Benefits to offer employees in the UK 2023: Businesses in the United Kingdom are required to provide a specified set of employee benefits in order to comply with UK labour rules. This is particularly significant for foreign employers of distant UK workers who may be unfamiliar with standard UK benefits.
To compete for the best people in the United Kingdom, businesses should offer competitive benefits packages that go above and beyond the minimum criteria. The Remote Guide to Employing Remote Workers in the United Kingdom addresses a variety of problems pertaining to UK employment, payroll, benefits, and labour legislation. This article examines various statutory, standard, and premium benefits in the United Kingdom.
Who is entitled to benefits in the UK?
In the United Kingdom, employees and workers (two distinct categories) are eligible for statutory benefits. Workers sign employment contracts with their companies and meet the usual definition of full-time workers. Workers occupy a grey area between independent contractors and employees. Under UK legislation, businesses that have attempted to designate employees as independent contractors have run into difficulty.
See Remote’s overview of UK labor laws for more information about businesses and employees. Employer-of-record software from Remote lets firms avoid categorization issues by ensuring full compliance with all UK labor laws.
Which employee benefits are common in the UK?
Paid time off
Employees in the United Kingdom are entitled to at least 20 paid vacation days and eight paid public holidays.Companies are required to pay employees for paid holiday vacation, but they are not compelled to pay overtime to employees who volunteer to work on holidays. To recruit top talent, many firms opt to give more than 28 days of paid leave.
Northern Ireland has a total of 10 paid holidays, including two additional public holidays.
In most cases, British employees may only carry over a maximum of eight PTO days per year. Workers who are required to take another type of leave (such as long-term sick leave) are permitted to carry over up to 20 days.
If an employee leaves in the middle of the year, the employer is compelled to pay out any unused PTO collected during the year.
Companies with employees in the United Kingdom may give unlimited PTO, but they must guarantee that employees take sufficient time off. Businesses that do not track PTO for employees in their native country must track PTO for British employees in order to comply with UK law.
Minimum wage and overtime pay
The minimum wage in the United Kingdom is age-dependent. 16- to 17-year-olds may work for a minimum wage of £4.15 per hour; however, adults older than 25 may not work for less than £8.72 per hour. This pay for workers over the age of 25 is known as the “National Living Wage.”
Remember that the government of the United Kingdom does not impose overtime pay. If a position routinely demands overtime, employers will frequently opt to incorporate overtime pay into employment contracts.
Statutory sick pay
The United Kingdom allows workers to miss up to one week of work without a doctor’s permission, sometimes known as a “fit note.” After one week, however, the employee must give the employer with a medical document confirming the condition.
Statutory sick pay, commonly referred to as long-term sick pay, pays employees with £95.85 per week and is paid by the employer. The employer must pay statutory sick pay for a maximum of 28 weeks if the employee remains ill. This term cannot be shortened, although it can be lengthened through employment contracts.
A worker on long-term sick leave cannot be forced to work, yet they continue to collect PTO as if they were present at work. If an employee decides to leave after many weeks of sick leave, the employer must pay out any unused PTO accrued through the date of departure, not the day the illness began.
There are two types of maternity leave in the United Kingdom: standard maternity leave and supplemental maternity leave. The initial 26 weeks of ordinary maternity leave in the United Kingdom are followed by an additional 26 weeks of leave, for a total of 52 weeks. 11 weeks before the due date, expectant moms may begin taking their leave. The law in the United Kingdom requires mothers to take at least two weeks of leave after the birth of their child.
For the first six weeks of maternity leave, employers must pay 90 percent of the mother’s average salary. Employers must pay the lesser of 90% of average weekly earnings or £148.68 per week for the next 33 weeks. Companies are not required to pay for the final 13 weeks of maternity leave, but women who do not need to return to work are still entitled to this time off.
A mother who wishes to change her return-to-work date must give her employer at least eight weeks’ notice.
There is no minimum work requirement for mothers to qualify for the maximum amount of maternity leave permitted by law.
With just two weeks, paternity leave in the United Kingdom is substantially less than maternity leave. Paternity leave cannot begin before the birth of the child, but employees may take paternity leave at any point within the first year after the child’s birth, as long as the leave is taken consecutively.
Regardless of gender, partners of pregnant employees are eligible for paternity leave. To be eligible for paternity leave, an employee must be one of the following:
- The father of the youngster
- The legal partner of the pregnant person
- The individual who adopts a child
- If the kid’s intended parent plans to care for the child following surrogacy, the intended parent
For maternity leave, mothers don’t have to have worked for a certain number of weeks before they can take it, but for paternity leave, they have to have worked for 26 weeks in a row.
Shared parental leave
Shared parental leave is not cumulative with maternity and paternity leave, but many families opt to share time following the birth of a child. Shared parental leave may last up to 50 weeks and be paid for up to 37 weeks. The parents are not required to take shared parental leave at the same time or even consecutively, but the time must be used within the first year of the child’s birth.
Pension plans, or pension schemes
Businesses in the United Kingdom are required by law to contribute at least 3% of each employee’s salary to a pension plan. Workers are required to contribute at least 5% of their salaries to the plan. There is no way for employment contracts to lower these contributions.
The majority of plans fall into two categories: defined contribution and defined benefit. In defined contribution plans, future payouts increase in proportion to the employee’s contributions. similar to 401(k) programmes in the United States. Under defined benefit plans, employees continue to contribute a predetermined amount, but the amount paid is not contingent on the amount provided. Instead, the retirement compensation is dependent on the length of time the individual worked for the company and their highest level of seniority.
Employers frequently enrol employees in pension contributions if they are between the ages of 22 and 66 and earn at least £10,000 per year.Companies can postpone pension enrolment for up to three months, but they must give the employee written notice and have a legally sound reason for doing so.
Private health insurance
The NHS provides health insurance to all citizens of the United Kingdom. Some organisations, however, attract top employees by including expensive private health insurance in the whole salary package. Private health insurance may grant access to clinics with reduced wait times or cover a greater number of elective treatments. Companies frequently provide employees with a financial stipend to spend towards the purchase of their own private policies.
Due to the fact that the NHS and commercial health plans do not cover some types of care, some employers provide supplemental insurance as part of their employees’ pay. These insurance options may include dental insurance, eyesight insurance, fertility assistance, specialist disability assistance, and others that fall outside the scope of normal health care.
Offer your UK employees better benefits with Remote
Remote is the authority on worldwide job issues. We can assist you in offering a comprehensive benefits package to your staff in the United Kingdom so that your firm can attract and retain the best personnel in your industry. Email us at firstname.lastname@example.org for more information on our UK employer record and contractor management options.
Frequently Asked Questions
What are the top employee benefits in 2023?
According to a new survey by Forbes Advisor, the most significant benefit for employees in 2023 will be employer-provided health insurance. Life insurance, pension and retirement plans, mandated paid time off, and mental health help rounded out the top-favored employee perks, in that order.
What perks do employers provide in the United Kingdom?
Required employee benefits in the United Kingdom include retirement, holiday pay, maternity and paternity leave (which employers frequently surpass as part of a full benefits package), and sick pay.