Expanding Your Business: Payroll in The United Kingdom

If you're looking to hire in the U.K., leverage Paylocity's integrated global payroll solution with real-time access to aggregated payroll data.

Payroll in the U.K.

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.

What is the Minimum Wage in the U.K.?

Minimum wage as of April 2024:

  • Ages 23+ GBP 8.91
  • Ages 21-22 GBP 8.36
  • Ages 18-20 GBP 6.56
  • Under 18 GBP 4.62
  • Apprentice GBP 4.30

Payroll Taxes in the U.K.

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:

  • Recording payments of salary, wages, and other pay
  • Calculating deductions for taxes and national insurance
  • National insurance contributions for employee earnings
  • Creating payslips for every employee
  • Reporting all data to HMRC in a Full Payment Submission (FPS)

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.

U.K. Leave Requirements

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.

Sick Time

Employees may be eligible for Statutory Sick Pay for up to 28 weeks.

Maternity Leave

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.

Retirement Policies

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.

Holidays in the U.K.

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.

  • January 1: New Year’s Day
  • January 3: New Year’s Day observed
  • April 15: Good Friday
  • May 2: Early May Bank Holiday
  • June 2: Spring Bank Holiday
  • June 3: Queen’s Platinum Jubilee
  • December 25: Christmas Day
  • December 26: Boxing Day
  • December 27: Substitute Bank Holiday for Christmas Day

Easily Hire and Pay Employees in The U.K.

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.

Want to learn more? Request a demo today!

Pay Employees in the U.K., Simply and Seamlessly

Establish a Presence

Easily set up business entities and simplify compliance with local requirements. Hire in-country and manage your expat employees.

All Payroll in One Place

Reduce manual processes and compliance issues by creating, managing, and paying domestic and global employees in a single place.

Tap into Local Experts

A U.S.-based service team and direct access to in-country professionals relieve the headaches of paying an international workforce.

Request a Blue Marble Payroll Demo

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