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UK PEO (Professional Employer Organization)

VERDICT: Horizons is the top UK Professional Employer Organization (PEO) in 2024. Horizons takes over all aspects of UK hiring and HR, covering recruitment, onboarding, payroll, and visa support. 

Key Takeaways

  • A UK Professional Employer Organization (UK PEO) is a company that specializes in payroll, HR, and benefits administration support for companies hiring in the UK.
  • A UK PEO may operate only in the UK market or be part of an international PEO company with operations in the UK.
  • When choosing a UK PEO, it is important to choose a provider with extensive knowledge of UK employment laws and market conditions. 
  • The best UK PEO companies are Horizons, Deel and Omnipresent. 

Mastering the intricacies of UK labor laws, tax structures, and cultural norms can be a complex task for overseas companies. This is where a UK PEO step in to simplify matters.

What is a UK PEO?

A UK PEO is a service provider that offers all-inclusive human resources (HR) outsourcing for businesses based in the UK or internationally. A PEO becomes the co-employer to your staff, managing HR, payroll, tax compliance, and numerous administrative duties on your behalf. 

A PEO co-employment contract agreement is formed between the client company and the PEO: While the client continues to control the daily management of employees, the PEO assumes responsibility for HR management, payroll processing, and compliance with UK laws and regulations.

A distinct UK HR solution for project-based contractors is ‘umbrella companies’ — third-party companies, often working with recruiters to facilitate payment and National Insurance contributions in the UK. 

Another similar UK HR solution is ‘Employer of Record,’ where a third-party company becomes the legal employer of UK employees on behalf of a client company. 

Top 3 UK PEOs

1. Horizons

Horizons is a global PEO company with a strong presence in the United Kingdom and Europe. Operating across 180+ locations, the Horizons platform can support your team regardless of their base.    

💡 Horizons international PEO starts at $299+ per employee per month. Inquire with Horizons for UK-specific pricing.

2. Deel

Deel is a respected global PEO platform offering PEO services in the UK and throughout Europe. Their intuitive Deel HR software makes it easy for companies to manage all their employees globally through one interface.  

💡 International PEO begins at $599 per employee per month. For UK-specific pricing, get in touch with Deel. 

3. Omnipresent

Omnipresent is a popular UK PEO platform with a strong global presence. Founded in the UK, Omnipresent is an expert in UK employment and tax law and will ensure your company is always in full legal compliance. 

💡 PEO pricing starts from $499 per employee per month.  Inquire with Omnipresent for prices in the UK specifically. 

Video: The UK PEO Model Explained

What services does a UK PEO Provide?

UK PEOs deliver a broad range of services to support companies operating within the country. These services include:

  1. HR Management: Comprehensive HR services, including benefits administration, resolution of HR issues, and compliance with UK labor laws.
  2. Legal Compliance: PEOs offer expertise in the complex legal landscape in the UK to ensure your company remains compliant.
  3. Recruitment Services: Many PEOs provide recruitment services, assisting companies in sourcing, hiring, and onboarding new employees in the UK.
  4. Risk Management: PEOs help mitigate the risks associated with employing staff in a foreign country, including dealing with employment disputes and ensuring workplace health and safety.
  5. Payroll and Tax Administration: PEOs manage payroll processing and tax administration, ensuring accurate payments to the UK tax authorities (HMRC) and deductions per UK regulations (see image below).

UK PEOs can support you with employee income tax (PAYE) administration

UK PEOs support tax administration in the UK
The UK PAYE Portal

What are the benefits of a UK PEO?

A Professional Employer Organization (PEO) can provide several benefits for businesses operating in the UK, particularly for small and medium enterprises or for foreign companies that are new to the UK business environment. Here are a few key benefits:

  1. Simplified Employee Management: A PEO becomes the employer of record, handling many of the complexities associated with human resources. This includes payroll administration, tax filing, and benefits administration, thereby freeing the client company to focus on their core business.
  2. Compliance: Navigating the UK’s employment laws and regulations can be tricky, especially for businesses new to the UK market. A PEO provides expertise in these areas, ensuring businesses remain compliant with employment laws, health and safety regulations, and other relevant legislation.
  3. Access to Better Benefits: PEOs can often negotiate better employee benefits packages due to their scale. This can make a business more attractive to potential employees and help with employee retention.
    Scalability: PEOs provide flexibility for businesses to scale up or down quickly. This can be particularly valuable for businesses in sectors with fluctuating staffing needs.
  4. Risk Management: By becoming the employer of record, the PEO shares certain employment-related risks. This can protect businesses from potential financial harm.
  5. Local Expertise: For foreign companies looking to establish a presence in the UK, a PEO provides valuable local knowledge and expertise. This can greatly simplify the process of setting up in a new country.

Remember to carefully consider the specific needs and circumstances of your business when deciding whether to partner with a PEO. Consulting with a legal or HR expert may be beneficial in making this decision.

What are the disadvantages of a UK PEO?

While there are numerous benefits, there can also be potential challenges to hiring a UK PEO:

  1. Loss of Control: While the client company retains control over the daily management of employees, the PEO makes many HR-related decisions, which can lead to a perceived loss of control.
  2. Cost: While PEOs can be cost-effective in the long run, the initial cost can be a barrier for some businesses.
  3. Dependency on the PEO: The partnership’s success largely depends on the performance of the PEO. If the PEO fails to fulfill its responsibilities, it could cause significant problems for the client company.

UK PEOs — Choose wisely

UK PEOs provide invaluable services for foreign companies looking to establish a presence in the UK market. They offer a full suite of HR services and possess in-depth knowledge of the UK labor market, significantly simplifying expanding into the UK.

A UK PEO  solution benefits international companies hiring UK-based employees. An umbrella company solution may be worthwhile for companies looking to hire temporary contractors in the UK. 

Our picks for the top UK PEOs in 2024 are Horizons, Deel and Omnipresent. 

UK Business Guides

FAQs

A UK PEO provides a fast and efficient way for foreign companies to start operations in the UK without establishing a legal entity. They manage all HR-related activities, including hiring, payroll, benefits administration, and compliance with local laws.

UK PEOs have expert knowledge of local employment laws and regulations. They ensure that all HR activities, including payroll, tax deductions, and employment regulations, comply with UK laws, mitigating the risk of non-compliance.

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