Hiring Your First Employee in the UK: A Payroll Checklist
PAYE registration, pensions, payslips, and RTI — everything you need before payday.
Taking on your first employee is a milestone — and a compliance step-change. UK employers must register as an employer with HMRC, operate PAYE, and meet workplace pension duties before the first payday.
Before day one
Register as an employer with HMRC (allow up to 5 working days). Set up a workplace pension scheme if your employee is eligible — auto-enrolment applies to most workers aged 22 to State Pension age earning over £10,000 per year.
Collect a P45 if they had a previous job, or complete a Starter Checklist. Verify right-to-work documents and agree a written contract covering pay, hours, and leave.
Running payroll each month
Calculate gross pay, deduct income tax and National Insurance, and make employer NI contributions. Issue payslips on or before payday showing deductions clearly.
Submit a Full Payment Submission (FPS) to HMRC on or before each payday via RTI-compatible software. FinnAccountings handles calculations, payslips, and submissions automatically.
Pensions and benefits
Minimum employer pension contributions start at 3% of qualifying earnings. You may also offer benefits-in-kind (company car, health cover) which have separate reporting rules.
Common first-hire mistakes
Missing the FPS deadline, using the wrong tax code, forgetting to enrol in a pension, and paying cash without payslips are frequent errors. Our Payroll Agent validates each run before submission.
Put this advice into action
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