The United Kingdom ranks no.1 in Europe and 4th worldwide for ease of doing business and 18th worldwide in the Ease of Starting Business index. This is why employers readily partner with an Employer of Record in the UK to accelerate their entry into the country.
Besides, factors such as low corporate taxes (18%), protection for minority investors (ranks 7th) and a burgeoning economy ($2.8 trillion GDP) gravitate employers towards this business powerhouse. The UK is also a high income country with a consumer based economy.
In terms of talent availability, the UK has over 160 universities, which steadily empower this knowledge economy. Labor in the UK is highly skilled and readily employable. The labour market also offers relatively cheaper labour when compared to other European countries such as Italy and Germany.
In order to tap into this talent market, companies try to establish a local entity. However, this may cost you anywhere between $12,000-$25,000 in the form of annual taxes, setting up physical infrastructure, opening bank accounts in the UK, choosing payroll vendors, etc.
By choosing to partner with Multiplier’s UK Employer of Record and PEO you can hire and expand into the country without a local entity and any employment risks.
Why Use an UK PEO
Although, UK may be one of the best places for business, it is different from your home country. For instance, employment contracts in the UK contain different statutory requirements..
Multiplier’s PEO in the UK can help you create compliant employment contracts. Our SaaS based solution automates employment contract creation and reduces onboarding processes to six clicks.
Moreover, you can automate several global HR and payroll processes. By partnering with our UK PEO, you reduce reliance on your own local infrastructure in the UK and expert payroll and HR specialists. In turn, you reduce expansion costs by 90% and time to hire by 70% by using our UK PEO.
UK PEO and Employer of Record Costs
Usually, PEOs charge based on two pricing models – fixed and variable. A PEO based on the fixed pricing model charges a transparent fee ranging between $200 – $1000 per employee per month.
Multiplier is one such PEO solution for the UK. The final price depends on the complexity of employment laws of the employee’s jurisdiction.
Our prices ensure that you get the most out of your spending. Every employee hired through our PEO in the UK also receives HR support, benefits management, and a live dashboard to track workforce spending in real-time.
How to Hire in UK
Hiring and employing talent in the UK must be pursued with compliance to Employment Rights Act 1996 and the Equality Act 2010.
The laws ensure that your UK employees aren’t overworked, underpaid and not discriminated on any grounds. To make sure you hire employees in the UK without attracting employment risks, take expert help. Multiplier’s UK PEO can help you onboard and pay employees in a snap.
If you are going to do it alone, here are a few tips to contract compliant employment contracts to hire in the UK.
An absent mindedly drafted contract which leaves out important details such as benefits and salary breakdown may lead to employee dissatisfaction. Employment contracts should be meticulously drafted with employment conditions, responsibilities, nature of employment, rights, etc.
Also, ensure your employment contracts are compliant with the Equality Act and the Employment Rights Act.
Refer to the table below to understand the tax slabs in the UK.
Withholding taxes is an integral part of processing payroll. Any discrepancies here may lead you to violate taxation laws in the UK. You can partner with Multiplier’s UK PEO to promptly withhold taxes while paying your employees. Our SaaS based solution allows you to process global payroll and generate payslips in a single-click.
Employees usually work between 9 a.m to 5 p.m on Monday-Friday.
You can task their employees for upto 48 hours per week.
Employees can also be asked to work overtime. However, there are no statutory requirements to compensate them for the extra hours of work.
You should withhold 13.8% on top of total compensation to fund their portion of National Insurance Contribution (NIC). The NIC is the national social security program which is funded by both employers and employees. These funds sponsor the UK’s public health care system.
Additionally, you are also responsible for withholding the employee’s contribution to the National Insurance Scheme. This scheme funds several state-funded benefits programs such as pension plans. You have to deduct this amount through the PAYE system.
However, it is those companies that outdo minimum statutory requirements that attract the finest of talent. Many employers provide medical, vision, dental and life insurances to entice talent into their company. Apart from attracting top talent, offering emphatic benefits to your employees improves trust levels.
When offering benefits to your global team, it is important to offer locally renowned benefits that are homogenous for all your employees around the world. Multiplier’s UK PEO and Employer of Record offers the best medical and dental coverage benefits plan.
Here are some tips to plan leaves for your UK employees.
The UK celebrates eight public holidays:
- New Year’s Day
- Good Friday
- Easter Monday
- Early May Bank Holiday
- Spring Bank Holiday
- Summer Bank Holiday
- Christmas Day
- Boxing Day
Female employees in the UK are entitled to 52 weeks of maternity leave – 26 weeks of “Ordinary Maternity Leave” and 26 weeks as “Additional Maternity Leave.”
Pregnant employees are entitled to 39 weeks of maternity pay according to statutory requirements. However, this allowance is only when the employee has worked with you for 26 weeks and meets minimum earnings requirements.
Although employees aren’t required to take all 52 weeks of maternity leave, it is recommended that the employee takes two weeks off when the baby is born.
It is important to note that employers can face criminal charges if they allow an employee to return to work within two weeks of giving birth.
UK employees are entitled to a minimum of 28 days of paid annual leave. This can also include the bank holidays. Vacation pay is usually based on the average pay over the 52 weeks prior to the vacation, or the number of weeks of employment if the worker has been with the employer for less than 52 weeks.
Employees who earn at least £120 per week and are incapable of working for more than four consecutive days are entitled to £95.85 per week of Statutory Sick Pay (SSP), for up to 28 weeks.
Employers can offer more sick pay, called “contractual” or “occupational” pay, as part of the employment contract, but they cannot offer less than the statutory minimum. You cannot expect employees to contribute towards sick leave payments.
The UK Employment Rights Act 1996 stipulates the notice period for employees in the UK.
According to the act, employees need not give a notice period if they are employed for less than a month unless their employment contract dictates otherwise.
Similarly, they are to give one week’s notice for each year if employed between 2 and 12 years and 12 weeks’ notice if employed for 12 years or more.
However, most employers offer a notice period for upto six months.
While terminating employees, you are advised to follow the ACAS (Advisory, Conciliation and Arbitration Service) Code of Practice to help ensure fair dismissal.
Terminating employees in the UK need not be a big deal despite a slew of Code of Practice to follow. As your EOR in the UK, we will bear all legal responsibility for your employer. You can comfortably terminate an employee in case of unforeseen circumstances without following any processes – we would handle all the paperwork to ensure your employee is fairly terminated.
Get The Multiplier Advantage
Using Multiplier’s PEO/EOR solution, expanding into a new market is seamless and simple..
We can help you onboard your preferred candidate, handle HR issues and payroll, and ensure compliance with local laws. By partnering with our UK EOR, you avoid the hassle of setting up a foreign branch or subsidiary.
Once you have chosen your desired talent, start generating and customizing employment contracts for them in a few clicks and manage the workforce from a single platform. You can also pay thousands of employees in Great Britain Pounds(GBP) in a single click.
Hire and expand using the best SaaS-based UK PEO/EOR. Contact us to grow your business today.