How to Hire Employees in the UK Without a UK Company: A Step-by-Step Playbook

You can hire employees in the UK without a UK company. The main routes are an employer of record, registering your overseas company with HMRC to run UK payroll, or engaging genuine contractors. Whichever you choose, someone must cover the employer duties: right to work checks, a day-one contract, PAYE, a workplace pension and employer National Insurance.

What are your options for hiring in the UK without a UK company?

There are four routes. Three of them don’t need a UK company.

Route	Who is the employer?	UK company needed?	Best for
Employer of record	The EOR	No	First hires, speed, low admin
Overseas employer running UK payroll	Your overseas company	No	Businesses ready to run UK payroll and compliance themselves
Contractors	Nobody, if genuinely self-employed	No	Genuine, independent project work
UK subsidiary	Your UK company	Yes	Longer-term, larger UK teams

Option 1: Use an employer of record

The EOR employs the person under a UK contract and handles payroll, tax, pension and insurance. You direct the work. This is the most common route for an overseas business’s first UK hires. See our UK employer of record service.

Option 2: Register your overseas company as the employer

An overseas company can employ UK staff directly. HMRC’s guidance on globally mobile employees and PAYE says that, because of a territorial limit, an employer without a UK presence isn’t required to operate PAYE, but “you can choose to voluntarily operate PAYE”.

HMRC’s PAYE Manual explains that a UK branch, agency or representative office counts as a presence, but having employees in the UK, including staff working from home, doesn’t on its own (PAYE81610). If you have no presence and the employee works for a UK business, that UK business may have to operate PAYE instead, unless you do so voluntarily.

This route gives you control, but you take on every employer duty below yourself, from a distance, and you’ll need to register with HMRC before your first payday. GOV.UK says you can’t register as an employer more than two months before you start paying people. The National Insurance position for overseas employers can be complex, so speak to HMRC or a payroll adviser before you start.

Option 3: Engage contractors

If the work is genuinely independent, a contractor may be right. But employment status depends on how the relationship works in practice: control, whether the person must do the work personally, and whether they’re integrated into your business. If someone works like an employee, calling them a contractor doesn’t change that. Where contractors work through their own limited company, the off-payroll working (IR35) rules may also apply.

Option 4: Set up a UK company

This makes your UK company the employer. It’s the right long-term answer for many businesses, but it involves incorporation, HMRC registration, insurance, banking and annual filings. We compare it in EOR vs setting up a UK entity.

What are the steps to hire your first UK employee?

Whichever employer route you take (options 1, 2 or 4), these steps apply. With an EOR, the EOR does them.

Step 1: Check the person’s right to work

GOV.UK says: “You must check that a job applicant is allowed to work for you in the UK before you employ them” (check a job applicant’s right to work). You can check online with a share code, check original documents in person, or use an identity service provider. British and Irish citizens can’t get a share code, so their check uses documents or an identity service provider.

If you employ someone without the right to work and haven’t done a correct check, you could face a civil penalty. Our guide to right to work checks covers the process in detail.

Step 2: Issue a written contract from day one

Employees and workers are entitled to a written statement of their main terms. GOV.UK says the principal statement must be given “on the first day of employment”, and the wider written statement within two months (written statement of employment particulars). Most employers issue a full employment contract on or before day one that covers both.

For overseas employers, make sure the contract also covers confidentiality and intellectual property, so work the employee creates belongs to your business.

Step 3: Set up payroll

The employer must:

• Register a PAYE scheme with HMRC before the first payday
• Collect the employee’s details (starter checklist or P45 from a previous job)
• Deduct income tax and employee National Insurance each payday
• Report each payment to HMRC on or before payday under Real Time Information
• Pay HMRC the tax and National Insurance due
• Give the employee a payslip

Step 4: Enrol the employee into a workplace pension

Every employer has automatic enrolment duties. For 2026/27, The Pensions Regulator’s earnings thresholds are:

• Earnings trigger for automatic enrolment: £10,000 a year
• Qualifying earnings band: £6,240 to £50,270

Minimum contributions are 8% of qualifying earnings in total, of which at least 3% must come from the employer.

Step 5: Pay employer National Insurance

For 2026/27, employer Class 1 National Insurance is 15% on earnings above the secondary threshold of £5,000 a year (£417 a month), for standard category letters such as A (rates and thresholds for employers 2026 to 2027). There’s no upper limit for employer NI.

Some employers can claim the Employment Allowance, worth up to £10,500 in 2026/27, to reduce their employer NI bill. Eligibility rules apply, so check them before you count on it.

Step 6: Get employers’ liability insurance

Most employers in Great Britain must have employers’ liability insurance of at least £5 million from the day they take on staff (employers’ liability insurance). With an EOR, this is the EOR’s policy.

Step 7: Keep on top of ongoing duties

Statutory sick pay, holiday pay, maternity and paternity pay, pension re-enrolment, year-end reporting and leavers all need handling as they arise.

What does a £45,000 hire really cost?

Here’s a worked example for an employee on a £45,000 salary in 2026/27, using the minimum legal on-costs.

Employer National Insurance

• Salary above the secondary threshold: £45,000 − £5,000 = £40,000
• Employer NI at 15%: £40,000 × 15% = £6,000

Employer pension contribution (minimum)

• Qualifying earnings: £45,000 − £6,240 = £38,760 (the salary is below the £50,270 upper limit, so the full amount above £6,240 counts)
• Employer contribution at 3%: £38,760 × 3% = £1,162.80

Summary

Item	Annual amount
Gross salary	£45,000.00
Employer National Insurance	£6,000.00
Employer pension (3% of qualifying earnings)	£1,162.80
Total minimum employment cost	£52,162.80

So the statutory on-costs add £7,162.80 a year, about 15.9% on top of salary. That’s before employers’ liability insurance, any benefits you offer, a higher pension contribution if you choose one, and EOR or payroll provider fees. It also assumes the employer isn’t claiming the Employment Allowance.

To run the numbers for a different salary, use our employer cost calculator.

Which route should you choose?

• One or a few hires, needed soon: an employer of record.
• Ready to run UK payroll and compliance from overseas: register your company as the employer, with HMRC’s guidance and a UK payroll provider.
• Genuinely independent project work: contractors, with a proper status assessment.
• A long-term UK team: a UK company, possibly starting with an EOR while you set it up.

If you’d like your first UK employees working without setting up a company, our UK employer of record service covers every step above, from the right to work check to the first payslip.