You run a company outside the UK, you have someone working for you in the UK, and now you have to pay them properly. Here are the three routes, what happens on each, and roughly what they cost.
You run a company outside the UK. You have taken on, or are about to take on, someone who lives and works in the UK. You have no UK office and no UK company, and now you need to pay them properly, which in the UK means running Income Tax and National Insurance correctly and giving them a real payslip.
The good news is this is a solved problem with a standard route. You do not need to open a UK company, and you do not need to guess. Here are your options, plainly.
If your company already has a UK entity, a branch or a subsidiary, you run a normal UK PAYE scheme, exactly like any UK employer. One scheme can cover several staff. If you have no UK entity, this is not your route, and setting up a company purely to run payroll is usually overkill.
A DPNI scheme is a direct payment scheme that HMRC sets up in the employee's name. It lets you pay a UK employee compliantly without a UK company. You stay the direct, overseas employer, and a specialist runs the scheme, the payroll, the reports to HMRC and the workplace pension for you. This is what most overseas employers with a single UK hire use.
An EOR becomes the legal employer in the UK on your behalf, so you sidestep the obligations entirely. It is fast and hands-off, and you pay a premium for that, usually £470 to £550 a month per employee. It earns its fee for short-term or exploratory hires, or when you want zero UK obligations. For someone you are keeping, your own scheme is far cheaper. See EOR vs your own payroll.
Paying a UK employee compliantly means the same core things, whoever runs it. The difference between the routes is not the obligations, it is who carries the admin and how much it costs.
For the full picture across every route, cost and obligation, read the cornerstone guide on employing UK staff from overseas.
This is the point people get stuck on. Hiring someone in the UK does not mean you have to incorporate here. A DPNI scheme exists precisely so an overseas employer can run compliant UK payroll with no UK entity. The employee is properly employed, HMRC gets what it needs, and you keep the direct relationship with your own employee.
What that looks like in practice
Take a fictional logistics firm in Kuala Lumpur that has hired an operations coordinator in Bristol. There is no UK office and no plan to open one. The scheme goes in the coordinator's name, we run the payroll and the RTI, the pension is set up and the coordinator gets a normal UK payslip every month. The firm carries on managing its own employee. On a non-EU employer like that we would expect no UK employer's National Insurance to apply, and we confirm that with HMRC before we quote rather than assuming it.
The one thing to plan around is that the DPNI scheme is a manual application to HMRC, and it takes a little time to come through. So the move is to start it before the first payday, not on it. Get the scheme underway early, gather the employee's starter details, set up the pension, and the first pay run lands on time.
If your company is abroad and you have one UK employee to pay, a DPNI scheme run for you is almost always the answer: no UK company, full compliance, one named contact, and a fixed fee of £157 a month per scheme. There is a one-off HMRC scheme setup on top, £500 with the early-onboarding discount, or £750 standard. Salary, any employer's National Insurance and the pension are separate, and they are the same whoever runs the payroll.
Tell us your situation and we will confirm the right route, whether any employer's NI applies in your case, and a fixed price, honestly, within one UK business day.
Yes. With no UK presence there are a few direct payment routes and we confirm the right one with HMRC. For most non-EU employers it is a DPNI scheme, which HMRC sets up in the employee's name. If your company is based in the EU or EEA, employer’s National Insurance is usually due as well, and HMRC’s route is then an NI-only scheme, which is registered in the employer’s name rather than the employee’s. We confirm which applies with HMRC before anything is set up. Either way a specialist runs it, you pay your employee directly, and Income Tax, National Insurance and pension are all handled correctly, with no UK company needed.
No. A DPNI scheme lets you employ a UK worker directly without incorporating in the UK. You would only set up a UK company if you wanted one for other reasons, such as scale, local contracts or funding.
Sometimes. Broadly, EU and EEA employers owe UK employer's (secondary) National Insurance, while many non-EU employers do not, but it depends on the specifics and should be confirmed with HMRC for your case. We check this for you before quoting. See employer's National Insurance explained.
A DPNI scheme run for you is a fixed £157 a month per scheme, plus a one-off HMRC scheme setup. That is a fraction of a typical Employer of Record fee of £470 to £550 a month. Salary, National Insurance and pension are separate and the same whoever runs the payroll.
Where your company is, where your employee is, and roughly what they are paid. We will confirm the right scheme, whether employer's NI applies to you, and a fixed fee. Within one UK business day.
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