As of 2024 approximately 68.6 million people and is the 6th largest economy in the world by GDP. There are unique payroll and tax requirements for companies operating in the United Kingdom, and many business entity options for companies looking to expand.
Minimum wage as of April 2024:
The U.K. tax year begins April 6th, requiring employers to provide several reports to HMRC prior to April 5th, including final RTI submission, a P60 for each employee, P11d reporting (if needed), and Benefits in Kind reporting and payments.
Residents are liable to pay income tax on all income. Anyone who stays in the U.K. for more than 183 days are automatically considered residents.
Companies must file with Her Majesty’s Revenue and Customs (HMRC) as well as manage Pay-As-You-Earn (PAYE) to file taxes and National Insurance contributions. Depending on the industry and type of business, you must submit payroll taxes monthly or quarterly to ensure compliance. Employers must comply with PAYE responsibilities including:
Pension auto-enrollment schemes and contributions can be set up to coincide with payroll to simplify calculations, continuous assessment for each employee, and ensure compliance with U.K. auto-enrollment regulations.
Employees are legally entitled to 28 days of paid holiday per year. People with varying or irregular hours are entitled to paid time off for every hour of work.
Employees may be eligible for Statutory Sick Pay for up to 28 weeks.
Maternity leave is 52 weeks.
Paternity leave is 1-2 consecutive weeks and cannot be taken until after the birth.
Employees are eligible for severance for many reasons. Pay ranges from half-week to one and-half-weeks of pay for each year of service.
The pension system is known as the New State Pension, and an employee is eligible after 10 years of working and making contributions to the National Insurance. The max amount of pensions an employee can receive is GBP 203.85 as of 2024 per week and is typically paid every four weeks.
When planning to hire in the U.K., it's crucial to be aware of the official holidays when employees may not be available for work.
Is the United Kingdom in your hiring or expansion plans? Paylocity can help. Our cloud-based platform helps you navigate the waters of international payroll.
And don’t sweat complicated compliance — our hybrid service model includes a U.S.-based team and in-country experts in the U.K. to help when you have questions.
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