Hire a software engineer in the UK without a UK entity

Four ways to engage a UK engineer

Decide what the role really is

In employment law, a person's employment status helps decide their rights and their employer's responsibilities. A person may have a different employment status in tax law. Courts and tribunals can make final decisions on employment status.

If the engineer works through their own limited company, you may hear about IR35, the off-payroll working rules. They make sure that a worker, sometimes known as a contractor, pays broadly the same income tax and National Insurance as an employee would. Our employed or self-employed guide covers the questions.

Employing the engineer with no UK company

If the engineer works from home in the UK for your overseas company and is paid from abroad, there are three routes.

• DPNI. 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.
• NI-only. 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.
• Your own UK PAYE. A company with no UK presence doesn't have to run UK PAYE, but it can choose to run it in its own name.

One exception: if the engineer will work for a UK business, such as your UK client, that business may have to run PAYE on their pay. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.

What to sort out before they start

• Right to work. You must check that someone is allowed to work for you in the UK before you employ them. If the engineer needs a visa to work for you, that is an immigration question, separate from payroll, and not something we handle.
• Insurance and pension. 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.
• Benefits beyond pay. Tell us at the start if you will provide benefits or pay expenses. This matters most on an NI-only scheme. If an employer also provides expenses and benefits, HMRC set its record up as a "P" scheme instead of an NI-only one, because they expect a form P11D(b) and a Class 1A National Insurance charge. It's a different kind of HMRC record, not a different price, and we charge the same either way.

What each route costs on top of salary

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.

A DPNI costs £157 a month. An NI-only scheme costs £157 a month for one employee, and £150 a month plus £7 per payslip for two or more. Setup is £750, or £500 if you go ahead within two weeks of your quote, and no VAT is added. 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.

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. When the scheme is in the employee's own name, the employee is our client and pays our fees. For most employees, UK employer's National Insurance is 15% of whatever they earn above £5,000 a year, and whether it is due on your own payroll depends on where your company is based.

Hiring a UK engineer: common questions

Can I hire a software engineer in the UK without a UK company?

Yes. A company with no UK presence doesn't have to run UK PAYE, but it can choose to run it in its own name. HMRC's direct schemes are the other route: a DPNI, set up in the employee's name, or an NI-only scheme in the employer's name where the employer is based in the EU, the EEA or Switzerland. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.

Should a UK engineer be a contractor or an employee?

That isn't something a payroll provider decides. Courts and tribunals can make final decisions on employment status. A person may have a different employment status in tax law. Acas can advise on employment status, and their helpline is 0300 123 1100.

How soon can the engineer be paid?

We'd allow four to eight weeks for HMRC to set the scheme up, and that's our own estimate, not a figure from HMRC. If pay starts before the scheme is in place, payroll still runs every payday and is reported to HMRC late once the scheme exists.

Read next

• Pay a UK employee from abroad, the routes in plain terms.
• Employer of Record alternative in the UK, when you need one and when you don't.
• Employer of Record cost vs your own payroll, with an interactive comparison.
• Employer of Record UK for US companies, cost and the direct route.
• 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.
• Employer of Record UK: the complete guide, every EOR guide in one place.