Employees coming to the UK from abroad
While it is usually the case that the normal PAYE (Pay As You Earn) tax and National Insurance contributions (NICs) rules and procedures apply for employees who come to the UK from abroad, there are circumstances in which exceptions apply. This guide explains what these circumstances are, and what you need to do if they apply to your business.
Eligibility to work in the UK
The main focus of this guide is on the PAYE tax and NICs procedures you need to follow when employing someone who has come to the UK from abroad. However, before considering these procedures it is important that you first make sure that everyone you employ is entitled to work in the UK.
Check the eligibility rules for UK working on the Border & Immigration Agency website
The general rule for PAYE tax and NICs
For almost all businesses the rule is simple - PAYE tax and NICs deductions should be calculated and recorded in the same way as you would for any other employee.
How to record employee payments and deductions on form P11
Exceptions that require different PAYE tax procedures
In the following circumstances different PAYE tax procedures apply.
Your employee isn't resident or ordinarily resident in UK
If your employee isn't resident or ordinarily resident in the UK, and if they work both in the UK and overseas, we may issue a direction informing you how much of your payments to them should be subject to PAYE tax in the UK.
This kind of situation can arise when it's unclear how much of a payment to the employee relates to duties carried out in the UK and how much relates to duties carried out abroad.
You can ask us to issue a direction of this kind, but until you receive a direction from us you must calculate and deduct PAYE tax using the total amount that you pay to your employee.
More about what 'resident' and 'ordinarily resident' mean (PDF 640K)
Your employee is on a short-term visit to the UK
If your employee is only in the UK for business and spends less than 183 days here in a tax year, special PAYE tax rules may apply.
If you think that this affects your business, contact our Employer Helpline on Tel 08457 143 143. It's open 8.00 am to 8.00 pm Monday to Friday and 8.00 am to 5.00 pm on Saturday and Sunday.
More about NICs for employees coming to the UK from abroad
Exceptions that require different NICs procedures
If an individual who is employed by a company outside the UK is sent to work in your business, you must act as their 'host employer' and deduct NICs in the normal way.
However, if you are a 'host employer' and any of the conditions explained in the following sub-sections apply to your business, then there are different procedures you must follow.
If you need further help in relation to any of these, contact our Employer Helpline on Tel 08457 143 143. It is open from 8.00 pm to 8.00 pm, Monday to Friday and 8.00 am to 5.00 pm on Saturday and Sunday.
You can also read our more detailed guidance on NICs for employees from abroad - use the link at the end of this section.
Exceptions for employees sent from other EEA countries
If an employee is sent to work in your business by their employer in a country in the European Economic Area (EEA), and they have a valid form E101 issued by that country, then they are exempt from paying NICs in the UK. They will continue to pay NICs in their home country for the period specified on their E101.
There is a list of EEA countries at the end of this guide.
Exceptions for employees sent from countries with which the UK has a Reciprocal Agreement or Double Contribution Convention
If an employee is sent by their employer from one of these countries to work temporarily in your business, and they have a certificate from their home country, then they are exempt from paying NICs in the UK for the duration of their certificate.
There is a list of Reciprocal Agreement and Double Contribution Convention countries at the end of the guide.
Exceptions for employees sent from countries outside the EEA and without a Reciprocal Agreement or Double Contributions Convention
If an employee is sent by their normal employer from one of these countries to work in your business, and if all of the following conditions apply, then no NICs are due for the first 52 weeks after the employee arrives in the UK:
- the employee is not ordinarily resident or working in the UK
- they have been sent to work here temporarily by an overseas employer
- the overseas employer has a place of business outside the UK (it doesn't matter if they also have a place of business in the UK)
- the worker continues to be employed by the overseas employer
Once the period of 52 weeks finishes, you should begin deducting NICs from these employees in the normal way.
NICs exceptions for certain students
In almost all cases, you must calculate, record and deduct NICs in the normal way for students who come to the UK to work for you.
However, NICs are not payable for the first 52 weeks (starting from the first Sunday after they arrive in the UK) if all the following conditions apply:
- the employee is a student in full-time study outside the UK
- they come from a country outside the EEA and without a Reciprocal Agreement or Double Contributions Convention
- they do not normally live in the UK
- their work for you is carried out during their holidays
- their work is similar to, or related to, their studies
When the 52 week exemption finishes, the normal rules about working out, paying and recording NICs apply.
NICs exceptions for certain apprentices
In almost all cases, you must calculate, record and deduct NICs in the normal way for apprentices who come to the UK to work for you.
However, NICs are not payable for the first 52 weeks (starting from the first Sunday after they arrive in the UK) if all the following conditions apply:
- the person is employed outside the UK in a role similar to an apprentice
- they come from a country outside the EEA and without a Reciprocal Agreement or Double Contributions Convention
- they do not normally live in the UK
- they start work in the UK before reaching the age of 25
- their work in the UK is similar to, or related to, the work they carry out in their home country
When the 52 week exemption finishes, the normal rules about working out, paying and recording NICs apply.
EEA, reciprocal agreement and double contribution convention countries
The countries in the European Economic Area are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland.
The countries with which the UK has a reciprocal agreement covering NICs are: Barbados, Bermuda, Guernsey, Israel, Jamaica, Jersey, Mauritius, Philippines, Turkey, USA, Federal Republic of Yugoslavia (including Serbia and Montenegro, Bosnia-Herzegovina, Croatia, Slovenia and the former Yugoslav Republic of Macedonia). There is also an agreement with the Isle of Man.
The countries with which the UK has a double contributions convention covering NICs are: Canada, Republic of Korea and Japan.
