EREditorial team · Updated 14 Oct 20267 min read14 providers compared20 sources
£3,855 employer cost a month on your own payroll, £40,000 salaryNot all-in: what it leaves out is under the cost table.
≈16% employer National Insurance and pension on top of salary
4 set-up steps before the first payroll
£12.71 National Living Wage an hour, age 21 and over
Before your own UK company pays anyone it needs employers' liability insurance, a right-to-work check, a workplace pension and a PAYE registration made no earlier than two months before the first payday. Employer National Insurance and the minimum pension add ≈16% to salary.
Short answer
Your company registers with HMRC for PAYE before the first payday, and no more than two months ahead of it.
Each pay run is reported to HMRC in a Full Payment Submission on or before payday, with a payslip for every employee.
The PAYE bill reaches HMRC by the 22nd of the next tax month for monthly payers, or the 19th if paying by cheque.
Employer National Insurance is 15% of pay above GBP 5,000 a year, before any Employment Allowance of up to GBP 10,500.
On this page
What comes before the first UK payroll
Four things come first, and only the HMRC registration has a window. Employers’ liability insurance is due as soon as you become an employer, with cover of at least GBP 5 million.[1] Each hire’s right to work in the UK is checked before they are employed.[2] PAYE registration has to be done before the first payday and cannot be made more than two months before it; it gives you the employer PAYE reference.[3]
Pension duties start the day the first employee does. Staff aged 22 to State Pension age who earn at least GBP 10,000 a year are enrolled,[4] and the employer pays at least 3% of earnings between GBP 6,240 and GBP 50,270.[5] The set-up steps table lists all four.
Running payroll month to month
Payday is the first deadline. On or before it, payroll software reports each employee’s pay and deductions to HMRC in a Full Payment Submission,[6] and each employee gets a payslip showing pay before and after deductions.[7] The money follows: the PAYE bill, covering the income tax deducted and Class 1 National Insurance, reaches HMRC by the 22nd of the next tax month.[8] At the end of the tax year, everyone on the payroll on 5 April gets a P60 by 31 May.[9]Payroll obligations lists each deadline, pension payments included.
The two employer lines in the cost table use different bases. Employer National Insurance is 15% of pay above GBP 5,000 a year, with no upper limit,[10] while the pension runs only on the band above. Statutory Sick Pay of up to GBP 123.25 a week for up to 28 weeks[11] sits outside the table. Providers that run payroll for a UK company are under payroll providers, and the EOR page covers employing without a company of your own.
Registering as an employer
With your own entity, these steps run one after another before the first payroll.
Required as soon as you become an employer, with cover of at least GBP 5 million from an authorised insurer; the certificate has to be displayed where employees can see it.
From the day the first employee starts (the duties start date), enrol staff aged 22 to State Pension age who earn at least GBP 10,000 a year and normally work in the UK, and pay at least 3% of qualifying earnings.
Employer registrations
PAYE employer registration with HMRC
Register before the first payday to get the employer PAYE reference.[3]
Running payroll: deadlines and filings
Payroll software works out the income tax and National Insurance to deduct from each employee's pay from their tax code and National Insurance category letter, and the employer pays them to HMRC with the PAYE bill.[6][8]
The employer must give every employee a payslip showing earnings before and after deductions, and variable deductions such as tax and National Insurance.
Pay the PAYE bill, which includes the income tax deducted and Class 1 National Insurance.
By the 22nd of the next tax month for monthly payers (the 19th if paying by cheque through the post); by the 22nd after the quarter for quarterly payers
Monthly cost of an employee on £40,000 a year, on your own payroll.
Assumes: Employee aged 22 or over on a permanent contract, earning at least GBP 10,000 a year and so auto-enrolled in a workplace pension at the legal minimum; no Employment Allowance claimed.
Total to employer, a month£3,855
Gross salary£3,33386%
Employer contributions£52214%
Percentages are shares of the total, not of salary.
Employer auto-enrolment pension (minimum, qualifying earnings)[5][4]
3%
84
Total to employer
3,855
Employer National Insurance is charged on pay above the secondary threshold of GBP 5,000 a year, with no upper limit, and is shown before any Employment Allowance, which lets an eligible employer take up to GBP 10,500 a year off its employer National Insurance (a company whose sole director is its only employee liable for it cannot claim). The pension line is the legal minimum, 3% of qualifying earnings between GBP 6,240 and GBP 50,270; many schemes pay more. The Apprenticeship Levy (0.5%) is left out because it applies only to a pay bill above GBP 3 million. Employer's liability insurance, sick pay and other costs are not rates and are not included.
Global payroll providers
All 14 global payroll providers we score: those working in United Kingdom first, then the rest, each by our global payroll score. Working in United Kingdom: 12 (2 by their global payroll coverage list, the rest inferred from their EOR coverage). How we score
Enterprise teams and small and growing businesses (SMEs), in RemotePass's own words
Not for
Buyers who must review EOR contract terms up front: no EOR agreement is public
Top pro
EOR from $349 per employee a month with tax included; 13 of 20 other EOR prices in dollars start higher
Top con
No EOR agreement is public: the Terms say EOR runs under a separate Consultant Agreement "available on the Site", which we did not find. The public legal documents are the Terms, the Privacy Policy and the Acceptable Use Policy
Companies from startups to enterprises, going by Multiplier's segment pages
Not for
Buyers who need the deposit amount before signing: Multiplier calculates it per contract
Top pro
Own SOC 2 (Type I and II), SOC 3 and ISO 27001:2022 on its security page; the AWS certifications listed there are kept apart as the host's
Top con
The "from" prices assume an annual contract. Monthly EOR costs $499 on Core and $559 on Growth, about 11% of countries are priced differently, and compliance-mandated add-ons come on top of EOR and COR
Companies from startups to enterprises: Playroll has pages for each, and its case studies include startups under 100 staff and mid-market firms of 100 to 1,000
Not for
Contractors who want to be paid other than through Payoneer, the only payout route Playroll uses
Top pro
Its own country pages document EOR hiring in 151 countries + 6 territories, against a claim of 180+
Top con
A refundable deposit of one month's salary per EOR employee; the unused part comes back within two months of the last working day, or once claims are settled if that is later
Startups, growing companies and enterprises, the three segments Pebl writes a page for
Not for
Buyers who need a Contractor of Record: we list Pebl for contractor management, not COR
Top pro
Own SOC 2 Type 2 report and ISO/IEC 27001:2022 certificate, both on Pebl's security page
Top con
No live support channel named: Pebl lists its Alfie AI assistant, in-house experts and a Help Center; its pages say 24/7 support and do not say who answers
Startups, scaling companies and enterprises, the three groups Native Teams writes for
Not for
Buyers who want to read the EOR or COR agreement before talking to sales: the terms of service are the only contract text online
Top pro
EOR from $99 per employee a month, below all 20 other per-employee EOR prices in USD we compare
Top con
The terms of service are the only contract text online. The EOR and COR agreements are not published, and the terms say a separate signed contract takes precedence
Small businesses, including teams under 10 employees, startups and enterprises: the segments Rippling has pages for
Not for
Buyers who want to compare an EOR price before a sales call
Top pro
Contractor onboarding in 185+ countries and payments in 50+ local currencies, per its contractor page; 160 countries + 2 territories are documented here
Top con
No price for EOR, contractor management or global payroll: the pricing page asks for a custom quote
Crypto and web3 teams paying contractors in stablecoins or crypto, a segment Rise names (startups, web3 startups, DAOs, global agencies)
Not for
Companies that need an EOR in countries beyond the US and the UK today
Top pro
Prices are published per head: $49 a contractor a month (discounts for startups and non-profits), $299 for Agent of Record, $399 an employee for EOR
Top con
EOR is documented in 2 countries (US, UK) against a claim of 90+. The parent, Rise Works, Inc., is on the GLEIF register; no own entity is documented in either country
4.2Our score 4.2 of 10Limited dataOur global payroll score
Global payroll price
Custom quote
ServicesEOR · Payouts · Contractors · Payroll
Best for
Startups, SMBs, agencies and enterprises: the segments Remozo names for its contractor product
Not for
Buyers whose security review asks for SOC 2 or ISO 27001 held by Remozo itself
Top pro
Contractor payouts claimed in 190+ countries; 98 are listed one by one in Remozo's help centre
Top con
Contractor plan from 3% per payout: for contractor payouts, 2 of the 6 other percentage prices we compare are lower and 1 the same. The contractor page says from 1.5%, which we do not score
One hire on £40,000 a year, through your own entity and through an EOR, from the figures on this page and the EOR page. The own-entity cost leaves out what running the entity costs, so the two columns are not like for like.
United Kingdom: own entity and EOR for one hire
Compared
Own entity
Employer of Record
Before the first hire
4 set-up and registration steps
No entity: the EOR’s entity employs
Employer cost a month, before any provider fee
£3,855
£3,855
Provider fee a month
–
US$99 to US$699 a month (18 providers, USD); €299 a month (one provider, EUR)
Fewer than 3 providers publish a fee in GBP, so no total with the fee is given; fees in other currencies are not converted.
Neither figure is all-in: both leave out the costs named under the cost table.
How early can I register as an employer with HMRC?
No more than two months before you start paying people. Registration has to be in place before the first payday, and it gives you the employer PAYE reference.
When does a UK employer have to enrol staff in a pension?
From the day the first employee starts. Staff aged 22 to State Pension age who earn at least GBP 10,000 a year and normally work in the UK are enrolled, and the employer pays at least 3% of qualifying earnings.
Can a small UK company reduce its employer National Insurance?
Often, through the Employment Allowance, which takes up to GBP 10,500 a year off employer National Insurance. A company whose sole director is its only employee liable for it cannot claim, and the cost table leaves the allowance out.
How much Statutory Sick Pay does a UK employer pay?
Up to GBP 123.25 a week, paid by the employer for up to 28 weeks.
Does every UK employer pay the Apprenticeship Levy?
No. The 0.5% levy applies only to an employer whose pay bill is above GBP 3 million, so the cost table leaves it out.
Works in United Kingdom
