EOR.net.au
Employing in the United Kingdom
The United Kingdom is a favourite expansion market for Australian technology, professional services and consumer brands. The legal system feels familiar, English is the business language and London gives you a base for European customers.
UK employment law is changing quickly. The Employment Rights Act 2025 is phasing in reforms, including a shorter qualifying period for unfair dismissal from January 2027, so contracts and policies drafted a few years ago may already be out of date. An EOR keeps your UK hires on compliant terms while the rules settle.
Why Australian businesses go there
- Familiar common law system and business culture
- Access to European customers and talent from London
- Strong pool of technology and finance talent
- The Youth Mobility Scheme lets Australians aged 18 to 35 work there
What to watch
- A written statement of particulars is required on or before day one
- Employer National Insurance is 15% above £5,000 a year
- Workplace pension auto-enrolment applies to eligible staff
- Unfair dismissal protection starts after 6 months of service from 1 January 2027
Hiring and contracts
- Employment contracts
- Employees and workers must be given a written statement of employment particulars no later than their first day. Most roles are permanent and full-time, and many terms sit in a staff handbook.
- Probation
- The law does not set a probation period, though 3 to 6 months is typical. Ordinary unfair dismissal claims currently need 2 years of service, a threshold the Employment Rights Act 2025 cuts to 6 months from 1 January 2027.
- Working hours
- Under the Working Time Regulations the average week is capped at 48 hours, unless the employee opts out in writing. Workers are owed 11 hours of rest each day and a 20 minute break on any shift longer than 6 hours.
- Minimum wage
- Since 1 April 2026 the National Living Wage has been £12.71 an hour for workers aged 21 and over. Younger workers and apprentices have lower rates.
Leave and holidays
- Annual leave
- Statutory paid leave is 5.6 weeks a year, or 28 days on a five-day week, and employers may include bank holidays in that total.
- Sick leave
- Employers pay Statutory Sick Pay. Since 6 April 2026 it starts on the first day of sickness, and the lower earnings limit no longer applies.
- Parental leave
- Maternity leave runs to 52 weeks, with Statutory Maternity Pay for up to 39 of them. From April 2026 paternity leave and unpaid parental leave are available from day one, and shared parental leave remains an option.
- Public holidays
- England and Wales have 8 bank holidays, Scotland 9 and Northern Ireland 10. Staff have no legal right to these days off in addition to the 5.6 weeks.
Employer costs
- Retirement and social security
- Employers pay Class 1 National Insurance at 15% on earnings over £5,000 a year. Pension auto-enrolment needs total minimum contributions of 8% of qualifying earnings, of which the employer must pay at least 3%.
- Payroll taxes
- Income tax and National Insurance come out of pay through PAYE, with real-time reporting to HMRC. Employers whose pay bill exceeds £3 million also pay the 0.5% Apprenticeship Levy.
- Mandatory benefits
- Compulsory items include employer's liability insurance, auto-enrolment into a workplace pension, Statutory Sick Pay and statutory pay for family leave.
Ending employment
- Notice periods
- An employer must give 1 week of notice once an employee has 1 month of service, then 1 week for each full year, up to a maximum of 12 weeks. Many contracts offer longer.
- Dismissal protection
- Ordinary unfair dismissal protection starts after 2 years of service, changing to 6 months from January 2027. Claims for discrimination or automatically unfair dismissal are available from the first day.
- Severance
- Statutory redundancy pay applies after 2 years of service. It is calculated from age, years of service (counting up to 20) and a capped weekly pay figure updated each April.
Contract terms and visas
- IP and restraint clauses
- Restrictions such as non-competes only hold up when they protect a legitimate interest and go no further than reasonably needed. IP an employee creates in their normal duties usually belongs to the employer.
- Visas and right to work
- Right to work checks must be completed before a job starts. Sponsored hires generally need a Skilled Worker visa, with the employer holding a sponsor licence. Australians aged 18 to 35 can apply through the Youth Mobility Scheme.
Compared with Australia
| United Kingdom | Australia | |
|---|---|---|
| Annual leave | Statutory paid leave is 5.6 weeks a year, or 28 days on a five-day week, and employers may include bank holidays in that total. | Full-time employees get 4 weeks of paid annual leave a year (5 weeks for some shift workers), built up progressively. Unused leave is paid out when employment ends, and many awards add 17.5% leave loading. |
| Sick leave | Employers pay Statutory Sick Pay. Since 6 April 2026 it starts on the first day of sickness, and the lower earnings limit no longer applies. | Full-time employees get 10 days of paid personal/carer's leave a year, plus 2 days of unpaid carer's leave and 2 days of paid compassionate leave per occasion. Every employee can also take 10 days of paid family and domestic violence leave a year. |
| Notice | An employer must give 1 week of notice once an employee has 1 month of service, then 1 week for each full year, up to a maximum of 12 weeks. Many contracts offer longer. | Under the National Employment Standards an employer gives 1 week of notice for up to 1 year of service, rising to 4 weeks for more than 5 years, plus an extra week for employees over 45 with at least 2 years of service. Pay in lieu is allowed, and awards set the notice employees must give. |
| Retirement and social security | Employers pay Class 1 National Insurance at 15% on earnings over £5,000 a year. Pension auto-enrolment needs total minimum contributions of 8% of qualifying earnings, of which the employer must pay at least 3%. | On top of wages, employers pay the Superannuation Guarantee at 12% of qualifying earnings. Payday Super has applied since 1 July 2026, so contributions go out with each pay and must arrive in the fund within 7 business days. Australia has no separate employer social security levy. |
| Dismissal protection | Ordinary unfair dismissal protection starts after 2 years of service, changing to 6 months from January 2027. Claims for discrimination or automatically unfair dismissal are available from the first day. | After the minimum employment period, employees can claim unfair dismissal if an award or agreement covers them or they earn under the high income threshold, $190,100 from 1 July 2026. Protection against adverse action under the general protections starts on day one, and small businesses may rely on the Small Business Fair Dismissal Code. |
Frequently asked questions
How much leave do UK employees get?
At least 5.6 weeks of paid leave a year, which is 28 days for a five-day week. Employers can count the 8 bank holidays in England and Wales towards it.
Do I need a sponsor licence to hire in the UK?
Only if the person needs a visa. Sponsored hires usually need a Skilled Worker visa, and the employer (or the EOR) must hold a sponsor licence. Many EORs cannot sponsor, so check first.
What is the 6-month change in 2027?
The Employment Rights Act 2025 reduces the qualifying period for ordinary unfair dismissal claims from 2 years to 6 months from 1 January 2027.
