Sending Employees From the UK to the USA | Employer Checklist

Will you recognise the employee’s length of service?

The service date underpins several UK rights. Notice periods, redundancy pay and unfair dismissal protection all depend on it.

A fresh US contract can reset that date. The change often looks like administrative tidying, which is why employers miss it.

Decide deliberately whether you will recognise the original start date, and write the answer into the contract.

This matters most if the employee might return to the UK business. A reset date means they rebuild those rights from zero.

How should you structure pay and the relocation package?

Set the currency, the payroll location and the pay frequency. Many US employers pay fortnightly or weekly rather than monthly, so tell the employee when the first payment arrives.

Decide what the package includes. Common items are flights, shipping, temporary housing, a settling-in allowance and a cost-of-living adjustment.

Add a clawback clause. It requires the employee to repay part of the package if they leave within a set period.

Then decide on tax equalisation. Under this approach, the employer covers the extra tax cost of the move so the employee pays roughly what they would have paid at home.

Employer-paid relocation reimbursements are generally taxable US wages, according to IRS Publication 15-B. The employee’s UK tax residence also changes when they leave, and HMRC’s Statutory Residence Test decides it.

Why should you fund tax advice before the employee leaves?

Once an employee becomes a US tax resident, the IRS taxes their income wherever it comes from. That includes UK savings, investments and rental income.

Employees with UK accounts may face reporting duties, such as the FBAR and Form 8938. UK funds can also fall under the passive foreign investment company rules, which carry their own reporting on Form 8621.

Offer to fund a cross-border tax adviser before the move. Ask them to cover ISAs, UK pensions, shares, share options and the state where the employee will live.

Foothold America does not give tax advice. Your own adviser should confirm every figure for your situation.

What happens to social security and pension?

Two systems hold two separate records, and gaps in either are hard to repair.

The employee’s UK State Pension record

The full new State Pension is £241.30 a week and needs 35 qualifying years of National Insurance, according to GOV.UK.

Years worked in America do not add UK qualifying years. Tell the employee to check their record online before they leave.

The rules on voluntary contributions changed on 6 April 2026. Most people can no longer pay Class 2 contributions for time abroad.

Class 3 remains, but the employee now needs 10 years of UK residence in a row or 10 years of qualifying contributions, according to GOV.UK. They apply using form CF83.

Existing voluntary Class 2 payers can apply for Class 3 without meeting the 10-year test if they apply before 6 April 2027.

The certificate of coverage

The UK US social security agreement can keep a temporary assignee in the UK system. You then avoid US Social Security and Medicare tax during the assignment.

The SSA says the US work must be expected to last no longer than five years. The employer requests the certificate from HMRC and gives it to the US payroll team, so apply before the start date.

Without one, US payroll taxes apply to both sides. The IRS sets the rates at 6.2% for Social Security and 1.45% for Medicare, paid by the employer and again by the employee.

Social Security stops at $184,500 of earnings in 2026, according to the IRS. Our guide to FICA explains each element.

The employee’s UK workplace pension

The workplace pension stays where it is unless the employee moves it. Transferring to an overseas scheme can trigger a 25% overseas transfer charge, according to GOV.UK, so suggest specialist advice first.

Can the employee keep contributing to the UK workplace pension?

It depends on the contract and the scheme. Automatic enrolment applies to workers who work or ordinarily work in the UK under their contract, according to The Pensions Regulator.

Decide whether contributions continue, and tell the employee in writing.

UK tax relief may shrink. Full relief needs the individual to be a relevant UK individual, according to HMRC’s Pensions Tax Manual. That means UK earnings, UK residence in the tax year, or UK residence in the previous five tax years and when they joined.

Otherwise, relief is generally limited to the £3,600 basic amount.

The US UK tax treaty can make contributions to a UK scheme deductible or excludable in the USA. The employee must have paid in before starting US employment, and relief cannot exceed US limits.

The US authorities must also agree that the UK scheme generally corresponds to a US one. Ask your adviser to confirm this.

What should employees know about your 401(k)?

A 401(k) replaces the UK workplace pension. For 2026 an employee can contribute up to $24,500, with an $8,000 catch-up from age 50 and $11,250 at ages 60 to 63, per the IRS.

Employees often ask whether they can get the money back when they return to the UK. The money is not locked away, but withdrawing early costs more and can be more difficult to retrieve.

Withdrawals are taxed as ordinary income. Before age 59½, a 10% additional tax usually applies, with exceptions such as leaving the employer at 55 or later.

Once the person is not a US resident, plans must generally withhold 30% of a distribution unless documentation supports a lower treaty rate. Employees can often leave the money in the plan, roll it into an IRA or a new employer plan, or take it as cash.

Their own contributions are always 100% vested. Your match can vest over a schedule, so explain it, as a short assignment may end before the match becomes theirs.

What happens to bonuses and share options?

Rewards that vest over several years need a plan before the move. Decide how each one will be taxed in the UK and the USA if the employee leaves mid-vest.

Check what happens to unvested options, bonus eligibility and long-term incentives when the employee moves. Check whether the scheme rules change if the employing entity changes.

Share scheme tax treatment depends on the plan type and the employee’s residence at each vest. Ask your adviser to review it before the move, not at the next vest.

Which benefits replace the UK ones?

Several UK benefits are tied to the UK contract and stop when it does. Death in service, income protection and private medical cover are usually written for UK employees.

Check each policy’s territorial limits rather than assuming it continues.

Contribution levels to put in writing

Employees compare the US offer with their UK package, so state every contribution level in the offer letter.

• Your share of the health premium, for single and family cover.
• Any 401(k) match, and its vesting schedule.
• Whether UK pension contributions continue.
• Dental, vision, life and disability cover, and when each starts.

Benchmarks help you set these levels, and the figures below show typical health costs.

Healthcare

Healthcare is the largest change. Employers usually offer a plan and the employee pays part of the cost.

In 2025, average annual premiums for employer cover were $9,325 for single and $26,993 for family cover. Workers paid an average of $1,440 and $6,850 of that, according to KFF.

The difference is the average employer share. That works out at about $7,885 for single cover and $20,143 for family cover.

The average single-cover deductible was $1,886, and 34% of covered workers had a deductible of $2,000 or more. See our benefits benchmarking guide for how plans compare.

A group health plan cannot impose a waiting period longer than 90 days, according to the Department of Labor. Arrange private international cover for any gap.

Holiday

UK workers on a five-day week are entitled to at least 28 days of paid leave, according to GOV.UK. Employers can count bank holidays within that.

US federal law requires no paid vacation at all. The allowance is company policy, so agree it in the offer. Our guide to paid time off in the USA covers typical levels.

What happens when the move ends?

Assignments end, and few contracts say what follows. Silence usually means the employee has no right to return.

Answer five questions before they go.

• Is there a role waiting for them, and at what level?
• What if the UK business reorganises while they are away?
• Who pays to bring the family home?
• Does the service date resume on return?
• What happens if the US role ends first?

Put the answers in the assignment letter, not in a conversation.

What paperwork is required when the employee arrives and who owns it?

The first fortnight is paperwork. Each step unlocks the next.

Form I-9 and tax forms

Every new US employee completes Form I-9 to confirm identity and right to work. The employee completes Section 1 by their first day of paid work, and you ( or Foothold America) complete Section 2 within three business days.

The employee brings original documents, usually a passport and immigration papers. Our Form I-9 guide covers the process.

The employee also completes Form W-4, which tells you how much federal tax to withhold.

Social Security number

The employee needs a Social Security number for payroll, credit and most leases. The SSA suggests waiting 7-10 days after arrival so immigration records can be verified.

They apply in person with their passport and US immigration documents.

Bank account

An SSN is not legally required to open a US bank account. Federal rules let a bank accept a passport number from a non-US person, according to the FinCEN customer identification rule for banks.

Each bank sets its own policy, so ask which documents it needs. If a bank insists on an SSN, the employee opens the account after day 10.

Benefits enrolment

Give the employee the enrolment deadline in writing. Missing it can mean waiting for the next annual enrolment. Foothold America can assist with this.

How can you help the employee settle?

Your documents carry the employee’s first US applications, because they arrive with no US credit history.

Renting

Landlords ask for government ID, proof of income, a credit check and, in most cases, a criminal background check, according to Fannie Mae. Application fees run roughly $35 to $75 or more.

Deposits are commonly one to two months’ rent, and state or local law may limit them. Send a signed offer letter before the employee travels, as landlords accept an offer letter as proof of income.

Consider paying for a furnished first month. That gives the employee time to get a Social Security number and a bank account before they sign a lease.

Credit

A UK credit score does not transfer, so the employee starts from zero. A secured card needs a deposit, often $50 to $300, according to the CFPB.

Credit builder loans are typically $300 to $1,000 repaid over 6 to 24 months. Both help only if the lender reports to the credit bureaus.

Driving

Driving rules are set by each state. California, for example, requires holders of non-US licences to pass both a knowledge test and a driving test.

The household

A partner’s right to work depends on the visa category, so raise it with your immigration attorney at the start. Public school places are generally assigned by district.

The UK to USA mobility timeline for employers

The mobility mistakes we see most

Leaving the UK contract in place. Employing someone in a US state on a UK contract creates exposure for you.

Resetting the service date unseen. A new US contract can wipe out years of accrued rights without anyone deciding it.

Starting the certificate late. Payroll taxes apply until you hold one, so apply before the start date.

Promising a return verbally. A spoken promise of a role to come back to is not a right.

Does your company have a US employer ready?

For most transferring employees, the employer is a US company in your group. If you do not have one yet, it needs to exist before the employee’s start date.

Foothold America sets up US entities for UK and European companies. We file the C-corporation or LLC with the state, obtain the EIN, appoint a registered agent and refer you to banking partners.

Planning a move in the next six months? Tell us the state, the role and the start date, and we will work out the entity steps against your timeline.