Employer of Record in the United Kingdom: what one employee really costs

Questions people ask before booking a demo

How much do statutory employer contributions add to a salary in the UK?

About 16% to 18%, almost all of it National Insurance. At this page's example of US$60,000, roughly GBP 44,800, the employer pays 15% National Insurance on everything above GBP 5,000 (about GBP 6,000), 3% pension on earnings between GBP 6,240 and GBP 50,270 (about GBP 1,160) and the 0.5% Apprenticeship Levy (about GBP 220): roughly GBP 7,300 a year, or 16.4%, before the provider's fee. The rate edges towards 18.5% as pay rises because National Insurance has no upper limit.

Is there a ceiling on employer National Insurance?

No. Employer Class 1 contributions run at 15% on all earnings above the GBP 5,000 secondary threshold with no upper earnings limit, so the employer's marginal cost on a GBP 120,000 salary is the same 15% as on GBP 40,000. Only the pension minimum stops growing, at GBP 50,270 of qualifying earnings, where the 3% employer contribution reaches about GBP 1,320 a year.

Why does an EOR charge the Apprenticeship Levy when my company would not?

The levy is 0.5% of the pay bill for employers, and groups of connected companies, whose UK pay bill exceeds GBP 3 million a year, with a single GBP 15,000 allowance per group. A large provider's UK entity is far above that line, so the 0.5% is a real cost it passes on. Employing directly through a small UK company keeps you under the threshold and out of the levy.

What changes for UK dismissals in 2027 and what does it cost?

From 1 January 2027 employees can claim ordinary unfair dismissal after six months of service instead of two years, and the cap on compensatory awards disappears. Until then, an employee needs two years of service to claim ordinary unfair dismissal, so budget a fair process and notice pay as the termination costs inside the first two years; afterwards, expect providers to insist on documented probation and performance processes, and price settlement risk on hires that run past six months.

Does the UK require a 13th salary, bonus or long paid leave?

No 13th salary or statutory bonus exists. Workers get 5.6 weeks of paid holiday a year, 28 days for a five-day week, and the eight bank holidays in England and Wales can be counted inside those 28 days. Statutory sick pay is due from the first day of illness since 6 April 2026. All of this is paid time inside the annual salary rather than an extra contribution.