How Much Does an Employer of Record Cost in the UK?
One of the first questions CFOs ask about an Employer of Record is simple:
How much does it cost?
The difficult part is that there is no single UK EoR price.
The final cost depends on the employee’s salary, statutory employer costs, benefits, provider fees, currency, employment structure and additional services.
The basic UK EoR cost formula
A useful starting point is:
Employee salary + employer costs + benefits + EoR fee + additional services = total employment cost
The EoR management fee is only one part of the equation.
1. Employee salary
This is usually the largest cost.
If you hire a UK employee on £60,000, your starting point is £60,000 — but your real employment cost will be higher.
2. Employer National Insurance
Employer National Insurance is an important component of UK employment cost.
The applicable thresholds and rates can change, so businesses should use current HMRC guidance when modelling the cost of a hire.
HMRC’s employer PAYE guidance explains how employers need to account for tax and National Insurance obligations.
3. Workplace pension
Eligible employees may also create workplace pension obligations.
This needs to be included in the CFO’s total-cost model rather than treated as an unexpected payroll adjustment.
4. EoR service fee
The provider normally charges a fee for administering the employment relationship.
Depending on the provider, this may be structured as:
- a fixed monthly amount;
- a percentage;
- a customised enterprise price; or
- a combination of service charges.
Always check what the headline price includes.
5. Additional costs
Possible additional charges can include:
- onboarding
- termination
- immigration
- visa sponsorship
- benefits administration
- expenses
- currency conversion
- additional HR support
- special payroll requirements
The cheapest EoR may not be the cheapest EoR
This is one of the most important points for CFOs.
Imagine Provider A charges a lower monthly fee but bills separately for onboarding, termination and currency conversion.
Provider B charges more but includes these services.
Provider B could produce the lower annual total.
Therefore, compare total cost of employment, not simply the monthly EoR fee.
Questions to ask an EoR provider
Before signing, ask:
- What is the monthly fee?
- Is the fee fixed?
- Is onboarding included?
- Is termination included?
- Are payroll services included?
- How are FX charges calculated?
- Are benefits included?
- What HR support is included?
- Are immigration services included?
- Is there a minimum contract period?
Build a CFO-ready comparison
Create a spreadsheet with these columns:
| Cost | Provider A | Provider B |
|---|---|---|
| Salary | £ | £ |
| Employer NIC | £ | £ |
| Pension | £ | £ |
| EoR fee | £ | £ |
| Benefits | £ | £ |
| FX | £ | £ |
| Onboarding | £ | £ |
| Termination | £ | £ |
| Total annual cost | £ | £ |
This gives leadership a much more useful answer than asking which provider has the cheapest advertised fee.
Final thought
EoR pricing should be judged against the value of speed, compliance infrastructure and reduced administrative overhead.
For a company making its first UK hire, that flexibility may be valuable.
For a company building a 100-person UK operation, a different structure may eventually be more economical.
About Accounting researches these options to help business leaders compare them. We do not directly provide EoR services.
Affiliate disclosure: Some provider links may be affiliate links. We may receive a commission if you take any services through them, at no additional cost to you and your company.
Pricing and statutory rates change. Verify current commercial terms and HMRC requirements before making a decision.
