Hiring in the United Kingdom from DACH: employer guide

A Swiss, German or Austrian company hiring someone who works in the United Kingdom should first separate a new UK-based hire from a temporary assignment. A new local hire normally requires UK employment and right-to-work steps plus a documented determination of PAYE, National Insurance and workplace-pension obligations. A qualifying employee sent temporarily from the EU or Switzerland may instead remain in the home social-security system with a certificate, but that exception does not decide PAYE, immigration or employment rights.

Quick answer

Is this a new UK hire, a temporary posting or regular multi-country work?

Write down the worker’s residence, nationality, current employer, every physical work location, expected duration, workday split, duties, reporting line and signing authority.

• A new UK hire joins an ongoing role based in the UK. It should not be described as a posting merely because the employer is abroad.
• A temporary assignee already works for the DACH employer and is sent to the UK for a defined period while the home relationship continues.
• A multi-country worker regularly performs the same employment in the UK and at least one other country.
• A contractor operates a genuinely independent business under the relevant tax and employment-rights tests.

Germany and Austria follow the EU-UK coordination route for qualifying detached workers. Switzerland uses its own current agreement with the UK. The practical certificate terminology can look similar, but the home institution and legal instrument are not interchangeable.

For home-country preparation, use the Switzerland outside-EU guide, Germany outside-EU guide or Austria outside-EU guide. The employee, contractor or EOR framework provides the neutral model comparison before the UK-specific checks below.

How does direct employment work when the employer is outside the UK?

Direct employment can be possible without a UK subsidiary, but it is not one automatic registration package. HMRC’s current globally mobile employee guidance says PAYE has a territorial limit. A foreign employer without sufficient UK presence may voluntarily operate PAYE. If the worker is sent to perform work for a UK entity, that entity may instead have to operate PAYE unless the foreign employer does so voluntarily.

HMRC also describes PAYE Direct Payment for defined cases where income is assessable, tax is likely, no employer operates PAYE or normal operation is impractical, and the employee can administer it. That route requires HMRC handling and should not be assumed from the employer’s foreign address.

Before the offer, obtain a written answer to:

1. Does the DACH company have sufficient UK presence for PAYE purposes?
2. Is there a UK group company, branch, customer or other entity using the work?
3. Who registers, runs payroll, files Real Time Information and pays deductions?
4. How will National Insurance be collected if UK coverage applies?
5. Does automatic enrolment apply, and who operates the pension scheme?
6. Does the company need Companies House, Corporation Tax or another registration?

Keep the HMRC conclusion, account details, payroll calendar, named operator and correction route. A payroll bureau calculates or files tasks under its engagement; it does not by that fact resolve who is legally responsible.

When does UK National Insurance apply?

HMRC states the general starting point plainly: a person coming from the EU or Switzerland to work in the UK usually pays into the UK system. The employer’s contribution liability follows the employee’s applicable system.

For a new employee recruited into an ongoing UK role, begin with that UK-coverage assumption and obtain confirmation for the actual facts. If UK coverage applies, map employer and employee National Insurance, reporting, payment and pension interaction with HMRC and the payroll adviser.

What is the Germany or Austria temporary-work exception?

For an employee already employed in Germany or Austria and sent to the UK temporarily, HMRC describes a certificate route under the EU-UK coordination provisions. A qualifying period can be up to two years. The German or Austrian competent institution issues the certificate of coverage, also referred to as PDA1, which can evidence exemption from UK National Insurance for the covered period.

Do not treat the two-year number as the only test. The employer must normally carry on activity in the sending country, the assignment must be temporary, and the complete personal and factual scope needs confirmation. Apply before relying on home coverage and keep the certificate with the workday and assignment file.

What is different for Switzerland?

HMRC separately lists Switzerland under the UK’s social-security agreements. Its incoming-worker guidance describes a certificate for qualifying temporary work from Switzerland, also generally up to two years, and a route for people who work in both Switzerland and the UK.

Ask the competent Swiss institution to determine the applicable system and issue the correct evidence. Do not use an EU application merely because a German or Austrian colleague would use one. In every direction, the coverage certificate is not a work permit and does not decide income tax.

Which DACH route should the case file name?

Do not file all three home countries under a generic “European A1” label. The decision record should identify the sending state, legal instrument, competent institution, application reference, covered employer, exact UK period and worker. This makes it possible to test whether later work still matches the certificate.

For each route, verify the certificate before treating home coverage as settled. If duties, employer, duration or regular work countries change, return to the issuing institution. Payroll and tax owners should receive the coverage result, but must complete their own analysis rather than copying it as a tax conclusion.

What must happen before the worker starts?

Before employment, carry out the prescribed right-to-work check to establish the applicable statutory excuse against a civil penalty. The correct method can involve the online service, acceptable documents or the Employer Checking Service, depending on status. Use the current employer guide, retain the required evidence and calendar any repeat check.

Do not infer UK work permission from Swiss, German or Austrian nationality, residence, an A1 or a social-security certificate. Since the end of free movement, some EEA and Swiss citizens rely on existing UK status while others need an immigration route and, in some cases, employer sponsorship. Confirm the person’s exact status and role before agreeing a start date.

For the employment file, GOV.UK says the principal written statement is due on the first day and the wider statement within two months. The official checklist includes employer and worker names, role, start, pay, hours, holiday, place of work, probation, benefits, leave and notice, followed by pensions, collective agreements and procedures.

Use that list as a floor. Obtain UK advice on working time, holiday pay, sickness, family leave, minimum wage, deductions, expenses, data, health and safety, discrimination, dismissal and any collective terms. Confirm whether England and Wales, Scotland or Northern Ireland creates a different requirement for the role.

How should automatic enrolment be handled?

GOV.UK ties workplace-pension automatic enrolment to worker status, age, earnings and ordinarily working in the UK, with exceptions. Thresholds and procedures change, so do not copy a historic number into the offer.

Before payroll goes live, use current Pensions Regulator and GOV.UK guidance to determine:

• whether the person is an eligible jobholder or has another right to join;
• the enrolment and contribution date;
• the qualifying scheme and payroll integration;
• required worker communications;
• opt-out and re-enrolment administration; and
• who keeps evidence and responds to pension questions.

An overseas retirement plan should not be assumed to replace UK duties. Obtain a written pension determination for the actual plan and worker.

Why is contractor status not a contract choice?

UK guidance distinguishes employee, worker and self-employed status. Employment-law status determines rights and employer responsibilities, while tax status can differ. The real working relationship matters more than the chosen label.

Review personal service and substitution, control over how, when and where work happens, integration, mutual commitments, financial risk, equipment, pricing, other customers and the ability to profit or lose. HMRC’s Check Employment Status for Tax tool can give HMRC’s tax view based on supplied facts, and HMRC says it will stand by results while the information remains accurate and follows its guidance.

CEST is not the whole employment-rights analysis. Keep its inputs and result, obtain employment-law advice where status is close, and make sure daily practice matches the documented model.

Which engagement model fits?

When may an EOR help?

An EOR may help when the relationship should be employment, no suitable UK group entity is ready and the company does not want to operate the confirmed foreign-employer route. The written documents should identify the UK legal employer and allocate right-to-work checks, PAYE, National Insurance, pension, benefits, employment documents, records and termination steps.

In Deel’s dated workflow, Deel is selected as legal EOR. It asks for country, location, visa needs, role, seniority, scope, compensation and work arrangement, and it includes restrictions before quote and agreement review. Obtain written confirmation of the exact UK employing entity, nation, role, sponsorship position, pension and benefit package.

When may an EOR not fit?

An EOR may not fit when the group already has a suitable UK entity, HMRC confirms a manageable direct setup, the provider does not accept the role or nation, sponsorship is unavailable, or lasting UK operations justify an entity. It does not establish contractor status or decide the DACH company’s UK tax presence, Companies House position or permanent establishment.

What needs a separate company and tax review?

Companies House says an overseas company must register if it sets up a UK place of business or usually conducts business from somewhere in the UK. It also says a company without a UK base does not register on that basis, while Corporation Tax registration may still be relevant.

Do not infer the outcome from one remote employee. Review the worker’s home office, authority to negotiate or sign, sales and customer work, management responsibility, other UK activity and any space available to the company. Separate:

• PAYE presence and payroll operation;
• Companies House overseas-company registration;
• Corporation Tax and permanent establishment;
• VAT or other business taxes;
• employee income tax and treaty relief; and
• the home-country company’s payroll, reporting and profit-allocation position.

Record the conclusion, facts and reviewer. Reopen it when duties, authority, UK locations or headcount change.

How should the implementation be controlled?

Create one facts sheet for every adviser and provider. Include employer jurisdiction, worker residence and status, UK nation and address, every work location, existing employment, assignment duration, duties, authority, compensation, benefits and planned start.

Use four gates: confirmed facts, selected model, evidenced setup and authorised start. The final gate should require the right-to-work check, payroll route, National Insurance decision, pension assessment, delivered written particulars, insurance and escalation contacts. Give every unresolved item a named owner and resolution date.

Use a responsibility matrix covering registrations, payroll, coverage certificates, immigration, pension, employment records, leave, expenses, equipment, safety, data, sickness and termination. For each row identify the legal entity responsible, the operating party, evidence, correction contact and exit owner.

Require advance approval before the worker changes address or UK nation, works regularly in another country, gains signing authority or begins a long customer assignment. Recheck after the first payroll and after the first full month of workdays. Store a one-page decision record with the evidence and calendar certificate, immigration, pension and provider review dates.

What should be checked after the start date?

The first payroll is an evidence test, not merely a payment event. Compare the payslip, PAYE reference, National Insurance treatment, pension deduction, benefit elections and net payment with the approved setup. Confirm that the employing entity and work address shown in the records are correct. Give the worker a contact for errors and record how any correction will appear in the next submission and payslip.

After the first full month, compare actual physical workdays with the assumed UK and DACH pattern. Ask the manager whether duties, customer contact, signing authority, supervision or workspace differ from the facts used for payroll and tax advice. If the person was treated as temporarily detached, confirm that the certificate covers the actual start, employer and period.

At 90 days, review the responsibility matrix with the worker and manager. Check right-to-work evidence, pension communication, holiday and sickness processes, expenses, equipment, security access and required training. Record open items rather than treating silence as completion. The review cadence is an internal control, not a statutory deadline, and should be shortened where a certificate, immigration permission or provider condition expires earlier.

Give the worker and manager a one-page handover that names the employing entity, approved work pattern, payroll and pension contacts, absence route, right-to-work escalation and the owner of location changes. Test it with one scenario, such as regular work beginning in a DACH country. Record who receives the facts, who reopens the relevant reviews and who communicates whether the approved arrangement changes. Keep the handover linked to the controlled case file so later corrections reach both people.

Key terms

Key terms

Employee

A worker engaged under a local employment contract, with the employer responsible for payroll, social security contributions and compliance with local labour law.

Contractor

A self-employed individual or business engaged for specific services under a commercial contract, without the employment protections or payroll obligations that apply to employees.

Employer of Record (EOR)

A third-party provider that legally employs a worker on behalf of a client company in a country where the client has no local entity, handling local payroll, contracts and compliance.

Permanent establishment

A tax concept describing a fixed place of business or sufficient business activity in a country that can trigger local corporate tax obligations for a foreign company.

Misclassification

Treating a worker as a contractor when, based on the actual working relationship, local law would classify them as an employee, which can create back taxes, penalties and employment claims.

Final checklist

• Separate a new UK hire from a temporary or multi-country worker.
• Confirm who must operate PAYE and how National Insurance is collected.
• Use the EU route for Germany or Austria and the Swiss route for Switzerland.
• Complete the current right-to-work process before employment starts.
• Build UK written particulars and nation-specific employment terms.
• Assess automatic enrolment with current thresholds and worker facts.
• Test contractor status for both tax and employment rights.
• Review Companies House and tax presence separately from the employer model.
• If an EOR remains appropriate, use Deel's consultation page to request current UK entity, role, immigration, pension and benefit details (opens in a new tab) and compare the response with an alternative.You can also go to the provider's website directly.