What is an Employer of Record (EOR) in the UK?

An Employer of Record (EOR) in the UK is a third-party company that legally employs staff on behalf of another business. The EOR becomes the legal employer under UK law — handling employment contracts, PAYE payroll, National Insurance contributions, pension auto-enrolment, and compliance with the Employment Rights Act 1996 — while the client company retains full day-to-day control over the worker's tasks, performance, and priorities. EORs are used by companies that want to hire UK-based employees without setting up their own UK legal entity, or by international businesses that want to hire UK talent quickly without navigating HMRC registration themselves.

How much does an Employer of Record cost in the UK?

Employer of Record costs in the UK typically range from £350–£600 per employee per month for the EOR management fee, on top of the employee's gross salary, employer National Insurance contributions (15% on earnings above £5,000/year from April 2026), and any benefits costs. For example, hiring a UK employee on a £50,000 gross salary via an EOR costs approximately: £4,167/month salary + £575 employer NI + £125 employer pension (3%) + £400–£600 EOR fee = approximately £5,267–5,467/month total. Most EOR platforms — including Deel, Multiplier, and Remote — charge flat per-employee monthly fees rather than percentage-of-salary pricing.

How long does it take to hire a UK employee through an EOR?

Hiring a UK employee through an EOR typically takes 2–5 business days from initiating onboarding to the employee receiving a signed employment contract. The process involves: entering employee details and role information into the EOR platform (day 1), the EOR generating a UK-law compliant employment contract including written statement of particulars (required by law on or before day one of employment), the employee signing digitally, and the EOR registering the employee under their PAYE scheme. Standard countries like the UK are among the fastest to onboard — compared to 5–10 days for more complex jurisdictions.

Do I need to set up a UK company to hire employees in the UK?

No. You do not need to set up a UK legal entity to hire employees in the UK if you use an Employer of Record. The EOR uses its own UK entity to legally employ the worker, handles all HMRC registration, PAYE filings, Real Time Information (RTI) submissions, and employer National Insurance contributions on your behalf. Setting up your own UK entity via Companies House is the alternative — it is relatively streamlined (typically 1–4 weeks) but requires ongoing compliance: PAYE registration, RTI monthly submissions, corporation tax, pension auto-enrolment administration, and employment law adherence. For companies testing the UK market or hiring fewer than 5–10 employees, EOR is typically faster and more cost-effective than entity setup.

What are the employer National Insurance contribution rates in the UK for 2026?

For the 2026/27 tax year, UK employer National Insurance contributions (NICs) are 15% on employee earnings above the Secondary Threshold of £5,000 per year (£96 per week). This rate increased from 13.8% in previous years. Employer NICs apply to all employees regardless of age or salary level above the threshold. For a UK employee earning £50,000 gross, the employer NIC cost is approximately £6,750 per year (15% × £45,000 above the threshold). This is in addition to the employee's own NIC deductions. An EOR handles all NIC calculations and HMRC payments automatically as part of the payroll service.

Employer of Record UK: Complete Guide 2026

Last Updated on October 21, 2026 by ThriveOnz360 Editorial

Hiring · Employer of Record

Employer of Record, in plain English.

What an Employer of Record does, when it makes sense, and when you should set up your own entity instead.

Compare the costs

General information. Check the provider’s own pages for current prices.

The 30-second verdict

An EOR suits you if

You want to employ someone in a country where you have no company
You prefer to avoid running local payroll, tax and pension filings yourself
You want to test a market before committing to an entity

Set up your own entity if

You will hire many people there and want to own the relationship
You need the local company for contracts, banking or VAT
The role is genuinely independent contracting, not employment

Options

Three ways to hire abroad

Route	Best when
Contractor	The work is genuinely independent
Employer of Record	You need an employee without your own local entity
Your own entity	You will hire several people and want control

See our Deel, Multiplier and Oyster guides for dated prices and who should skip each.

What to do

How to decide

Decide whether the role is employment or genuine contracting (see our classification guide).
Compare an Employer of Record against your own entity for the first year, using real quotes.
Ask each provider what is included, who is the legal employer, and how termination is handled.
Run a small pilot hire before you commit more roles.

Avoid these

Mistakes to avoid

Treating an EOR as a way to avoid thinking about employment law
Comparing monthly fees without adding salary, employer taxes and local costs
Signing a long contract before a pilot hire

Questions

FAQs

Is an EOR the legal employer?

Yes. It employs the person locally and you direct the day-to-day work. Read the contract to see who handles termination.

Does an EOR replace a UK company?

No. If you sign UK contracts, hold UK client money or need UK VAT, you may need your own entity.

What does it cost?

Prices vary. Our calculator compares Deel fees only; other providers have their own pricing.

See what the routes cost for you

Open the calculator Classification guide

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ThriveOnz360 Editorial

Published by ThriveOnz Group UK Ltd, a company registered in England and Wales. Some links on this site are affiliate links and are always disclosed. General information, not legal, tax or financial advice. See our Editorial Standards.