3 Reasons Why You Should Provide a Contract of Employment to Your Employees

contract signing

Published on December 30, 2019

3 Reasons Why You Should Provide a Contract of Employment to Your Employees

As an employer, there are certain duties that you must undertake. Firstly, these include setting up a PAYE scheme. Secondly, it should also include providing your employees with a contract of employment.  An employment contract is very important. Because this will form the foundation of any working relationship. Therefore it’s important to get it right.

What is a contract?

This is an agreement between you and your employee. It can be called a contract. Or a contract of employment. To summarise, it lays out the:

  • Rate of pay – always state in Gross!
  • Working hours
  • Rights (e.g. Holiday Entitlement/ Statutory Sick Pay/ Statutory Maternity Pay)
  • Responsibilities
  • Duties
  • Employment Conditions

Finally, it is important to remember that everything detailed in the contract must abide by employment law. In the UK for example, you must pay your employees at least minimum wage.

Besides that, you must also give the correct holiday entitlement. For more on this, you can visit Stafftax’s Rates and Thresholds page. And for help calculating your employee’s salary use the Net to Gross calculator.

Why should I provide a contract?

1. Your Employee has a Right to Receive a Contract of Employment.

All employees in the UK are entitled to receive a contract of employment within 8 weeks of their start date. And this is no different for household or domestic staff. Sometimes an employer fails to provide this. As a result they may become subject to legal costs.

*Please note that as of April 2020 an employer will be expected to provide a statement of written particulars, by the first day of employment. Details of what must be provided in a statement of written particulars can be found here.

2. It Clearly Lays out Duties and Responsibilities.

The contract should clearly outline the responsibilities and duties that your employee will be expected to perform.  So that the employee has a clear understanding of what is expected of them.  It also provides an opportunity to raise any queries or concerns about the role. A vital step to protect you both. Especially if those expectations are not met.

3. Contracts Help Prevent Conflict and Mitigate Risk.

Having a contract in place will act as a point of reference throughout the time your employee is working for you. The contract will detail both the employer and the employee’s rights and obligations. Therefore if there is any uncertainty a contract can avoid disputes.


To conclude, Stafftax is our recommended service provider for payroll. As part of their comprehensive payroll service, Stafftax offers its clients a free HR service. They provide advice, support and a free bespoke contract of employment.

Stafftax has been providing professional payroll servicesemployment contractsworkplace pensions and trusted HR advice to thousands of domestic employers. And they have been doing this for more than 15 years. If you’d like support or guidance on these matters, the Stafftax team will be happy to assist.

If you want a personal referral from Polo & Tweed, then get in touch with us. And we would be delighted to make a personal introduction.

This blog was written by our friends at Stafftax as a part of a series of blogs including Legal Duties of a Domestic Employer and 5 Key Benefits of Using a Payroll Provider

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