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A separate High Income Child Benefit Charge can apply as an additional 100% charge on the child benefit received, depending on the taxpayer's income level and circumstances. This is assessed alongside, not instead of, the main income tax bands.
Employment in United Kingdom
Minimum wage
GBP 24,960
Employer costs
15%
Employee contribution
2–8%
Employee tax
20–45%
In the United Kingdom, the reference minimum wage in this guide is an annual 24960 GBP. Employers typically face overall employment-related costs around a 15% headline level, mainly through National Insurance contributions and workplace pension contributions. Employees usually contribute in the 2–8% range for their own National Insurance and workplace pension. Income tax is progressive, with headline rates ranging from 20% to 45%, alongside a tax-free band at the bottom and higher rates for top earners and certain Scottish taxpayers.
Onboarding time
We can help you get a new employee started in United Kingdom fast. The minimum onboarding time we need is only 48 hours. Our team ensures fast, compliant employee onboarding and payroll processing. The onboarding timeline starts once the employee submits all required information via the NEO platform.
Payroll
UK payroll involves employer and employee National Insurance contributions alongside workplace pension contributions. Headline employer on-costs are around a 15% level, while employee contributions typically fall in the 2–8% range, depending on individual circumstances and scheme settings.
Employee payroll contributions
| Component | Notes |
|---|---|
| Workplace pension contribution | Employee pension contribution deducted via payroll |
| Nics contribution | Employee National Insurance contribution deducted via payroll |
Employer payroll contributions
| Component | Notes |
|---|---|
| Nics contribution | Employer National Insurance contribution |
| Apperentice Levy | Employer apprenticeship levy where applicable |
| Workplace contribution | Employer workplace pension contribution |
Taxes
The UK operates a progressive income tax system with headline rates between 20% and 45%, plus a tax-free band at lower incomes. Scotland applies its own set of bands and rates, and there is also a separate high-income child benefit charge that can apply in addition to income tax.
Main UK income tax bands
| Band | Tax rate |
|---|---|
| Up to 12,570 | 0% |
| 12,571 to 50,270 | 20% |
| 50,271 to 125,140 | 40% |
| Over 125,140 | 45% |
Scottish income tax bands
| Band | Tax rate |
|---|---|
| Up to 12,570 | 0% |
| 12,571 to 15,397 | 19% |
| 15,398 to 27,490 | 20% |
| 27,491 to 43,662 | 21% |
| 43,663 to 75,000 | 42% |
| 75,001 to 125,140 | 45% |
| Over 125,140 | 48% |
High Income Child Benefit Charge
Minimum wages
Reference minimum wage (annual)
24960 GBP
Working hours
Standard full-time working hours in the UK under this setup follow a Monday to Friday pattern. The total weekly hours define expectations for scheduling, overtime discussions, and workload planning.
Standard working hours
40 hours per week, Monday to Friday
Leave
UK employees under this framework receive a defined pool of paid time off each year, while sick leave is configured separately. Medical certification requirements differ between general paid time off and sick leave.
Annual paid time off entitlement
28 days per year (no carry-over specified)
Sick leave
Sick leave does not accrue a separate day balance in this configuration, but a medical certificate is required from the first day of sick leave. Unused sick leave is not carried over to the next year.
Public holidays
The UK public holiday calendar in this guide focuses on major nationwide bank holidays. Regional or additional holidays are not listed here.
Public holidays 2026
| Date | Holiday |
|---|---|
| 2026-01-01 | New Year's Day |
| 2026-04-03 | Good Friday |
| 2026-05-04 | May Day |
| 2026-05-25 | Spring Bank Holiday |
| 2026-12-25 | Christmas Day |
| 2026-12-28 | Boxing Day |
Expenses
In the UK, expenses must be submitted and approved in the same calendar year they are incurred, and reimbursements with proper documentation are generally tax-free. Missing documentation or using expenses for commuting or personal purposes can make them taxable, so it is important to match each claim to the correct business use and keep clear records.
Submission deadlines
| Expense Type | Action Required and Deadline |
|---|---|
| Current year's expenses | Submit and approve within the same calendar year |
| Prior year's expenses | Not accepted; must be submitted and approved in the year incurred |
Communication and workspace
Phone, internet, and coworking costs can be reimbursed when used for business purposes, but recurring services are treated as taxable benefits. Keep tax invoices or receipts showing the date, amount, currency, provider, and what was purchased or used.
| Expense | Taxation |
|---|---|
| Phone subscription | Business travel use non taxable; recurring services taxable |
| Internet subscription | Business travel hot spot and internet non taxable; recurring services taxable |
| Coworking | Business meeting use non taxable; recurring services taxable |
Equipment and supplies
Laptops, office equipment and supplies, software subscriptions, and postal charges can be reimbursed tax-free when properly documented. For remote workers, home-working equipment is taxable unless specific statutory conditions are met, so employers should check whether those conditions apply before treating reimbursements as non taxable.
| Expense | Taxation |
|---|---|
| Laptop | Non taxable; home-working equipment for remote workers taxable unless ITEPA 2003 s316 conditions are met |
| Office equipment | Non taxable |
| Office supplies | Non taxable |
| Software subscription | Non taxable |
| Postal charges | Non taxable |
Travel
Most genuine business travel costs, including insurance, visas, accommodation, flights, car rental, fuel for business mileage, and parking or tolls, are non taxable when supported by appropriate evidence. Car leasing is treated differently and is taxable as an allowance, while commuting to a regular workplace makes some transport costs taxable even if they are otherwise business-related categories.
| Expense | Taxation |
|---|---|
| Business travel insurance | Non taxable |
| Visa fee | Non taxable |
| Accommodation | Non taxable |
| Flight (including luggage) | Non taxable |
| Taxi or rideshare | Business travel non taxable; commuting to a co-working or office taxable |
| Train | Business travel non taxable; commuting to a co-working or office taxable |
| Public transport | Non taxable |
| Car rental | Non taxable |
| Car leasing | Taxable; reclassified as an allowance |
| Mileage | Non taxable at £0.45/mile for first 10,000 miles; £0.25/mile thereafter |
| Fuel | Non taxable; company car users must use HMRC Advisory Fuel Rates |
| Parking or toll fees | Non taxable |
Meals and entertainment
Meals and client entertainment can often be reimbursed tax-free when they are clearly for business purposes and backed by proper receipts. Groceries are only non taxable when linked to business travel; other uses are treated as taxable.
| Expense | Taxation |
|---|---|
| Breakfast, lunch and dinner | Non taxable |
| Groceries | Business travel non taxable; other uses taxable |
| Meal with client or partner | Non taxable |
Other expenses
Training, courses, books, and promotional items can be reimbursed on a non taxable basis when they are genuinely for business and supported by standard transaction documents. Claims should clearly show what was purchased, from whom, and for which employee where relevant.
| Expense | Taxation |
|---|---|
| Training, courses, and books | Non taxable |
| Promotional items | Non taxable |
Fuel and mileage reimbursement
Fuel and mileage reimbursement rules depend on whether the employee uses a company car, a rental car, or their own vehicle. Company car users must follow HMRC Advisory Fuel Rates, rental car users can expense all fuel for the trip, and employees using their own car must claim mileage only, without separate fuel claims.
How to claim by vehicle type
| Vehicle type | How to claim | Details |
|---|---|---|
| Company car | Fuel | Claim fuel using HMRC Advisory Fuel Rates |
| Rental car | Fuel | Expense all fuel costs incurred during the business trip |
| Own car | Mileage | Claim mileage at the applicable rate; do not claim fuel separately |
HMRC Advisory Fuel Rates (December 2025 – February 2026)
| Fuel type | Engine size / charging | Rate |
|---|---|---|
| Petrol | Up to 1,400 cc | £0.12 per mile |
| Petrol | 1,401 to 2,000 cc | £0.14 per mile |
| Petrol | Over 2,000 cc | £0.22 per mile |
| LPG | Up to 1,400 cc | £0.11 per mile |
| LPG | 1,401 to 2,000 cc | £0.13 per mile |
| LPG | Over 2,000 cc | £0.21 per mile |
| Diesel | Up to 1,400 cc | £0.12 per mile |
| Diesel | 1,401 to 2,000 cc | £0.13 per mile |
| Diesel | Over 2,000 cc | £0.18 per mile |
| Electric | Home charger | £0.07 per mile |
| Electric | Public charger | £0.14 per mile |
Per diem
Per diems are not available in the UK under this framework. Employees should instead submit actual business trip expenses with supporting invoices and receipts for reimbursement.
Bonuses
Bonuses, including contractual and discretionary payments, incentives, and commissions, are taxed as regular income and attract the usual social security contributions. Because of the Pay-As-You-Earn system, the withholding in any pay period that includes a bonus may be higher than in periods without one.
Allowances
In the UK, employers can offer a range of discretionary allowances such as work-from-home support, car-related benefits, insurance, wellness, and other perks. All of these are treated as taxable income, and on this platform any gross-up must be requested separately by support, specifying the net amount the employee should receive.
| Type | Status | Taxation | Limitations |
|---|---|---|---|
| Work From Home Allowance | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Car Leasing | Optional | Taxable | May be offered to one or more employees at the employer's discretion; remains available throughout maternity leave |
| Gym Membership | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Medical Insurance | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Life Insurance | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Wellness | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Medical Cost | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Relocation | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
| Utilities | Optional | Taxable | May be offered to one or more employees at the employer's discretion |
Termination
UK terminations under this framework must respect minimum notice and any agreed probationary arrangements. Employers should ensure contracts clearly set out both the initial notice period and the length of probation, within the ranges below.
Minimum notice period after probation
7 days
Maximum probation period
180 days
