🇬🇧 Hiring in the United Kingdom

💡 Everything you need to know to hire and manage employees in the United Kingdom through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 3-5 business days between submitting a new hire and their start date. Your new hire completes a right to work check before or on day one and provides their National Insurance number, while Toku sets up tax withholding and enrolls them in a workplace pension (auto-enrollment applies to all qualifying employees).

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, employers in the UK pay:

As a rule of thumb, total cost of employment is roughly 115-118% of gross salary. There is no 13th month salary in the UK.

Employees pay their own share too: income tax of 20-45% depending on earnings (Scotland sets its own rates), National Insurance of 8% on earnings between GBP 12,571 and GBP 50,270 and 2% above that, and a 5% minimum pension contribution. These are withheld from gross salary through PAYE, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in the United Kingdom, and employees receive an itemized payslip each cycle. From April 1, 2026 the National Living Wage (age 21 and over) is GBP 12.71 per hour, with GBP 10.85 for workers aged 18-20. Salaries are paid in GBP by bank transfer. There is no statutory overtime premium in the UK; any overtime pay is a matter of contract.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, including the written statement of employment particulars required on or before day one.
• Permanent (indefinite-term) contracts are standard. Fixed-term employees must not be treated less favorably than permanent staff, and successive fixed-term contracts convert to permanent after 4 years unless objectively justified.
• Probation is 6 months per Toku's employment agreement. There is no statutory probation period in UK law; note that from January 1, 2027 unfair dismissal protection will begin after 6 months of service (down from the current 2 years).

Working Hours

A typical contractual week is 37.5-40 hours. The legal maximum is 48 hours per week averaged over 17 weeks, and employees can voluntarily opt out of this cap in writing. Employees are entitled to 11 consecutive hours of daily rest, 24 hours of uninterrupted weekly rest, and a 20-minute break on working days over 6 hours. There is no statutory right to overtime pay, though total pay must never fall below the minimum wage per hour worked.

Leave Entitlements

Leave accrues from day one and is pro-rated for part-time workers. Statutory family leave payments are made through payroll but are largely recoverable from HMRC, so the net cost to you is limited.

Public Holidays (2026)

England and Wales observe 8 bank holidays in 2026; Scotland observes 9 (adding January 2 and St Andrew's Day, without Easter Monday) and Northern Ireland 10 (adding St Patrick's Day and the Battle of the Boyne). Whether bank holidays are paid days off on top of annual leave depends on the employment contract.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): the NHS provides healthcare free at the point of use, the State Pension is funded through National Insurance, and every qualifying employee is auto-enrolled in a workplace pension with minimum combined contributions of 8% of qualifying earnings (3% employer, 5% employee). Statutory sick pay and family leave payments run through payroll.

Through Toku you can add UK Supplemental Healthcare, Pension, Life Insurance and Critical Illness: VitalityHealth private medical cover, enhanced pension contributions through Smart Pension, and life and critical illness cover for your team.

Other common extras include income protection insurance, dental and optical cover, employee assistance programmes, enhanced maternity and paternity pay, cycle-to-work schemes, and gym memberships. Toku can advise on the cost impact of any of these.

Ending Employment

There is no at-will employment in the UK: dismissals need a fair reason and a fair process, and unfair dismissal protection currently applies after 2 years of service, dropping to 6 months from January 1, 2027, so involve Toku early if you are considering ending an employment relationship. For the process, see How to Terminate an Employee or Contractor and the UK Fair Dismissal Process Guide.

Contractual notice is often longer, and payment in lieu of notice is possible where the contract allows. Statutory redundancy pay applies after 2 years of service: 0.5 to 1.5 weeks' pay per year depending on age, with weekly pay capped at GBP 751 (from April 2026) and a maximum payment of GBP 22,530; redundancy pay is tax-free up to GBP 30,000.

Hiring Someone from Overseas?

Since Brexit, EU nationals need immigration permission to work in the UK unless they hold settled or pre-settled status, and every employee must pass a right to work check before starting. The main employer-sponsored route is the Skilled Worker visa, but Toku cannot sponsor Skilled Worker or similar sponsored visas for UK employees; candidates may instead qualify for the self-sponsored Global Talent visa, which Toku can help them prepare for. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.