Employer of Record · A US startup's remote UK employee
An Employer of Record for a US startup's remote UK employee, and the alternatives
A US startup with one person working remotely in the UK can put them on a UK payroll without setting up a UK company, in one of three ways. An Employer of Record can become the legal employer. Or the startup stays the employer and the payroll runs through a DPNI in the employee's name, or through UK PAYE in the startup's own name.
Onshore Partners runs the second and third. We are not an Employer of Record. This page sets out what each route costs, who pays, and what starts on the employee's first day.
Short answer: An Employer of Record becomes the legal employer, and four of the best-known Employer of Record platforms publish starting prices of $399 to $699 per employee per month. If the startup stays the employer instead, there are two direct routes. A DPNI costs £157 a month. A UK PAYE scheme in the company's own name starts at £225 a month plus £8 per payslip, and setting it up costs £350. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.
Staying the employer
The DPNI: a scheme in your employee's name
HMRC's DPNI guidance includes employees of an overseas employer that has no UK address it pays wages from. The employee sets up a DPNI and pays both their income tax and their employee National Insurance to HMRC under one PAYE reference. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.
A direct payment scheme doesn't work like an ordinary payroll. HMRC send the employee a deductions working sheet, the employee fills it in, and the tax and National Insurance payments go to HMRC from them. So you pay the gross salary and don't take any UK tax or National Insurance off it. We do the sums, tell them what's due and when, and they pay HMRC.
When the scheme is in the employee's own name, the employee is our client and pays our fees. An employer that wants to cover the cost can add the amount to the employee's pay, and the employee then pays us. That amount is part of their pay, so it's taxed like the rest of their salary, with National Insurance where it applies.
Or UK PAYE in the startup's own name
A company with no UK presence doesn't have to run UK PAYE, but it can choose to run it in its own name. Then the company takes the employee's income tax off their pay through its own payroll, and our fees are the company's cost, not the employee's. The employee's National Insurance still has to be paid: the company can pay it through its payroll if it's willing to and HMRC agree, and if not, the employee pays it directly.
A UK PAYE scheme in the company's own name starts at £225 a month plus £8 per payslip, and setting it up costs £350.
Employer's National Insurance
Does the startup owe UK employer's National Insurance?
Whether your company owes UK employer's National Insurance depends on whether it is resident or present in Great Britain or has a place of business here, and that's a question of fact. HMRC's manual lists the evidence it looks for, such as a registered office in the UK, fixed premises in the UK or a UK bank account. For a remote employee, one item on that list is worth checking first: whether the company pays the employee's rent or mortgage.
If it does turn out to be due, this is what it costs. For most employees, UK employer's National Insurance is 15% of whatever they earn above £5,000 a year. The employer pays it, not the employee.
If the person moved over from the US
Under the UK and US social security agreement, someone employed in the UK comes under UK National Insurance only, unless one of the agreement's exceptions applies. The main exception is someone your company normally employs in the US, who is covered by US social security, and whom you send to work in the UK for a period not expected to last more than 5 years. In that case the certificate of coverage comes from the US side, from the Social Security Administration, and it proves that UK National Insurance isn't due.
Common questions
A US startup's remote UK employee: common questions
What does an Employer of Record cost for one remote UK employee?
Four of the best-known Employer of Record platforms publish starting prices of $399 to $699 per employee per month on their own pricing pages, read 22 October 2026, with $599 the most common. At HMRC's October 2026 rate of 1.3456 dollars to the pound, that is about £297 to £519, and about £445 for $599.
Does a US startup need a UK entity to employ one remote person in the UK?
No. HMRC's DPNI guidance includes employees of an overseas employer that has no UK address it pays wages from. A company with no UK presence doesn't have to run UK PAYE, but it can choose to run it in its own name. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.
Who pays the fees on a DPNI?
When the scheme is in the employee's own name, the employee is our client and pays our fees. An employer that wants to cover the cost can add the amount to the employee's pay, and the employee then pays us. That amount is part of their pay, so it's taxed like the rest of their salary, with National Insurance where it applies.
Does the startup owe UK employer's National Insurance?
Whether your company owes UK employer's National Insurance depends on whether it is resident or present in Great Britain or has a place of business here, and that's a question of fact. HMRC's manual lists the evidence it looks for, and for a remote employee one item is worth checking first: whether the company pays the employee's rent or mortgage.
What starts on the employee's first day?
You must have employers' liability insurance from the day you become an employer, unless the only person you employ is based outside England, Scotland and Wales, and you can be fined £2,500 for every day you're not properly insured. The workplace pension (auto-enrolment) duties also start on the employee's start date, not when HMRC open the scheme.