PAYE vs Employer of Record (EOR): which is right for hiring in the UK?
Hiring in the UK from overseas, you'll quickly meet two options: run your own UK payroll (PAYE, or a DPNI scheme if you've no UK entity), or use an Employer of Record (EOR). They solve different problems, here's how to choose.
The core difference
With your own payroll, you remain the employer, you keep the direct relationship and pay a service to run the payroll and compliance. With an EOR, a third party legally employs your worker on your behalf, so they sit on the EOR's payroll, not yours.
When an EOR makes sense
- You want to start very fast and don't yet want any UK footprint.
- You're testing the UK with one or two hires and value speed over cost.
- You want someone else to carry the legal employment risk.
When running your own payroll wins
- You want to stay the direct employer and keep the relationship with your team.
- You're settling in the UK for the longer term, it's usually significantly cheaper ongoing.
- You've no UK entity but still want to employ directly, a DPNI scheme does exactly that, without forcing you to incorporate.
Side by side
| Your own UK payroll (PAYE / DPNI) | Employer of Record (EOR) | |
|---|---|---|
| Legal employer | You | The EOR |
| Speed to start | Days (existing scheme) to a few weeks (new HMRC registration) | Fastest |
| Ongoing cost | Lower, a payroll fee | Higher, a premium per employee |
| Control & relationship | Full, direct | Indirect, via the EOR |
| Needs a UK entity? | No, a DPNI scheme works without one | No |
The middle path most people miss: if you want to employ directly but have no UK company, you don't need an expensive EOR, a DPNI scheme lets you run compliant UK payroll as the real employer. That's our speciality.
Not sure which you are?
Try our quick payroll route finder, three questions and it points you to PAYE, DPNI or EOR. Or just ask us.