Hiring in the UK
Companies need to register as an employer with HM Revenue and Customs before employing staff, so that they can pay tax and national insurance for the employees. Besides, employers also have the responsibility of contributing to pensions and Employers’ Liability Insurance.

National Minimum Wage
Workers of at least school leaving age are entitled to the National Minimum Wage as the minimum pay per hour. Workers of age over 23 will be eligible for the National Living Wage, which is higher than the National Minimum Wage. Contracts for payments below the minimum wage are not legally binding and the worker is still entitled to the National Minimum Wage or National Living Wage. This is regardless of whether the worker is a part-timer, casual, apprentice, trainee etc. Nonetheless, apprentices are entitled to the apprentice rate if they are under 19 or in the first year of apprenticeship.
Employer-provided accommodation can be taken into account when calculating the National Minimum Wage or National Living Wage. If an employer charges more than a standard offset rate (currently around £8-£9 a day), the difference is taken off the worker’s pay when counting for the National Minimum Wage or National Living Wage. If the accommodation charge is at or below the offset rate, it does not have an effect on the worker’s pay. If the accommodation is free, the offset rate is added to the worker’s pay.

Work Hours
Employees should normally work no more than 48 hours a week on average over 17 weeks. Except for specific job posts or industries, employees over 18 may choose to work more than 48 hours by opting out. However, employers cannot dismiss employees or treat them unfairly if they refuse to opt out.
Employees have the right to one uninterrupted 20-minutes rest break during their working day if they work more than 6 hours a day. They also have the right to an 11-hours daily rest between working days, as well as an uninterrupted 24-hours weekly rest and an uninterrupted 48-hours fortnightly rest.
There is no statutory requirement for employers to pay employees for overtime work. However, the average pay for the total hours they work must not fall below the National Minimum Wage.
Holidays and Leaves
Employees are by law entitled to 5.6 weeks’ paid annual leave a year. That is, employees who work a 5-day week must receive at least 28 days’ paid annual leave. This includes agency workers, workers with irregular hours and workers on zero-hours contracts. For example, part-time workers working 3 days a week must get at least 16.8 days of annual leave. Those working irregular hours (such as shift or term-time workers) are entitled to paid time off for every hour they work.
Bank holidays or public holidays do not have to be given as paid leave. An employer can choose to include bank holidays as part of employees’ statutory annual leave.
Other holiday entitlements of employees :
- Get paid for leave
- Accrue holiday entitlement during maternity, paternity and adoption leave
- Accrue holiday entitlement while off work sick
- Request holiday at the same time as sick leave
Employees shall also be eligible for Statutory Sick Pay at £99.35 a week for up to 28 weeks if they earn an average of at least £123 per week, have worked under an employment contract, and have been sick for 4 or more days in a row (including non-working days). This does not apply to those who are getting statutory maternity pay or were in custody or on strike on the first day of sickness.
Eligible employees can take up to 52 weeks of maternity leave : 26 weeks of Ordinary Maternity Leave and 26 weeks of Additional Maternity Leave. They are also eligible for statutory maternity pay for up to 39 weeks. The first 6 weeks will come with 90% of their average weekly earnings before tax while the remaining 33 weeks 90% or £156.66 (whichever is lower).
Employees may also be eligible for Statutory Paternity Leave and Pay if they and their partner are having a baby, adopting a child or having a baby through a surrogacy arrangement. They can choose to take either 1 week or 2 consecutive weeks’ leave. Statutory Paternity Pay for eligible employees is either £156.66 a week or 90% of their average weekly earnings (whichever is lower).
For all Statutory Sick Pay, Statutory Maternity Pay and Statutory Paternity Pay, tax and National Insurance need to be deducted.
Employers' Liability Insurance
All employers must get their Employers’ Liability Insurance. The policy must cover the employer for at least £5 million and come from an authorised insurer. It will help to pay compensation if an employee is injured or becomes ill because of their employment work. An employer can be fined £2,500 every day for not being properly insured.
Workplace Pension Scheme
All employers must set up a workplace pension scheme and pay 3% of the qualifying earnings of eligible employees into the scheme. Qualifying earnings include salary, bonus, commission, overtime pay as well as statutory maternity and paternity pay. Eligible employees are those who are aged between 22 and the State Pension age, earn at least £10,000 a year, and normally work in the UK. Employers must deduct contributions from employees’ pay each month and also pay their contributions for the employees to the service provider during each payroll.
National Insurance
Employees earning more than £242 a week and under State Pension age fall into National Insurance Class 1. Contributions will be made up of deduction from their pay as well as payment by their employers. If expenses or benefits (such as cars, travel expenses and childcare) are provided to their employees/directors, employers shall also pay Class 1A and 1B National Insurance. For payments of more than £30,000 when employment ends, such as a redundancy payment, employers shall also pay for Class 1A National Insurance contribution.