Employer of Record for one UK employee: is it worth it?

One employee, twelve months, fees only

The major Employer of Record platforms publish starting prices of $399 to $699 per employee per month, about £297 to £519 at HMRC's October 2026 rate, with $599 (about £445) the most common (each platform's own pricing page, read 22 October 2026). A starting price is the lowest fee, and a quote can be higher. Our guide to Employer of Record cost per employee sets that fee beside the cost of your own UK payroll.

Setup is £750, or £500 if you go ahead within two weeks of your quote, and no VAT is added. Setup is a one-off, so from year two the direct schemes cost £1,884 a year. Salary and pension are the same on every route, so they are left out.

An Employer of Record becomes the legal employer and takes on the employer's duties; we run the payroll while you stay the employer, so the fees pay for different things.

Who pays the fee on each route

An Employer of Record invoices you. On the direct routes it depends on whose name the scheme is in.

The employee sets up a DPNI and pays both their income tax and their employee National Insurance to HMRC under one PAYE reference. HMRC's DPNI guidance includes employees of an overseas employer that has no UK address it pays wages from. 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.

When someone works in the UK for an employer based in the EU and UK National Insurance is due, it is due on both sides, the employee's and the employer's, so the scheme is an NI-only scheme in the employer's name and not a DPNI or DCNI.

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.

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 cost that can change the sum

For most employees, UK employer's National Insurance is 15% of whatever they earn above £5,000 a year. On a £30,000 salary that is £3,750 a year. An Employer of Record is your person's UK employer, so ask whether its quote includes employer's National Insurance or adds it on top.

On your own payroll, it depends on where your company is based. HMRC's rule is that an employer owes UK employer's National Insurance if it is resident, present or has a place of business in Great Britain. An employer based in the EU can owe it as well, when the employee works in the UK and UK National Insurance is due.

It is usually poor value for one hire when

• you plan to keep the person for years, because the monthly fee repeats every year while the setup on a direct route does not;
• your only reason for an Employer of Record is that you have no UK company;
• you are content to be the employer and want a direct relationship with your UK person.

Starting with an Employer of Record and moving to your own payroll once the hire has settled is a sensible sequence too. Our guide to switching from an EOR sets out the order.

One UK employee: common questions

Is an Employer of Record worth it for one UK employee?

It depends on whether you want someone else to be the legal employer. If you are happy to stay the employer and only need the UK payroll run correctly, a DPNI costs £157 a month, plus a one-off setup fee. 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.

What does an NI-only scheme cost for one employee?

An NI-only scheme costs £157 a month for one employee. Setup is £750, or £500 if you go ahead within two weeks of your quote, and no VAT is added.

Can I start with an Employer of Record and switch later?

Yes. Many employers start that way and move to their own payroll once the hire has settled. Read the notice and exit terms before you sign rather than when you want to leave.

Read next

• Employer of Record cost vs your own payroll, with an interactive comparison.
• Employer of Record alternative in the UK, when you need one and when you don't.
• When an Employer of Record is the right answer, the cases where it fits.
• Switch from an EOR to your own UK payroll, how the move works.
• Pay a UK employee from abroad, the routes in plain terms.
• Payroll for one employee, the payroll jobs for a single hire and what each route costs.
• Employer of Record UK for US companies, cost and the direct route.
• Employer of Record UK: the complete guide, every EOR guide in one place.