Employer of Record (EOR) in the UK
When hiring new employees in the UK, an EOR provider can ensure a compliant hiring process that’s aligned with the legal requirements. If you’re freelancing, you can get an “employed” status through the EOR’s legal entity in the UK.
How does an EOR in the UK work?
An EOR provider like Native Teams allows businesses to grow globally without the hassle of setting up a legal entity or dealing with legal complexities. The EOR handles payroll, employment contracts, onboarding, and compliance with local laws, while the business retains control over day-to-day employee management.
For freelancers, remote workers, and digital nomads, an EOR provides formal employment status while maintaining work flexibility. This offers access to valuable benefits like private health insurance, pensions, and legal employment contracts, combining the freedom of remote work with the security of traditional job perks.
Who can use EOR Services in the UK?
Growth-minded businesses and individuals working on the global scene can benefit from EOR services in the UK.
Businesses
Businesses looking to expand into the UK market can do that with the EOR’s legal entity instead of establishing their own in the country. This saves businesses time and money, as the EOR handles the onboarding process, payroll processing, social contributions, tax regulations, and more. By handing these tedious tasks over, businesses can get more time to focus on their growth.
Individuals
Freelancing often entails handling taxes, social security contributions, and other legal requirements on your own. Plus, their ever-changing nature makes it difficult to keep abreast of the newest changes. An EOR knows all the nooks and crannies of the UK labour law — from complaint employment contracts and taxes to social security. This gives you a peace of mind, knowing that every aspect of your employment is fully compliant.
Features of Native Teams EOR Services in the UK
Employment status
Native Teams’ EOR services enable freelancers to manage their employment status legally, regardless of where they live and work. Employers can also hire, onboard, and pay their global teams in compliance with regulations.
HR administration and documentation
HR tasks are automated, with easy access to documents via the Native Teams dashboard.
Global payroll
With a payroll calculator across 70+ countries, both freelancers and employers can calculate salaries, taxes, and benefits easily, all on one platform.
Benefits
Freelancers maintain flexibility while enjoying benefits like healthcare and pensions, and employers can offer these perks to attract top talent.
Explore the UK’s labour laws in our hiring guide.
What legal requirements exist for employment in the UK
Paying income tax
All employees in the UK are required to pay income tax on their earnings, which depends on their income level.
National insurance contributions
Employees in the UK are also required to make National Insurance contributions, which fund the country's social security system.
Employment contracts
UK companies must provide a written employment contract within 2 months of the start of employment. It’s mandatory to outline the terms of employment, such as pay rate, working hours, and holiday entitlement.
Discrimination laws
Anti-discrimination laws must be followed at all times, which prohibit discrimination on the basis of age, gender, race, religion, disability, and other factors.
Health and safety regulations
Employers must ensure that their workplace is safe and that employees are not put at risk while at work.
Minimum wage laws
Employees must be paid at the least the national minimum wage, which depends on their age and whether they are apprentices or employees.
Pension auto-enrolment
Employers may also be required to withhold state and local income taxes from employees' wages, depending on the state and local laws. It’s important for employers to stay up-to-date on all legal and tax requirements for employment to ensure compliance with federal and state laws.
Please note that British laws and regulations can change. So, it’s important to keep abreast of the latest developments regarding labour law.
Why Choose Native Teams as your UK Employer of Record?
Native Teams has a team of experts that’s equipped with the knowledge needed to ensure tax compliance and social security contributions in the UK. Plus, we provide you with locally crafted employment contracts that outline the essential details of the employment relationship.
We also make sure you follow the anti-discrimination, health regulations, and minimum wage requirements for a fair and safe workplace. Focus on your craft while we work from the background, handling all the details.
What is an Employer of Record?
An Employer of Record (EOR) is a third-party organisation that assumes the legal responsibilities of employing workers on behalf of another company. The EOR handles payroll, tax compliance, and benefits and ensures adherence to local labour laws. It also helps freelancers and remote workers formalise their employment status and access benefits.
What are the costs of using an Employer of Record in the UK?
EOR costs in the UK depend on the provider, the number of employees, and the services needed. Native Teams offers competitive pricing, with the business EOR plan starting at €79 per employee per month and the individual Remoter plan at €49. Both plans cover essential legal employment services.
What is the difference between PEO and EOR?
An EOR takes full responsibility for legal employment tasks, including payroll, taxes, and compliance, whereas a PEO shares these duties with the client in a co-employment model. EORs are ideal for businesses expanding into new regions without a legal entity, while PEOs are suited for companies already operating in a country and looking to streamline HR processes.
What are the responsibilities of an Employer of Record (EOR) service provider?
EOR service providers act as the legal employer, managing payroll, benefits, and employment contracts while ensuring compliance with local labour laws. They assume liability for employment-related matters and offer HR support, allowing businesses to focus on growth and operations.
Is using an Employer of Record in the UK legal?
Yes, using an EOR in the UK is completely legal and complies with British labour laws. International companies commonly use EOR services to enter the British market, and freelancers also use them to formalise their employment status.
Why should I use EOR instead of opening my own company or an office in the UK?
An EOR enables businesses to avoid the complexities of establishing a legal entity in the UK. The EOR takes care of the legal employment processes, such as payroll and compliance, and provides the flexibility to scale operations without the burden of closing a company if circumstances change.
How many people can I employ in the UK?
There’s no legal limit to the number of employees a company can hire in the UK, provided that all labour laws are followed. The number of employees you can hire depends on your business needs, financial resources, and your ability to effectively manage staff.