At a glance

Currency

Pound sterling (GBP)

EOR model

Widely used; the provider runs payroll through PAYE

Agency workers

Equal treatment on pay and conditions after 12 weeks

Contractor test

Employment status tests and IR35

Employer costs

15% employer National Insurance above £5,000 a year, plus minimum pension (sample)

Annual leave

5.6 weeks, which can include bank holidays

Statutory notice

One week per year of service, up to 12 weeks

Minimum wage

£12.71 an hour for workers aged 21 and over from April 2026

• Employer of record

  EOR arrangements are common in the UK. The provider is the legal employer and runs payroll through PAYE.

  Whether the worker also counts as an agency worker depends on how the arrangement works in practice. If you direct their day-to-day work, the Agency Workers Regulations may apply, and providers supplying workers must follow the Conduct of Employment Agencies and Employment Businesses Regulations 2003.

  Conduct of Employment Agencies and Employment Businesses Regulations 2003

• Agency workers

  Agency workers gain equal treatment on basic pay and working conditions after 12 weeks in the same role.

  Some rights, such as access to shared facilities and job vacancies, apply from day one.

  Agency Workers Regulations 2010, regs 5, 7, 12 and 13

• Contractors and IR35

  Status turns on control, personal service (whether they can send a substitute) and mutuality of obligation.

  Under the off-payroll working rules (IR35), medium and large clients must decide a contractor’s status themselves and give the contractor a status determination statement. HMRC’s Check Employment Status for Tax (CEST) tool gives an indication.

  ITEPA 2003, Part 2, Chapter 10

• Permanent establishment

  A fixed place of business, or a dependent agent who habitually concludes contracts for you, can create a UK permanent establishment, with corporation tax due on profits attributable to it.

  An EOR employs the worker but doesn’t remove your own exposure.

  Corporation Tax Act 2010, s1141; applicable tax treaty

• Right to work

  British and Irish citizens need no permission; checks use their passport or a certified digital identity service. Everyone else, including EU citizens since 2021, needs settled or pre-settled status or a visa, checked online with a share code.

  Sponsored Skilled Workers need a licensed sponsor. Fines reach £60,000 per illegal worker, and a correct check before work starts is the employer’s defence.

  Immigration, Asylum and Nationality Act 2006, s15

Check a real case in the United Kingdom

Free tools that apply these rules to your own workers and quotes.

• Worker checkMisclassification, PE and co-employment risk for one person in the United Kingdom
• Bill rate calculatorFrom pay rate to the true monthly bill in the United Kingdom
• Right to work checkWho needs permission to work in the United Kingdom, and what to check

General information, not legal advice. Rules change and depend on the facts of each case, so check with qualified local counsel before acting.