Employer of record in the UK: cost and rules (2026)

Employing someone in the UK costs the employer about 16.0% on top of gross salary in statutory contributions, plus an EOR fee of $199 to $699 per month at providers that publish prices ("from" prices). Example: a gross salary of GBP 5,000 per month costs GBP 5,798 per month (about $7,677) before any EOR fee.

Rates checked: 2026-11-14. The employer pays secondary National Insurance on pay above a small monthly threshold, plus the minimum employer contribution to a workplace pension for eligible staff. Pension contributions are charged only on a middle band of earnings. There is no mandatory 13th salary, and statutory paid leave is set by law. Estimates only, not advice: see the note at the bottom of the page.

Employer contributions in the UK

Minimum wage: GBP 2,203 per month. The National Living Wage for workers aged 21 and over is GBP 12.71 per hour from April 2026. The monthly figure is our estimate for a 40-hour week (12.71 x 40 x 52 / 12 = GBP 2,203.07). Lower hourly rates apply to younger workers (GBP 10.85 for ages 18 to 20, GBP 8.00 under 18 and for apprentices in their first year or under 19). Source: GOV.UK, National Minimum Wage and National Living Wage rates

Worked example: GBP 5,000 gross per month

Contractor, EOR or own entity in the UK

Contractor

A person is an employee if they work under an employment contract, for example with set hours, a manager controlling the work, no right to send a substitute, and paid holiday. If status is wrong, the business may owe unpaid tax and penalties. When a contractor works through their own company, the IR35 off-payroll rules can treat them as an employee for tax: usually the client decides, and a small private-sector client leaves that to the contractor's company. A genuine contractor pays their own tax and National Insurance. Source: GOV.UK, Understanding off-payroll working (IR35)

Own entity

A private limited company can be incorporated with Companies House for GBP 100 online (GBP 124 on paper). It needs a UK registered office address. Before employing staff you also need to register as an employer with HMRC, run payroll and arrange a workplace pension. Source: GOV.UK, Companies House fees

Leave, notice, probation and termination

Annual leave: 28 days. Statutory paid leave is 5.6 weeks a year, which is 28 days for a five-day week, and never more than 28 days. Part-time staff get a proportional amount. The employer may count bank holidays as part of this leave.

Public holidays: 8. England and Wales have 8 bank holidays in 2026; Scotland and Northern Ireland have 10 each (gov.uk/bank-holidays, checked 14 Nov 2026). Bank holidays are not a separate legal right to time off. Source: GOV.UK, Holiday entitlement and bank holidays

Notice

The statutory minimum notice an employer must give is one week once the employee has worked for more than a month. After 2 years it is one week for each year of service, up to 12 weeks. Contracts often set longer periods, and these bind both sides. Source: GOV.UK, Redundancy: notice periods

Probation

The law does not require a probation period, and the contract can set any length. Statutory notice still applies during probation. Employees currently gain unfair dismissal protection after 2 years of service. Reforms have been announced to shorten this, so check the current rule before relying on probation as a way to end employment. Source: Acas, Probation periods

Termination

Employees with at least 2 years of service are normally entitled to statutory redundancy pay: half, one or one and a half weeks' pay per year of service depending on age, with at most 20 years counted. For redundancies from 6 April 2026 a week's pay is capped at GBP 751, so the maximum is GBP 22,530. Fair-process and unfair dismissal rules apply in addition. Source: GOV.UK, Redundancy pay

What the calculator simplifies

• Employment Allowance (up to GBP 10,500 a year off the employer's total National Insurance bill) is not applied: it is per employer, not per employee, and some employers (for example a single-director company) cannot claim it. Where it applies, the real National Insurance cost can be lower.
• Apprenticeship Levy (0.5% of the annual pay bill, with a GBP 15,000 allowance) only affects employers with a pay bill above GBP 3 million a year, so it is not added.
• Pension is modelled at the 3% legal minimum on the earnings band; many employers pay more. It assumes the employee is enrolled (age 22 or over, earning over GBP 10,000 a year) and does not opt out.
• Reduced or zero National Insurance rates for under-21s, apprentices under 25, veterans and some freeport sites are not modelled.
• Statutory sick pay, maternity pay and other employer-funded benefits are not included.
• The monthly minimum wage is an estimate for a 40-hour week.

EOR provider prices

Prices are "from" (starting) prices as shown on each provider's own page, usually per employee per month. What you pay can be higher and depends on country, headcount and contract length. Sorted by price, lowest first; providers that publish no price come last.

Affiliate disclosure: we may join providers' affiliate programmes, so links may become affiliate links. Right now the site has no affiliate links. Order is by published price; ties are listed alphabetically. Read the disclosure.

Calculator for the UK

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FAQ

How much does it cost to employ someone in the UK?

On top of gross salary, statutory contributions and mandatory accruals add about 16.0% at a gross salary of GBP 5,000 per month. That is a total of GBP 5,798 per month before any EOR fee.

How much does an employer of record cost in the UK?

Providers that publish a price list charge $199 to $699 per month for EOR plans ("from" prices, checked 2026-11-14). This is on top of salary and the statutory employer costs above. Source

How much paid leave do employees get in the UK?

Annual leave is 28 days, plus 8 public holidays. Statutory paid leave is 5.6 weeks a year, which is 28 days for a five-day week, and never more than 28 days. Source

What is the notice period in the UK?

The statutory minimum notice an employer must give is one week once the employee has worked for more than a month. After 2 years it is one week for each year of service, up to 12 weeks. Contracts often set longer periods, and these bind both sides. Source

Is there a probation period in the UK?

The law does not require a probation period, and the contract can set any length. Statutory notice still applies during probation. Employees currently gain unfair dismissal protection after 2 years of service. Reforms have been announced to shorten this, so check the current rule before relying on probation as a way to end employment. Source

What are the rules on ending employment in the UK?

Employees with at least 2 years of service are normally entitled to statutory redundancy pay: half, one or one and a half weeks' pay per year of service depending on age, with at most 20 years counted. For redundancies from 6 April 2026 a week's pay is capped at GBP 751, so the maximum is GBP 22,530. Fair-process and unfair dismissal rules apply in addition. Source

Sources

Rates checked: 2026-11-14.

• GOV.UK, National Minimum Wage and National Living Wage rates
• GOV.UK, HMRC rates and thresholds for employers 2026 to 2027
• GOV.UK, Workplace pensions: what you, your employer and the government pay
• GOV.UK, Holiday entitlement and bank holidays
• GOV.UK, Redundancy: notice periods
• Acas, Probation periods
• GOV.UK, Redundancy pay
• GOV.UK, Understanding off-payroll working (IR35)
• GOV.UK, Companies House fees