Register as an employer before payday
You must register before your first payday to get your employer PAYE reference number. You cannot register more than 2 months before you start paying people.
HMRC sends the reference by letter, so register as early as you can. Most limited companies can register online.
If payday arrives before the reference does, run payroll and keep a complete copy of your payment submission. Send HMRC a late Full Payment Submission once you have the reference.
HMRC will close your PAYE scheme if you are a new employer and you do not send a report to HMRC or pay HMRC in 120 days.
Choose payroll software or a provider
Payroll software records employee details, calculates pay and deductions, and reports to HMRC. If you would rather not run it yourself, a payroll provider can do it for you.
PayNinja's Employee Payroll is £24 a month and covers your first 4 employees. Payroll is an add-on to PayNinja's accountancy packages for bookkeeping, VAT returns, accounts and tax returns, which are quoted individually.
At PayNinja, Workplace Pensions auto-enrolment is handled as part of payroll.
Starter checklist before day one
Check right to work before employment starts. You can use an online check with a share code, check the applicant's original documents, or use an identity service provider. British and Irish citizens cannot get a share code, so they use original documents or an identity service provider.
- Keep copies of the right to work documents during employment and for 2 years after the person leaves.
- Get the employee's personal details and P45, or HMRC's starter checklist if there is no P45, to work out their tax code.
- Ask whether the employee must repay a student loan.
- Give the principal written statement of employment on the first day. The wider written statement is due within 2 months of the start of employment.
- Enter the details in your payroll software, then tell HMRC about the employee on or before their first payday with your first FPS.
Minimum wage rates from 1 April 2026
Pay at least the rate that matches the employee's age. The rates change on 1 April every year.
These hourly rates apply from 1 April 2026:
- National Living Wage, age 21 and over: £12.71
- Age 18 to 20: £10.85
- Under 18: £8.00
- Apprentice, under 19 or in the first year of the apprenticeship: £8.00
Pension and insurance duties
Your automatic enrolment duties start on the day your first member of staff starts work. You must write to staff no later than 6 weeks after that date and complete a declaration of compliance with The Pensions Regulator no later than 5 months after it.
Workers aged 22 to State Pension age who usually work in the UK and earn at least £10,000 a year must be enrolled. In most schemes, the minimum total contribution is 8%, with at least 3% from the employer, on earnings between £6,240 and £50,270 a year.
You also need employers' liability insurance as soon as you become an employer, with cover of at least £5 million from an authorised insurer. You can be fined £2,500 every day you are not properly insured. Failing to display your certificate where employees can reach it could cost you £1,000.
A small number of exemptions exist, such as employing only a close relative. They are listed on the GOV.UK page.
Your first FPS and first payment
Record pay, make deductions and report to HMRC on or before the first payday. You do this with a Full Payment Submission, which also registers the new employee with HMRC.
Then pay HMRC what you owe by the 22nd after the tax month ends, or the 19th if you pay by post. If you usually pay less than £1,500 a month, you may be able to pay quarterly.