maximum probation periods and all statutory rights and protections apply from commencement of employment. Employers can set probationary periods in the employment contract.
It is typical for a probationary period to last no longer than six months, and three months where an employee is moving to a new post internally.
The employer must provide at least one week notice to the work council before giving an employee notice of dismissal. If the work council requests, the employer must consult the council before the dismissal can take place.