Switching from an Employer of Record to your own UK payroll

The same hire, at under half the service fee

An Employer of Record lets you put someone on the payroll in a country where you have no legal presence, fast. That premium is worth it at the start. It starts to look expensive once you are simply paying it every month for a person who is staying.

Four of the best-known EOR platforms publish starting prices of about £297 to £519 per employee a month (with $599, about £445 a month per employee, the most common, read 22 October 2026 and converted at HMRC's October 2026 rate), on top of salary, employer's National Insurance and pension. 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. Running your own UK payroll for a single hire, through a direct payment scheme if you have no UK entity, costs £157 a month per scheme, however often your employee is paid. Over a year that is roughly £5,340 against roughly £1,900 in fees, plus a one-off setup in year one, for the same salary and the same pension underneath. Employer's National Insurance can differ: the EOR pays it and passes it on to you, on a DPNI with no UK presence there's usually none, and an employer in the EU, the EEA or Switzerland usually pays it itself through an NI-only scheme.

So for anyone you intend to keep, moving off the EOR usually pays for itself many times over. This is how that move works, and how to do it without leaving your employee short on payday.

Where you are moving to

There are two destinations, and which one applies comes down to a single question: does your company have, or want, a UK entity?

On the direct payment route, a DPNI handles Income Tax and National Insurance. An NI-only scheme handles National Insurance only, and the employee's Income Tax is dealt with separately. Either way a specialist runs it for you. You do not need a UK company for it. See what a DPNI scheme is for the full picture.

Most companies leaving an EOR for a single UK hire land on the direct payment route, because avoiding a UK entity was the whole point of the EOR in the first place.

The switch, step by step

Done in the right order, the change is invisible to the employee. Their pay lands on time, every time, and one month they are simply paid by you instead of by the platform.

1. Choose the route. Own PAYE if you have a UK entity, a DPNI or NI-only scheme if you do not. If you are unsure, this is the first thing we work out for you. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts.
2. Set up your own scheme with HMRC. For a direct payment scheme that is a manual application to HMRC. It takes a little time to come through, so start it before you give notice to the EOR, not after.
3. Check the EOR contract. Look at the notice period and any offboarding fees or minimum term. This sets your timetable, so read it before you commit to a switch date.
4. Put the direct employment in place. The employee moves from being employed by the EOR to being employed by you, which means a new UK contract of employment. Continuity of employment and any accrued rights need handling with care rather than being lost by accident, so take proper employment advice on the wording. We keep this general here on purpose, because it is genuinely a legal point, not a payroll one.
5. Run the first payroll in parallel and reconcile. Line your first pay run up against the EOR's final figures, gross, tax, NI, pension, net, and confirm they match before you rely on it. This is the step that stops surprises.
6. Set up your own workplace pension. The pension moves too. Your pension duties start on the employee's first day with you, so choose a qualifying scheme, assess them and auto-enrol them from that day, so there's no gap in contributions. Then complete your declaration of compliance with The Pensions Regulator within five months.
7. Offboard the EOR cleanly. Give notice per their contract, agree the final pay date, and make sure there is no overlap where both you and the EOR pay, and no gap where neither does. Timing this around a single payday is the whole game.

What to watch

• Continuity of employment. This is the one to get right. The aim is that the employee's service carries over rather than resetting to day one. Handle it deliberately, with advice, not as an afterthought.
• Timing around payday. Start the new scheme and give notice so the handover falls on a clean payroll boundary. No double pay, no missed pay.
• The EOR's notice and exit terms. Some carry a minimum term or an offboarding fee. Knowing this up front is what keeps the switch on schedule.
• Right to work and contracts. You're a new employer, so carry out your own right to work check before the direct employment starts, rather than relying on the one the EOR did. The direct contract is new too, so make sure it's in place before the first direct pay run.

What you save

The salary and pension are the same whoever runs the payroll, so they are not part of the comparison. Employer's National Insurance can differ: the EOR pays it and passes it on to you, on a DPNI with no UK presence there's usually none, and an employer in the EU, the EEA or Switzerland usually pays it itself through an NI-only scheme. What changes on every route is the service fee.

Work out your own numbers with the Employer of Record cost calculator →

When not to switch

We would rather tell you straight. Stay on the EOR if the hire is short-term or still exploratory, if you genuinely want another party to hold the contract and liability, if you need zero UK employer obligations, or if you are standing up teams across several countries at once and want one vendor for all of them.

The switch is worth it when the hire is settled, UK-based and staying, and you are simply tired of paying a premium for it.

You keep your employee, they keep getting paid

We set up the scheme, line the first payroll up against the EOR's final numbers so nothing slips, sort the pension, and time the handover to a single clean payday. The monthly cost drops to a fixed £157 per scheme, and those are the 2026/27 rates with no VAT to add.

Tell us your situation and we will tell you which scheme we expect to ask HMRC for and a fixed fee, honestly, including whether staying on the EOR is actually the better call for you.

See how DPNI scheme setup works →

Questions we get asked

Can I move my employee off an EOR onto my own payroll?

Yes. If you are keeping a UK-based employee, you can move them from the EOR onto your own UK payroll. With a UK entity that is a standard PAYE scheme; with no UK entity it is usually a direct payment scheme: a DPNI in the employee's name, or an NI-only scheme in your company's name if it is in the EU, the EEA or Switzerland. The employee keeps being paid on time throughout if the handover is timed to a payday.

Will my employee lose continuity of employment when they leave the EOR?

Not if it is handled properly. Continuity of employment and accrued rights should be carried over deliberately as part of the move, which is an employment-law point worth taking advice on rather than leaving to chance. Payroll itself is the straightforward part.

Do I need to set up a UK company to leave an EOR?

No. If you do not want a UK entity, a direct payment scheme, or your own UK PAYE registration, allows you to employ your UK worker directly with no UK company, and a specialist runs the scheme for you. Setting up a UK company is only necessary if you want one for other reasons.

How long does it take to switch?

The main variables are the HMRC scheme setup and the notice period in your EOR contract, so start the scheme before you give notice. In practice it is a matter of weeks, timed so the handover falls on a clean payday.

How much cheaper is my own payroll than an EOR?

For a single UK hire, a typical EOR fee starts at about £445 a month, while a DPNI or NI-only scheme run for you is £157 a month per scheme, whatever the pay frequency. Over a year that is roughly £5,340 against roughly £1,900, plus a one-off setup in year one. Salary and pension are the same either way; employer's National Insurance can differ by route and by country.

Read next

• Employer of Record cost against your own UK payroll, the full comparison with a calculator.
• What a DPNI scheme is, the route for employers with no UK entity.
• Direct payment scheme setup, what the HMRC application involves and how long it takes.
• What a UK employee really costs, salary, employer's NI and pension in one place.
• Employer of Record UK: the complete guide, every EOR guide in one place.

This page is general information, not tax, legal or employment advice, and reflects the published rates for the 2026/27 tax year. Continuity of employment and contract terms are employment-law matters, so please take advice on your own position before acting.