Employee Leasing in the United Kingdom

Content:

• Advantages of Employee Leasing in the United Kingdom
• Employee Leasing Services Offered by FMC Group
• Advantages of the British Market
• Recruitment in the United Kingdom
  • Minimum Wage and Payroll
  • Social Contributions and Taxes
  • Working Hours and Overtime
  • Vacation Days
  • Parental Leave and Sick leave
  • Notice Period

• Employee leasing provides businesses with tremendous flexibility when expanding into a new market, allowing them to measure their potential as things progress.
• Employee leasing in the United Kingdom allows companies to fully benefit from the quality of the British labor force while reducing expansion costs and risks.
• Employee leasing helps businesses focus on their growth strategy without worrying about the administrative management of their employees, as it is fully handled by FMC Group.

• Preselection of candidates based on the client’s needs;
• Conduction of the recruitment process with the best candidates;
• Negotiation of employment contracts;
• Payment of taxes and social contributions according to local laws;
• Management of the payroll according to international standards;
• Monitoring paid vacations;
• Implementation of private health insurance if needed;
• Maintaining constant communication with clients regarding the management of their employees.

• The United Kingdom is one of the leading business locations in the world. It is the sixth largest economy worldwide, with a GDP of over USD 2.6 trillion. The British economy is also extremely diverse, with investment opportunities available in various sectors, ranging from information and communication technologies to aerospace and automotive engineering.
• With a population of over 67 million, the United Kingdom represents a major market in its own right. However, it is also a gateway to many other markets thanks to its over 35 different trade agreements signed with countries in Europe and beyond.
• Since Brexit, the British government has been highly focused on creating attractive conditions for businesses and investors. The country aims to create the most competitive tax system in the G20. This has allowed the United Kingdom to build a transparent and fair tax system that offers many incentives and has a highly-competitive corporate tax rate of only 19%.
• The United Kingdom is known for the quality of its labor force. The British talent pool counts more than 32 million individuals and its size is expected to grow even further over the next 15 years as the country is actively looking to attract young foreign talent. One factor that contributes to the quality of the British labor force is the reputation of the country’s universities. The United Kingdom is home to some of the world’s most prestigious higher education institutions that attract the brightest students from all around the globe.
• The United Kingdom has a highly reliable infrastructure, both in terms of logistics and telecommunications. The United Kingdom counts over 70 airports, 40 major seaports, and extensive rail and motorway networks, making the country well-connected to Europe and the rest of the world. British digital infrastructure is also known for being reliable, as the country has one of the fastest and most stable broadband internet services in Europe.
• The United Kingdom’s Investment Promotion Agency offers detailed guides on the best investment opportunities in the country and the strengths of each region.

Minimum Wage and Payroll

• The national minimum wage in the United Kingdom varies according to the age of employees.
• For employees aged 18 to 20, the minimum wage is GBP 6.83 per hour.
• For employees aged 21 and 22, the hourly minimum wage is set at GBP 9.18.
• For employees who are 23 or older, the minimum wage is GBP 9.50 per hour.
• The payroll cycle in the United Kingdom is usually monthly, with wages paid between the 25^th and 30^th day of each month.

Social Contributions and Taxes*

Employer Contributions
National Insurance	15.05%
Pension Contribution	3.00%
Total	18.05%
Employee Contributions
National Insurance	13.25% – 16.50%
Pension Contribution	5.00%
Total	18.25% – 21.50%
Employee Income Tax
Up to GBP 12,570 per year	0.00%
Between GBP 12,571 and GBP 37,700	20.00%
Between GBP 37,700 and GBP 150,000	40.00%
More than GBP 150,001	45.00%

* Some categories of employees have slightly different social contribution rates, such as widows, senior employees over 66 years old, young employees under 21 years old, and young apprentices under 25 years old.

Working Hours and Overtime

• Working hours in the United Kingdom cannot exceed 40 hours per week.
• Work performed over the standard working period has to be paid at a higher rate than the regular salary, but the rate is not defined by the law. It is usually regulated by employment contracts or collective agreements.
• Overtime work cannot exceed an average of eight hours per week for a period of 17 consecutive weeks.

Vacation Days

• Employees in the United Kingdom are entitled to at least 28 days of paid leave per year.
• England, Wales, and Scotland celebrate eight public holidays, while Northern Ireland celebrates 10 public holidays:
  • New Year’s Day: January 1^st
  • Patrick’s Day: March 17^th (Northern Ireland only)
  • Good Friday: Between March and April (moveable)
  • Easter Monday: Between March and April (moveable)
  • Early May Holiday: First Monday in May
  • Spring Bank Holiday: Last Monday in May
  • Orangeman’s Day: July 12^th (Northern Ireland only)
  • Late Summer Holiday: Last Monday in August
  • Christmas Day: December 25^th
  • Boxing Day: December 26^th

Parental Leave and Sick Leave

• Female employees in the United Kingdom are entitled to 52 weeks of maternity leave. During the leave, employees receive a weekly stipend that equals 90% of their regular wage during the first six weeks and a fixed stipend of GBP 156 for the following 33 weeks.
• New fathers are entitled to two weeks of paid paternity leave directly after their child is born. They receive a weekly stipend of GBP 156 from social security during this period.
• Parents in the United Kingdom are entitled to a shared parental leave of up to 50 weeks when adopting a child or following the birth of a child. The shared parental leave can be taken within the first year of the child’s adoption or birth.
• Employees in the United Kingdom can take up to 28 weeks of sick leave. The first three days of sick leave are unpaid. Afterward, employees receive a weekly stipend of at least GBP 99 until they can return to work.

Notice Period

• The minimum notice period for employees wishing to resign varies depending on their seniority.
• If the employee has been working for the same employer for between two months and two years, they have to give a one-week notice.
• Between two and 12 years of service, the minimum notice period is extended by one week for each year of seniority.
• After 12 years of service, the minimum notice period is capped at 12 weeks.

Further Useful Information

• The United Kingdom’s Department for Work and Pensions is responsible for regulating the relationship between employers and employees and provides further useful information on its website.