Employing UK staff from overseas: the complete guide

You're based abroad, you've found the person you want to hire in the UK, and now you're wondering how on earth you actually employ them, without a UK company, without a UK bank account, and without falling foul of HMRC. The good news: it's entirely possible, it's done every day, and there are well-trodden routes for it. This guide pulls the whole picture together, the routes, the real costs, the obligations and the timeline, and links you to the detail on each.

The three routes, start here

Almost every overseas employer ends up choosing between three ways to put a UK person on the payroll. Each is legitimate; which one fits depends on whether you want to be the legal employer, whether you have (or will set up) a UK entity, and how fast you need to move.

If you're not sure which applies, our payroll route finder walks you through it in a couple of minutes, and the full comparison sits in hiring in the UK: PAYE vs DPNI vs EOR.

The direct payment route in brief

With no UK entity, which HMRC scheme applies depends on whether you owe UK employer's National Insurance. Employers in the EU, the EEA and Switzerland usually do, and use an NI-only scheme registered in the employer's name, with the employee's Income Tax going through Self Assessment or a tax-only scheme. Employers elsewhere with no UK place of business (no UK office, premises, branch or representative) usually don't, and use a DPNI scheme, a special PAYE scheme that is the employee's own, set up in their name by a manual application (we make it), under which the employee accounts for both PAYE tax and their own NI. A DCNI scheme, which collects only the employee's own NI, is a rarer scheme HMRC apply only in specific cases. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts. You can also register your overseas company for UK PAYE instead. And if your UK hire will actually work for a UK business, such as a UK client or group company, that business may have to run PAYE and pay employer's NI on their pay, so a direct payment scheme isn't the route.

Read the deep dives: what is a DPNI scheme?, DPNI vs DCNI, which applies?, and the direct payment scheme setup service.

EOR vs your own payroll

An Employer of Record lets you start almost immediately because someone else becomes the legal employer, but you pay a premium for that, every month, per person, and you don't hold the direct employment relationship. Running your own UK payroll (via a direct payment scheme if you've no entity) costs a fraction of that and keeps you as the real employer. The crossover usually arrives fast.

Weigh it up with Employer of Record cost in the UK, against your own payroll and PAYE vs Employer of Record: which is right?

What a UK hire actually costs

Salary is only the start. On top you'll budget a workplace pension, the admin of running it all and, where it's due, employer National Insurance at 15% on earnings above £5,000 a year. Whether it's due depends on who the employer is: an EOR, a UK entity or branch, or an employer in the EU, the EEA or Switzerland on an NI-only scheme usually pays it, while an overseas employer with no UK presence on a DPNI usually doesn't. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts. The employee, meanwhile, pays employee NI at 8% (then 2% above the upper threshold) and Income Tax, those come out of their pay, not yours, but they shape the gross figure you'll need to offer.

Don't take our word on the numbers. See them worked through in what a UK employee really costs and employer National Insurance explained, or run your own figures in the calculators.

Your obligations as the employer

Whichever route you pick (other than EOR, where the EOR carries these), being a UK employer comes with a fixed set of duties. None are optional, and most have deadlines:

• RTI reporting, you report pay and deductions to HMRC in real time, on or before payday, every period. See what is RTI? FPS and EPS explained.
• Auto-enrolment, you usually must enrol eligible UK staff into a workplace pension, with minimum contributions of 8% of qualifying earnings (£6,240 to £50,270 for 2026/27), of which at least 3% is the employer's. Details in auto-enrolment for overseas employers.
• Statutory payments, sick pay and family-related pay are owed by whoever pays UK employer's (secondary) NI. That can include an employer with no UK entity, for example one in the EU, the EEA or Switzerland on an NI-only scheme, and much of the family pay is recoverable. On a DPNI with no employer's NI, the overseas employer generally isn't liable for them. See SSP, SMP & SPP for overseas employers.
• Right to work, you must check your hire's right to work before day one, or risk a civil penalty. See right to work checks for overseas employers.

A common money-saver worth understanding is salary sacrifice, which can cut both employer and employee NI on pension contributions (from April 2029 the NI saving on pension sacrifice is capped at the first £2,000 a year).

How long it takes

The single biggest surprise for overseas employers is that a direct payment scheme cannot be opened online, HMRC sets it up manually, so it pays to start well before your intended first payday. Our UK payroll setup timeline lays out a realistic week-by-week plan so you're ready when the employee starts.

Hiring from your country

The mechanics are the same wherever you're based, but the comparison that helps it click is usually to your home system. We've written country-specific guides covering the differences that catch employers out, for example hiring a UK employee from the US, along with guides for Germany, Australia, Canada, the Netherlands and the UAE, all linked from the main hiring in the UK hub.

The bottom line

Employing UK staff from overseas comes down to three decisions: which route (own PAYE, a direct payment scheme, or EOR), what it costs once you add pensions and any employer NI that's due, and how you'll meet the ongoing obligations, RTI, auto-enrolment, statutory pay and right to work. Get those settled up front and the rest runs quietly. Each section above links to the full detail, and our payroll service exists to take the whole thing off your plate.

This guide is general information, not tax or legal advice, and reflects our understanding of the rules as at June 2026, including 2026/27 rates and thresholds. Your circumstances may differ, please get specific advice before acting.