Employing in the United Kingdom
In the UK, the National Living Wage has come into effect and this rate of pay applies to those aged 21 years and over. The National Minimum Wage rate applies to other age groups as set out below:
National Minimum Wage rates from 1 April 2025:
National Living Wage (21 and over): £12.21
18–20 Year Old Rate: £10.00
16–17 Year Old Rate: £7.55
Apprentice Rate: £7.55
Accommodation Offset: £10.66
In the UK, individual tax rates and thresholds vary depending on an employee’s salary and where in the UK they live and work. For example, in England and Northern Ireland, the standard employee personal allowance for the 2025 to 2026 tax year is:
£242 per week
£1,048 per month
£12,570 per year
PAYE Tax Rates (2025–2026):
The basic tax rate is 20%, which applies to annual earnings up to £37,700 (above the personal allowance).
The higher tax rate is 40%, which applies to annual earnings from £37,701 to £125,140.
The additional tax rate is 45%, which applies to annual earnings above £125,140.
The amount paid into an employee’s personal pension depends on the type of workplace pension scheme in place. However, the following are the minimum contribution rates based on a percentage of the employee’s salary:
Employer contribution: 3%
Employee contribution: 5%
Total minimum contribution: 8%
These minimums have been in effect since April 2019.
On average, a full-time working week ranges from 35 to 40 hours per week, Monday to Friday between 9am and 5pm. There are of course other industries with different working patterns, which can sometimes include weekends or unsociable hours.
Working hours in the UK are governed by the Working Time Regulations, which stipulate that an employee cannot work more than 48 hours per week on average, but an individual can choose to opt out of this.
Employee’s leave consists of several types:
- Statutory time off or paid leave, which is 5.6 weeks per year for full-time employees
- Public holidays (varies slightly between countries, but there are 8 bank holidays per year in England)
- Maternity, Paternity and Parental leave
- Sick leave
Termination of an employment contract in the UK is complex and is covered by several laws and any contractual obligations made at the time employment commenced.
Legally compliant dismissals come under the Employment Rights Act 1996 and can include:
- Misconduct
- Capability
- Redundancy
- Other legal or substantial reason
All dismissals require a minimum notice period to be given, which will either be the statutory minimum by law, or what was agreed in the employment contract, whichever is greater.
