Employment in the United Kingdom is built on statute such as the Employment Rights Act 1996 and the Working Time Regulations, and is being reshaped by the Employment Rights Act 2025, which is phasing in new rights through 2026 and 2027. Here is what employers need to know about leave, pay, tax and ending employment.
Almost all workers are entitled to paid holiday from their first day. Family leave rights are generous in length, but statutory pay is modest, so many employers top it up with enhanced contractual pay.
28 days for someone working 5 days a week, capped at 28 days. Employers can count bank holidays as part of it. Pro-rata for part-time workers.
From 6 April 2026 SSP is paid from the first day of sickness, for up to 28 weeks, at £123.25 or 80% of average weekly earnings if that is lower.
Up to 39 weeks of Statutory Maternity Pay: 90% of average weekly earnings for 6 weeks, then £194.32 a week (or 90% if lower) for 33 weeks.
A day-one right since 6 April 2026. Statutory Paternity Pay of £194.32 a week (or 90% if lower) still needs 26 weeks' service.
Parents can convert untaken maternity or adoption leave into Shared Parental Leave: up to 50 weeks of leave and 37 weeks of pay, split between them. Separately, each parent can take up to 18 weeks of unpaid parental leave per child before the child's 18th birthday, now also a day-one right.
Set up each UK leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata holiday for part-time staff. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Minimum wage rates are set by age and are reviewed every year on the advice of the Low Pay Commission, with new rates taking effect on 1 April.
| Worker | Minimum hourly rate |
|---|---|
| National Living Wage (21 and over) | £12.71 |
| 18 to 20 | £10.85 |
| Under 18 | £8.00 |
| Apprentice | £8.00 |
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime and minimum wage checks reflect what was actually worked. Time & attendance →
Employers deduct income tax and employee National Insurance through PAYE and report every payment to HMRC in real time (RTI) on or before payday. The tax year runs from 6 April to 5 April.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Scotland sets its own bands and rates for earnings. Scottish taxpayers (broadly, people who live in Scotland) have a tax code starting with S, and employers apply these bands instead.
| Band | Income | Rate |
|---|---|---|
| Starter rate | £12,571 – £16,537 | 19% |
| Basic rate | £16,538 – £29,526 | 20% |
| Intermediate rate | £29,527 – £43,662 | 21% |
| Higher rate | £43,663 – £75,000 | 42% |
| Advanced rate | £75,001 – £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Employee Class 1 National Insurance is 8% on earnings between £12,570 and £50,270 a year and 2% above that, across the whole UK. Wales has its own Welsh rates of income tax, which currently match the England and Northern Ireland rates.
On top of gross salary, employers pay National Insurance, workplace pension contributions and, for large employers, the Apprenticeship Levy.
On earnings above the secondary threshold of £5,000 a year. Many employers can claim the Employment Allowance of up to £10,500 a year against their bill.
Of qualifying earnings under auto-enrolment, within a total minimum of 8%. Eligible jobholders must be enrolled automatically.
Of the annual pay bill, only for employers whose pay bill is over £3 million, after a £15,000 allowance.
Employers pay no Class 1 NICs up to £50,270 a year on the earnings of employees under 21 and apprentices under 25. Taxable benefits such as company cars and private medical insurance attract Class 1A National Insurance at 15%.
Build UK pay the way you already structure it, with your own salary components, deductions and formula columns, such as a pension contribution column. Want to know how well IceHrm handles payroll calculations for the United Kingdom? Contact us or see Payroll →
Employment in the UK is not "at will". Employees with enough service are protected from unfair dismissal, so a dismissal needs a fair reason and a fair procedure. The qualifying period is currently 2 years; under the Employment Rights Act 2025 it falls to 6 months from 1 January 2027, and the cap on unfair dismissal compensation is being removed.
| Continuous service | Notice |
|---|---|
| 1 month, less than 2 years | 1 week |
| 2 years, less than 12 years | 1 week per full year |
| 12 years or more | 12 weeks |
Employees with at least 2 years' service who are made redundant are entitled to statutory redundancy pay, based on age, length of service (up to 20 years) and weekly pay, capped at £751 a week from 6 April 2026.
| Age during each year of service | Redundancy pay |
|---|---|
| Under 22 | Half a week's pay |
| 22 to 40 | 1 week's pay |
| 41 and over | 1.5 weeks' pay |
Final pay must include any accrued but untaken statutory holiday.
Bank holidays differ between the four nations: England and Wales have 8, Scotland 9 and Northern Ireland 10. There is no statutory right to a day off or extra pay on a bank holiday; it depends on the contract.
When a bank holiday falls on a weekend, a substitute weekday is usually given. Bank holidays can be counted towards the 5.6 weeks of statutory annual leave.
Leave groups give each office its own holiday calendar, so a team split across London, Edinburgh and Belfast gets the right bank holidays automatically. Holiday calendars →
Employees and workers must receive a written statement of their main terms on or before their first day. Contracts can be permanent, fixed-term, part-time or zero-hours, and can never give less than the statutory minimums.
There is no statutory maximum probation period; 3 to 6 months is common. An employee on successive fixed-term contracts for 4 years or more normally becomes permanent unless a longer term can be objectively justified.
Send contracts and written statements for e-signing, store right to work evidence on the employee's record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for United Kingdom, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for United Kingdom? Talk to us.
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