HR Software for United Kingdom

Leave Policy

Maternity Leave

Eligible employees can take up to 52 weeks of maternity leave: 26 weeks of regular maternity leave and 26 weeks of additional maternity leave. Statutory Maternity Pay (SMP) can be paid for up to 39 weeks for eligible employees, typically as follows:

The first 6 weeks: 90% of the average weekly earnings (AWE) before taxes.
The following 33 weeks: £172.48 or 90% of average weekly earnings (whichever is lower).
The last 13 weeks of maternity leave are unpaid.

From 6 April 2024, the maximum statutory pay after the first six weeks of maternity leave will increase from £172.48 to £184.03 per week. Employers can claim a portion of these payments back from HMRC, either 92% or 103%, depending on their total Class 1 National Insurance contributions.

You can use the leave module in IceHrm to manage maternity leave in United Kingdom.

Paternity Leave

Eligible employees are entitled to two weeks of paid paternity leave. The vacation must be taken over a period of time. The employee will receive £172.48 or 90% of their average weekly earnings (whichever is lower) during this period.

With effect from April 6, 2024, the maximum statutory pay will increase from £172.48 to £184.03 per week. Employers can claim a portion of these payments back from HMRC, either 92% or 103%, depending on their total Class 1 National Insurance contributions.

Also from April 6, 2024, changes to the Paternity Leave Regulation will come into force, granting fathers/partners extended rights to paternity leave within the first year after birth/adoption.

Parental Leave

Instead, mother and father can share up to 50 weeks of vacation and 37 weeks of pay after the first two weeks of mandatory maternity leave have been taken only by the mother (four weeks if the mother works in a factory).
The first 37 weeks will be paid at £172.48 per week or 90% of the worker’s earnings, whichever is lower. The remaining 13 weeks are unpaid.

In addition to standard parental leave, employees are entitled to an additional 18 weeks of unpaid leave, which lasts until the 18th.

With effect from April 6, 2024, the maximum amount of statutory pay for the first 37 weeks of shared parental leave will be increased from ₤172.48 to ₤184.03 per week. Employers can claim a portion of these payments back from HMRC, either 92% or 103%, depending on their total Class 1 National Insurance contributions.

Sick Leave

Employees are entitled to an unlimited number of sick days. The first 3 days of vacation are paid 100% by the company. After 3 days of sick leave, employees are entitled to up to 28 weeks of employer-paid statutory paid leave for eligible employees. Statutory sick pay is £109.40 per week.

From 6 April 2024, the weekly rate of statutory sick pay applies to all employees, but the daily rate depends on the number of qualifying days an employee works per week. The maximum amount of statutory sick pay will increase from £109.40 to £116.75 per week.

Pay & Tax

Minimum Wage Requirements

The minimum wage varies depending on age and hours worked. For employees aged 23 and over working 40 hours per week, the minimum wage is £1,806.13/month (£21,673.60/year).

From April 1, 2024, the minimum wage (National Living wage) will rise to £11.44 per hour. The age at which employees are entitled to the National Living Wage will be reduced from 23 to 21 years.

Individual Income Tax

Personal income tax ranges from 0% to 45%. Income tax is calculated at progressive rates. Several additional factors can affect overall rates, such as: the household status and the number of children.

Gross Annual Income	Tax Rate (%)
Up to £12,570	0%
£12,571 – £50,270	20%
£50,271 and £150,000	40%
Over 150,000	45%

Slightly different tax rates and tax brackets apply in Scotland, but these are taken into account by the tax authorities. Employees with a Scottish address have a slightly different tax number which allows them to be taxed correctly.

Payroll Cost

Employer costs are generally estimated at 17.3% of employee salary.

National insurance contributions – 13.80%
Mandatory private company pension scheme – 3%
Apprenticeship tax levy – 0.5% of the employee’s salary (subject to NIC).

National insurance contributions are calculated on monthly salaries above £758. The minimum employer contribution for the mandatory private company pension scheme is 3%, although the rate can be increased.
The apprenticeship levy is calculated on the employee’s salary subject to NIC.

Optional and conditional costs:

Optional private health insurance
- Individual worker: GBP 67.70
- Employees + children: GBP 98.55
- Couple: GBP 129.40
- Family: GBP 160.25
Optional life insurance – £10, £20, £30 or £40
Private Health Insurance Administration Fee – USD 15 per health insurance bill

These costs are given as estimates and are for general information purposes only. To fully understand all associated costs and fees associated with the terms of an employment contract for this country, please contact our sales team for a quote.

Overtime Pay & Maximum Hours

The standard working hours are 8 hours per day and 40 hours per week. The normal working week lasts from Monday to Friday. Pay for overtime is not mandatory, but an employee’s average wage for all hours worked must not fall below the national minimum wage.

Termination

Termination Requirements

Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.

Redundancies in the UK can be complex. In the UK, employers cannot terminate at their own discretion outside of the probationary period and the termination must be for good cause.

Legally compliant terminations include:

Fair dismissal
Unfair dismissal
Constructive dismissal
Unfair dismissal

Notice Period

The minimum notice period is 1 week and increases depending on the length of employment.

1 week if you have been with the company for 1-2 years
1 week for each year of service for 2 – 12 years
12 weeks if you have been with the company for more than 12 years

Severance for Employees

In the UK, all employees who are dismissed as a result of redundancy are entitled to severance pay. The severance payment is calculated as follows.

0.5 weeks of severance pay for each year of service if the employee was under 22 years old
1 week of severance pay for each year of service if the employee was between 22 and 40 years old
1.5 weeks of severance pay for each year of employment in which the employee was 41 years of age or older

Statutory Time Off

Paid Time Off

Full-time employees are entitled to 20 days of paid time off (PTO) per year and an additional eight holidays.

Please note that this is stated on the platform as 20 days of PTO and the employee is also entitled to 8 additional holidays.

The PTO entitlement (including holidays) is 5.6 weeks times the number of days the employee works per week.

Public Holidays

Public holidays, also known as bank holidays, vary by region in the UK. There are 8 public holidays in England and Wales, 9 in Scotland and 10 in Northern Ireland.

New Year’s Day
Good Friday
Easter Monday
Early May Bank Holidays
Spring Bank Holiday
Summer Bank Holiday
Christmas Day
Boxing Day

Additional Regional Holidays

January 2: Scotland Day
March 17: St Patrick’s Day Northern Ireland
July 12: The Twelfth Northern Ireland
November 30: St Andrew’s Day Scotland

Onboarding

Onboarding takes 1 working day after signing the SOW.

Additional Info

Employment Contract Details

All employment contracts must contain:

Name of employer
Name of the employee
Job title or job description
Start date
Contract term
End date for fixed-term contracts
Salary and salary frequency
Working hours and working days, if and how they may vary If applicable, information on working hours (if employees work on Sundays or at night or have to do overtime)
Vacation entitlement (and whether this includes public holidays)
Place of work and possible relocation of the employee
If necessary, other workplaces
Employer’s address
Probation period
Other services
Mandatory training and whether it is paid for by the employer or not
Conditions for termination of employment

For employees, the date on which previous employment was started must also be stated if this is counted towards an uninterrupted period of employment.

Probation Period

Probationary periods are not mandatory. The maximum duration of the probationary period is 6 months.