What does it cost to employ someone in the UK in 2026/27?

Employers pay 15% National Insurance on earnings above GBP 5,000 a year, plus at least 3% workplace pension on qualifying earnings. Large employers also pay the 0.5% Apprenticeship Levy. Eligible employers can offset up to GBP 10,500 a year through the Employment Allowance.

When are UK payroll taxes due?

Employers report each payroll to HMRC through Real Time Information on or before payday. PAYE tax and National Insurance are due by the 22nd of the next tax month when paid electronically. The UK tax year runs from 6 April to 5 April.

Can Good Balance Global hire in the UK for my company?

Yes. As your Employer of Record (EOR), we employ the person in the UK, run PAYE payroll, and enroll them in a workplace pension. We also check IR35 and right-to-work rules, so the setup works for both employees and contractors.

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Payroll and benefits guide

United Kingdom

CapitalLondon

Fiscal Year6 April - 5 April

Date Formatdd/mm/yyyy

CurrencyGBP (British Pound Sterling)

Payroll FrequencyMonthly

Employer Taxes15% – 18.5%

Employee Costs7% – 13%

Overview

Languages: English
Income tax: 20% – 45%
VAT: 20%; Reduced rates: 5%, 0%. 5% for domestic energy; 0% for most food, books, and children's clothing

Contributions

Employer

15%

Employer National Insurance (Class 1)On earnings above GBP 5,000/year (GBP 417/month) in 2026/27; eligible employers can claim a GBP 10,500 Employment Allowance

Workplace pension (auto-enrollment)Minimum employer contribution on qualifying earnings

0.5%

Apprenticeship LevyOnly for annual pay bills over GBP 3 million, with a GBP 15,000 allowance

15% – 18.5%

Total employer cost

Employee

Employee National Insurance (Class 1)On earnings from GBP 12,570 to GBP 50,270/year; 2% above that (2026/27)

Workplace pension (auto-enrollment)Minimum employee contribution on qualifying earnings, including tax relief; employees can opt out

7% – 13%

Total employee cost

Authority Payments

Authority PaymentPaid ToDue DateMethod

Authority Payment

HM Revenue & Customs (HMRC)

Paid To

PAYE income tax and employee and employer National Insurance

Due Date

22nd of the next tax month (19th if paying by post)

Method

Real Time Information (RTI) Full Payment Submission on or before each payday; electronic payment

Authority Payment

Workplace pension provider

Paid To

Employer and employee pension contributions

Due Date

By the 22nd of the month after deduction (19th by check)

Method

Payment to the scheme under the pension provider's schedule

Minimum Wage & Working Hours

Minimum wage: GBP 12.71 / Hourly; National Living Wage for ages 21+, from 1 April 2026. Ages 18–20: GBP 10.85; under 18 and apprentices: GBP 8.00
Standard working hours: Usually 37.5–40 hours per week; Average weekly hours may not exceed 48 over 17 weeks unless the employee opts out in writing
Overtime: No statutory overtime premium; pay is set by contract

Leave

Annual leave5.6 weeks (28 days for full-time staff)Employers can include bank holidays in this total
Sick leaveUp to 28 weeks of Statutory Sick PaySince 6 April 2026, SSP is paid from the first day of absence and the lower earnings limit no longer applies. GBP 123.25 per week, or 80% of average weekly earnings if lower; paid by the employer
Maternity leaveUp to 52 weeksStatutory Maternity Pay for 39 weeks: 90% of average earnings for 6 weeks, then GBP 194.32 or 90% if lower
Paternity leave1 or 2 weeksA day-one right since 6 April 2026. Statutory Paternity Pay of GBP 194.32 per week, or 90% of average earnings if lower, still needs 26 weeks of service and average earnings of at least GBP 129 per week
Parental leaveUp to 50 weeks of shared parental leaveUp to 37 weeks of Statutory Shared Parental Pay at GBP 194.32 per week, or 90% if lower. Separately, unpaid parental leave of up to 18 weeks per child became a day-one right on 6 April 2026
Public holidays8–10 bank holidays8 in England and Wales, 9 in Scotland, and 10 in Northern Ireland

Leave type	Duration	Notes
Annual leave	5.6 weeks (28 days for full-time staff)	Employers can include bank holidays in this total
Sick leave	Up to 28 weeks of Statutory Sick Pay	Since 6 April 2026, SSP is paid from the first day of absence and the lower earnings limit no longer applies. GBP 123.25 per week, or 80% of average weekly earnings if lower; paid by the employer
Maternity leave	Up to 52 weeks	Statutory Maternity Pay for 39 weeks: 90% of average earnings for 6 weeks, then GBP 194.32 or 90% if lower
Paternity leave	1 or 2 weeks	A day-one right since 6 April 2026. Statutory Paternity Pay of GBP 194.32 per week, or 90% of average earnings if lower, still needs 26 weeks of service and average earnings of at least GBP 129 per week
Parental leave	Up to 50 weeks of shared parental leave	Up to 37 weeks of Statutory Shared Parental Pay at GBP 194.32 per week, or 90% if lower. Separately, unpaid parental leave of up to 18 weeks per child became a day-one right on 6 April 2026
Public holidays	8–10 bank holidays	8 in England and Wales, 9 in Scotland, and 10 in Northern Ireland

Termination

Probation period: No statutory length; usually 3–6 months
Notice period: 1 week after 1 month of service, plus 1 week per full year of service, up to 12 weeks
Severance pay: Statutory redundancy pay after 2 years of service: 0.5–1.5 weeks' pay per year based on age, with weekly pay and years of service capped
13th salary: Not mandatory
Notes: Contracts often set longer notice than the statutory minimum

Benefits

Workplace pensionMandatory
Auto-enrollment for eligible workers, with minimum employer and employee contributions
Private medical insuranceCommon
A common taxable benefit
Enhanced parental payCommon
Top-ups above statutory pay are common

Visas & Work Permits

Skilled Worker visa
Duration
Up to 5 years, renewable
Requirements
Job offer from a Home Office–licensed sponsor at an eligible skill and salary level
Global Talent visa
Requirements
Endorsement as a leader or potential leader in an eligible field
No employer sponsorship needed
Global Business Mobility: Senior or Specialist Worker
Requirements
Transfer from an overseas group company with a qualifying salary

FAQ

Sources

Last updated: November 1, 2026

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