Table of Contents

United Kingdom

Table of Contents

Currency

Pound Sterling (GBP)

Payroll Frequency

Weekly or Monthly (within 25th-30th of the month)

Employer Taxes

16.80% + varying taxes

About United Kingdom

The United Kingdom is made up of Scotland, Wales, and England, with the larger entity known as Great Britain and Northern Ireland. They border the Republic of Ireland to the west and across the English Channel and the North Sea as well as border countries such as France, Belgium, Netherlands, Germany, Denmark, and Norway. After several centuries as a globally dominating colonial power, the UK’s economic and political influence was diminished by the two world wars and the breakup of the British Empire.

English is the country’s official language. Other native languages include Celtic, Scots Gaelic, Welsh, Cornish, Irish and Old Norse. Modern Britain is largely multicultural, with almost two-thirds of the population who profess not to believe in God, while 36 percent are members of the official Anglican church. Social classes still permeate the culture and continue to include tensions between the working class and a few aristocrats. It has a constitutional monarchy where the government is run by a prime minister but each of the four nations has its own judicial system. Recently, the UK announced its intention to exit the European Union, popularly known as ‘Brexit’.

Employment Relationship

• Permanent Employment

In the United Kingdom, a "permanent employee" is defined as an individual employed for an indefinite duration. Employees subject to a fixed-term contract are not permanent employees. However, if the employee has been continuously employed for 4 or more years on a series of successive fixed-term contracts, they are automatically deemed to be permanent employees (that is, employed on an indefinite contract) unless the continued use of a fixed-term contract can be objectively justified. Permanent employees are entitled to the statutory minimum level of paid holiday, deductions for social security contributions, the statutory minimum length of rest breaks, statutory sick pay, as well as maternity, paternity, adoption benefits, and leave.

• Fixed-Term or Specific-Purpose Contracts

In the United Kingdom, fixed-term contracts are made by employers with the intention that employment under these contracts is to be temporary, not permanent. There are four different types of fixed-term contracts which are as follows: A fixed-term contract that automatically ends on the expiration of a fixed term without the need for notice, A fixed-term contract, which contains a notice provision that allows for early termination upon notice before the expiry of the fixed term. However, if notice is not given, the contract will expire automatically at the end of the term,  A fixed-term contract that provides notice must be given before the expiry date for the fixed term to come to an end, or A contract that is stated to be for an initial fixed term, during which time notice may not be served, with this becoming an open-ended contract after the initial fixed term has expired.  A fixed-term employee has the right not to be treated by their employer less favorably than the employer treats a comparable permanent employee as regards the terms of their contract or by being subjected to any other detriment by any act, or deliberate failure to act, of their employer. There is no documented limit to fixed-term contracts' maximum duration (including renewals). However, if an employee is consistently employed for at least 4 years, they will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so.

• Temporary Employment Contratcs

Employers can hire temporary employees through temporary employment agencies. Such employees receive their wages from the agency. Employers pay the agency, and are also responsible for paying National Insurance contributions (NICs) and Statutory Sick Pay (SSP). It is the agency’s responsibility to make sure that their employees are compliant with regard to working time regulations. Agency employees must be allowed to use any shared facilities available at the employer's premises and be given information about job vacancies from the first day they begin work. Employers are responsible for their health and safety in the workplace. After 12 weeks of continuous employment in the same role, temporary employees are entitled to receive the same terms and conditions as permanent employees, including pay, working time, rest periods, night work, breaks, and annual leave. Employers must provide agencies with information about the relevant terms and conditions in the workplace so that the agency can ensure the employee gets equal treatment after 12 weeks in the same job. 

Probationary Period

In the United Kingdom, trial periods can be used by employers as a way to decide if the employee is a good fit for the job. The length and conditions of any applicable probationary period must be included in the principal statement given to the employee or worker when they begin working. It must last no more than 30 days for jobs lasting 6 months or more. Jobseekers receive their benefits on a work trial, but not wages. Employers can also extend the work trial with the employee's consent before starting the job.

Working Hours

In the United Kingdom, the labor law states that the standard workweek is 48 hours, averaged over a 17-week period. Night shift work cannot exceed eight hours daily. Employees under 18 years cannot work for more than 40 hours a week or eight hours a day. There are also instances in which individuals may have more than one job, in which case they may meet the 48-hour "working time directive" by: Signing an opt-out agreement Reducing hours to meet the 48-hour limit Employees are allowed to work remotely by submitting an application to their employers if they’ve worked continuously for the same employer for the last 26 weeks. The application must contain a statement that it is a statutory request and details of how the employee wants to work flexibly and when they want to start. Employers can reject the application on objective grounds.

Holidays / PTO

• Statutory Holidays

New Year’s Day (1st January); Good Friday (varies); Easter Monday (varies); Early May bank holiday (varies); Spring bank holiday (varies); Summer bank holiday (varies); Christmas Day (25th); Boxing Day (26th December).

• Paid Annual Leave

Generally, employees are legally entitled to 5.6 weeks (28 days) of paid holiday per annum. Persons working irregular hours (like shift or term-time workers) are entitled to paid time off for every hour they work. The accrual of annual leave begins at the start of employment. Employers can include bank holidays as part of statutory annual leave. Bank or public holidays do not have to be given as paid leave.  The number of leave days to be carried over to next year is specified in the employment contract. If an employee gets 28 days’ leave, they can carry over a maximum of eight days.

• Sick Leave

In the UK, employees are allowed to take time off work due to sickness. If the time off work exceeds 28 days, a doctor's note must be provided. There is no legal maximum to the number of sick days an employee can take in the United Kingdom. Employees who earn an average of at least GBP 123 per week and have been sick for four days in a row are eligible to receive Statutory Sick Pay (SSP) during their sick leave. The SSP is GBP 116.75 per week and is paid by the employer for up to 28 weeks. 

• Maternity Leave

Maternity leave is 52 weeks long and comprises ordinary leave for the first 26 weeks and additional leave for the remaining 26 weeks. It is paid at 90% of an employee's average weekly pretax earnings for the first 6 weeks of leave and GBP 184.03 or 90% of average weekly earnings (the lower value) for the remaining 33 weeks. If an employee does not qualify for SMP, she can get a maternity allowance for up to 39 weeks, depending on her pay level, employment status, and marital status, if she has paid Class 2 National Insurance contributions.

• Paternity Leave

Employees in the United Kingdom are entitled to paternity leave if their partner is giving birth to or adopting a baby, or having a baby through a surrogacy arrangement. This includes same-sex partners. Employees can choose to take either 1 week or 2 consecutive weeks’ leave. Paternity leave cannot start before birth and must occur within 56 days of delivery. The Paternity Leave Amendment Regulations 2024 will come in effect on April 6, 2024. It is applicable in cases where the expected date of birth or adoption falls on or after April 6, 2024. It allows fathers to take their 1 or 2 weeks of paternity leave either together or in parts. This leave can be taken within 52 weeks of childbirth or adoption. The notice period required to application of this leave is 4 weeks before the expected date of childbirth. Statutory paternity pay is GBP 184.03 (British pounds) per week or 90% of the employee's average weekly rate (whichever is lower). Employees must have been continuously employed for at least 26 weeks up to any day in the "qualifying week" (the 15th week before the due date) to be eligible for statutory pay. 

Termination of Employment

• Notice Period

In the United Kingdom, the notice period for individual dismissal is generally determined in the employment contract. Without an express agreement, the statutory minimum notice periods will apply. The reason for an individual’s dismissal should always be confirmed in writing, regardless of how long they’ve worked for the employer. The statutory notice periods are as follows: No less than 1 week if the employee's period of continuous employment is less than 2 years No less than 1 week for each year of continuous employment between 2 and 12 years No less than 12 weeks if employment has lasted 12 years or longer No notice is required if the employee has been working for less than 1 month (unless the employment contract provides otherwise).  Employers have to pay wages for the duration of the notice period and provide a statutory redundancy payment (if the dismissal is for the reason of redundancy and the employee is entitled to such a payment).

• Severance Benefits

In the United Kingdom, an employee has the right to receive certain payments from an employer in the following cases: The employment contract is terminated for redundancy reasons, provided the employee has worked for at least 2 years with the employer; The employee's resignation is deemed constructive by an Employment Tribunal; or The dismissal is considered to be unfair by an Employment Tribunal. Pay ranges from a half-week to one and a half weeks’ worth of pay for each year of service, based on the employee's age. The length of service is capped at 20 years. The maximum statutory redundancy pay is currently GBP 21,000.