Hiring and payroll in the United Kingdom
The United Kingdom, also called the UK or Britain, comprises England, Wales, Northern Ireland and Scotland. It is the sixth-largest economy in the world by Gross Domestic Product (GDP).
As a high-income economy with a high Human Development Index, The UK is an attractive destination for organizations planning to expand into new territories.
Because of the UK’s tech advancement, education and human development, the United Kingdom has a vast pool of highly skilled young professionals. As a result, the UK’s tech sector continues to outperform every other European country, generating a revenue of more than GBP 184 billion, according to this Tech Nation Report.
As one of the world’s flourishing tech countries, hiring a remote team in the United Kingdom is a major endeavor for many global organizations.
This article highlights everything you need to know about hiring and managing payroll in the United Kingdom.
Hiring employees in the United Kingdom
With 170 universities and higher education institutions, which include four of the world’s top ten universities, the UK is positioned to produce some of the finest tech talents in the world. In London alone, there are over 240,000 tech talents, which positions the country as an attractive destination to hire a remote team.
How to hire employees in the UK
To hire employees in the UK, one of the crucial steps is to place ads on popular job sites in the UK, such as Adzuna, CV-Library, Escape the city, Indeed UK, Monster UK, Otta, and many more. LinkedIn and Glassdoor are also valuable job platforms when hiring employees in the UK.
Hiring with an Employer of Record in the United Kingdom
An Employer of Record is a third-party platform that helps companies hire employees and contractors, onboard talent, manage an organization’s payroll and ensure compliance with country-specific employment laws and tax regulations.
The Employer of Record in the UK helps companies carry out employment-related activities in compliance with UK’s employment laws. Also, The Employer of Record in the UK enables global organizations to hire a remote team, onboard talent, manage payroll and ensure compliance with the UK’s laws without setting up subsidiaries.
Payroll in the United Kingdom
Payroll in the UK strictly follows UK’s employment and payroll laws. The United Kingdom’s employment laws regulate the payment processes, payroll for benefits, termination of employment, and more.
Ensuring compliance with the payroll laws in the UK is crucial. But it can be challenging for organizations in the UK.
However, managing a team in the UK requires choosing the most suitable means to handle payroll in the UK. Two of the most essential and common standards include
Paying employees via subsidiaries
To hire employees, organizations must also comply with the legal requirements for paying employees in the United Kingdom. One of the requirements is remitting taxes, statutory social contributions, and employee deductions. Employers can only make these payments by partnering with a subsidiary or local entity in the UK.
Managing Payroll in the UK with an Employer of Record platform
Setting up a local entity or a subsidiary in the UK is challenging, time-consuming, and resource-intensive. However, a local entity or subsidiary is crucial for organizations to manage their payroll in the UK effectively.
But with an Employer of Record platform, global organizations can pay their employees seamlessly without setting up a subsidiary in the UK. This becomes possible because the Employer of Record platform acts as the legal employer for the organization, handling all the requirements to manage payroll in the United Kingdom.
The Cost of Hiring an Employee in the UK
Organizations planning to hire a remote team in the UK must take note of the cost and resources it will require. Like every business pursuit, understanding the financial requirements is key to managing growth expectations and helps in efficient planning and structure of the organization.
Therefore, the cost required to hire an employee in the UK involves the following.
- The cost of business registration and subsidiary establishment
- Acquisition of a legal team
- The employment and payroll platform expenses
- Job boards ad placement costs
- Interviews and background checks expenses
Organizations planning to hire a remote team in the UK can do so at a cost-effective price by partnering with an Employer of Record platform like Skuad. Skuad is a global employment and payroll platform that handles the entire employment lifecycle of organizations in Britain by managing all employment-related activities and ensuring compliance with British employment laws.
An Employer of Record offers the best solution for organizations planning to hire a remote team or manage payroll in the UK. While expanding into a new country is challenging, an Employer of Record platform enables organizations to hire contractors and full-time employees, onboard talent, manage payroll, and ensure all employment-related activities comply with Britain’s employment laws.
Employer of Record platforms like Skuad ensures that organizations can build globally distributed teams quickly and without hassles. To know more about Skuad, book a demo today.