Employment contract
Give every employee and worker the principal written statement on day one, covering parties, role, start date, pay, hours and variation, holiday, place, duration, probation, benefits and mandatory training, with pension, collective-agreement, training and grievance/disciplinary information within two months. The statement is not itself the whole contract: working practice, policies, collective terms and implied terms can still bind, and changes normally need written notification within one month.
Probation
There is no universal statutory probation period or dismissal-at-will rule. Put duration, review points, extension, notice and benefit treatment in the contract and apply them consistently. Through 31 December 2026, ordinary unfair-dismissal protection usually still needs two years’ service, while discrimination, whistleblowing, health-and-safety and other automatically unfair grounds can apply from day one. From 1 January 2027 the ordinary qualifying period falls to six months, so a customary three-to-six-month probation is not a liability-free window.
Hours, rest & overtime
Most workers must not exceed an average 48-hour week over the normal 17-week reference period. An adult may voluntarily opt out in writing and later cancel it; under-18 limits cannot be averaged this way. A workday over six hours normally carries one uninterrupted 20-minute break plus daily and weekly rest; night work, transport, on-call time and multiple jobs need separate checks. There is no universal overtime premium, but average hourly pay must not fall below minimum wage and contractual or collective premiums remain payable.
Minimum wage by region
From 1 April 2026 the hourly minimum is £12.71 for age 21+, £10.85 for ages 18–20 and £8.00 above school-leaving age but under 18; apprentices under 19 or aged 19+ in their first apprenticeship year also receive £8.00. Test each pay reference period using actual payable hours and permitted components. Tips, future bonuses, reimbursements or salary-sacrifice presentation cannot cure an underpayment; recheck every April.
Salary & talent supply
Minimum wage, immigration thresholds and an internal budget are not market offers. Benchmark by London/region, job family, level, sector, remote scope, fixed cash, bonus and equity using dated samples. Cross-check ONS earnings statistics, Find a job and live vacancies and retain sample size and percentile. Never present a UK-wide average, one recruitment platform number or a Skilled Worker threshold as the role median.
Payroll, payslip & payment
Register for PAYE where required and collect the starter declaration, tax code, NI category and pension data before first payroll. Give a payslip showing gross pay, deductions and net pay on or before payday and send the FPS to HMRC on or before that payday. Submit any EPS by the following tax month’s 19th and normally pay electronically by the 22nd. Issue P45 on exit; handle final FPS, P60, benefits/P11D and retention at year end, without masking late reporting by backdating payday.
PIT withholding & social insurance
For 2026/27, a typical category A employee pays NI at 8% on monthly earnings from £1,048 to £4,189 and 2% above; employer NI is generally 15% above £417/month (£5,000/year), but age, apprentice, veteran, Freeport and Investment Zone categories can change thresholds. Auto-enrolment normally covers a worker aged 22 to State Pension age, earning at least £10,000/year and ordinarily working in the UK; qualifying-earnings minimum contributions total 8%, including at least 3% employer. PAYE, NI and pension bases differ and cannot be collapsed into one percentage.
Employer-cost calculator scope
The current calculator is a UK monthly budget approximation: it models standard-category employer NI at 15%, the main 8% employee NI band, approximate 3% employer/5% employee pension on qualifying earnings and basic England/Wales/Northern Ireland PAYE bands. It does not fully model the 2% employee NI upper band, Scottish tax, tax codes or tapered allowance, director annual method, Employment Allowance, special NI categories, pension postponement/opt-out, salary sacrifice, benefits, statutory-pay recovery or Apprenticeship Levy. It is not an HMRC or pension filing result.
Annual leave
Most workers receive 5.6 weeks’ paid annual leave per full leave year—normally 28 days for a five-day week, capped at 28 days—and bank holidays may be included rather than additional. Regular-hours workers receive at least four weeks at normal pay including qualifying commission and regular overtime, with 1.6 weeks at basic pay; irregular-hours and part-year workers follow the current accrual and permitted rolled-up-pay rules. From 6 April 2026, keep detailed annual-leave and holiday-pay records for at least six years.
Public holidays & overtime
Bank-holiday dates differ across the UK and the law does not automatically grant paid bank holidays or a universal premium for working them. A contract may include them within the 5.6 weeks or provide them in addition. Maintain the calendar for the actual work location—England and Wales, Scotland or Northern Ireland—and define closure, rota, substitute-day, part-time fairness and pay rules rather than copying a London calendar across the UK.
Family & medical leave
Eligible employees can take up to 52 weeks’ maternity leave. SMP is normally 90% of average weekly earnings for six weeks, then the lower of £194.32 or 90%; 2026/27 paternity, adoption, shared-parental, parental-bereavement and neonatal-care pay commonly use the same £194.32-or-90% baseline. From 6 April 2026, paternity and unpaid parental leave are day-one leave rights. SSP starts on the first sickness day with no lower-earnings threshold, at the lower of £123.25/week or 80% of average weekly earnings. Check leave eligibility, pay eligibility, notice and recovery separately.
Statutory & market benefits
Minimum wage, statutory leave/pay, PAYE/NI, auto-enrolment, working-time protection, safety and employers’ liability insurance are not optional benefits. There is no universal statutory 13th-month salary. Bonus, private medical, life cover, equity, meals and enhanced leave may become payable through contract, policy, collective agreement or established practice. Design benefits separately for tax, salary sacrifice, discrimination, part-time/fixed-term parity and immigration salary rules.
Termination & disputes
Distinguish resignation, capability/conduct dismissal, redundancy, automatic unfairness, discrimination and collective redundancy, and follow fair reason, investigation, hearing, appeal and the ACAS process. Ordinary unfair dismissal normally still needs two years’ service through 31 December 2026, falling to six months from 1 January 2027. Statutory notice is normally one week after one month’s service, then one week per completed year from year two, capped at 12 weeks. Eligible redundancy after two years uses age and up to 20 service years; from 6 April 2026 weekly pay is capped at £751 and the maximum is £22,530, while the collective-redundancy protective-award cap has doubled. More consequentially, the same 1 January 2027 package also removes section 124 of the 1996 Act in full, so the compensatory-award cap — currently the lower of £123,543 or 52 weeks’ gross pay from 6 April 2026 — disappears and ordinary unfair-dismissal exposure becomes uncapped; the qualifying period for written reasons for dismissal drops to six months too, and the qualifying period for dismissal relating to spent convictions is removed. Transition runs on the effective date of termination: the new rules apply where that date falls on or after 1 January 2027, and the old two-year rule still applies where it falls before. An earlier step lands sooner still, on 1 October 2026: the employment tribunal claim time limit rises from three months to six (England and Wales; breach-of-contract claims in Scotland from 9 November 2026), doubling the employer’s dispute exposure window, so evidence and document retention periods must lengthen to match.
Contractor classification
Employee, worker, self-employed contractor, agency worker and office holder are not one status, and employment-rights status is distinct from tax status. Test genuine substitution, control, mutuality, integration, tools and financial risk; a “consultant” label or personal company does not automatically remove worker rights. For tax, apply CEST/IR35 separately. Public bodies and medium/large private clients normally make a reasonably careful Status Determination Statement and handle disputes. Misclassification can create PAYE/NI, minimum-wage, holiday-pay and pension arrears.
Foreign workers
Companies House registration, directorship/shareholding, an ETA/visit route or an offer does not create work rights. Before work starts, complete the prescribed online, document or Employer Checking Service right-to-work check for the actual role, retain evidence and schedule follow-up for time-limited permission. Apply checks consistently to all candidates, not only people who appear foreign. Where sponsorship is needed, employer, occupation code, salary, hours and location must match the A2 route and sponsor licence.
Recruiting channels
Test supply through government Find a job, apprenticeships and role-specific specialist channels, then optimise by source cost, qualified rate, interview rate, offer acceptance and 90-day retention; do not call one platform universally “best.” Ask only job-necessary questions and not protected matters such as marriage or family plans. Health/disability questions require a lawful exception and reasonable adjustments. Scale DBS, qualification, reference, data-retention and agency checks to risk and consent.
Retirement age
The UK has no default compulsory retirement age of 65 and most people may work beyond State Pension age; pension eligibility is separate from ending employment. An employer-set compulsory retirement age needs objective justification through a legitimate aim and proportionate means, with separate rules for occupations that have a statutory age. Do not terminate payroll automatically on a birthday: assess performance, capability, safety, reasonable adjustments and age discrimination.
Employment compliance calendar
At each hire: role/status, market pay, non-discrimination, right to work, DBS/qualifications, day-one statement, PAYE and pension assessment. Each payday: payslip, minimum wage, time, holiday, statutory pay, FPS, NI/PAYE and pension; handle EPS/payment by the following 19th/22nd. At change/exit: written update, immigration recheck, fair process, notice, holiday, P45 and redundancy duties. Each April review wage, tax/NI, statutory-pay and tribunal limits. Implement the 1 October 2026, 30 October 2026 and 1 January 2027 tribunal, harassment/union and six-month unfair-dismissal changes with owner, deadline, evidence and recovery logged.