Register as an employer before the first payday — and no more than two months before you start paying people. That window is the thing most first-time employers get wrong.
Everything else follows a fixed sequence. Here it is, in the order you need it.
First: do you actually have to register?
You must register for PAYE if any of the following applies to an employee in the current tax year, meaning since 6 April:
- they are paid £96 or more a week
- they get expenses and company benefits
- they are getting a pension
- they have had another job
- they have received Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit
One trigger is enough. If none applies, you do not have to register — but you must still keep payroll records.
You must also register even if you are only employing yourself, for example as the only director of a limited company.
Step 1: Register as an employer
Register before the first payday so HMRC can issue your employer PAYE reference number, which arrives by letter. You cannot register more than two months before you start paying people.
Most limited companies with one to nine directors can register online. Other business types follow a slightly different route from the same GOV.UK entry point.
If the reference has not arrived by payday, do not delay paying your employee. Run payroll, store the Full Payment Submission, and send it to HMRC as a late FPS once your reference arrives, selecting late reporting reason code G.
Step 2: Get what you need from the employee
Before their first payday you need:
| Item | Why |
|---|---|
| P45 from their last job | Gives you the tax code and year-to-date figures |
| Starter checklist, if no P45 | HMRC’s replacement for the old P46 |
| National Insurance number | Required on the FPS |
| Bank details | To pay them |
| Student or postgraduate loan plan number | Determines the repayment threshold |
The right to work check is separate and comes first. You must check that a job applicant is allowed to work for you in the UK before you employ them. You can check online using a share code, check original documents with the applicant present, or use an identity service provider offering Identity Document Validation Technology. British and Irish citizens cannot get a share code, so you check their documents or use an identity service provider.
Keep copies of the documents during employment and for two years after they stop working for you, and record the date you made the check. Get this wrong and you face a civil penalty for employing an illegal worker.
Step 3: Choose payroll software
Your software calculates tax and National Insurance and files to HMRC. HMRC publishes a list of recognised packages, and its own Basic PAYE Tools is free but limited — it cannot, for example, produce payslips.
Whatever you choose has to be able to send an FPS and an EPS.
Step 4: Send the first FPS
The Full Payment Submission tells HMRC what you paid and what you deducted. Send it on or before payday, every time, even if you pay HMRC quarterly rather than monthly.
Include everyone you pay, even if they earn less than £96 a week.
Enter your usual payday, not the date you actually paid. If your normal payday falls on a bank holiday and you pay early, the FPS still shows the regular payday.
Step 5: Issue a payslip
Payslips must be provided on or before payday, printed or electronic. By law a payslip must show:
- earnings before and after any deductions
- the amount of any deductions that may change each time, such as tax and National Insurance
- the number of hours worked, if pay varies with time worked
Fixed deductions — a season ticket loan, for example — can be explained either on the payslip or in a separate written statement. That statement must be sent out before the first payslip and updated every year.
Step 6: Deal with auto-enrolment from day one
Your automatic enrolment duties start on the day your first member of staff starts working for you. This is your duties start date and it is not optional or deferrable.
You must enrol, and make an employer contribution for, all staff who:
- are aged between 22 and State Pension age
- earn at least £10,000 a year
- normally work in the UK
The 2026/27 thresholds are unchanged from 2025/26. Contributions are calculated on qualifying earnings — under most schemes, total earnings between £6,240 and £50,270 a year before tax, including salary, bonuses, commission, overtime and statutory sick, maternity, paternity and adoption pay.
| Contribution | Minimum |
|---|---|
| Employer | 3% |
| Employee | 5% |
| Total | 8% |
Staff earning between the lower limit and the £10,000 trigger are not automatically enrolled but can opt in, and you must then contribute. Deduct contributions each pay period and pay them into the scheme by the 22nd of the following month (19th if you pay by cheque).
If a member of staff becomes eligible later because their age or earnings change, you must enrol them and write to them within six weeks of the day they meet the criteria.
Step 7: Pay HMRC
Pay by the 22nd of the following month, or the 19th if you pay by post. If you expect to pay less than £1,500 a month, you can arrange to pay quarterly by contacting HMRC’s payment enquiry helpline.
Send an Employer Payment Summary by the 19th of the following tax month if you need HMRC to reduce what you owe — for statutory maternity, paternity, adoption, neonatal care, parental bereavement or shared parental pay, to claim the Employment Allowance, or to reclaim CIS deductions as a limited company. Tax months start on the 6th.
The 2026/27 numbers you will actually use
| Figure | 2026/27 |
|---|---|
| National Living Wage, aged 21 and over | £12.71 an hour |
| National Minimum Wage, aged 18 to 20 | £10.85 an hour |
| National Minimum Wage, under 18 | £8 an hour |
| Apprentice rate | £8 an hour |
| Personal Allowance | £12,570 (£242 a week) |
| Employee National Insurance | 8% from £12,570 to £50,270, then 2% |
| Employer National Insurance | 15% above £5,000 (£96 a week) |
| Employment Allowance | £10,500 |
| Statutory Sick Pay | £123.25 a week, or 80% of average weekly earnings if lower |
| Statutory maternity, paternity and adoption pay | £194.32 a week, or 90% of average weekly earnings if lower |
The minimum wage rates apply from 1 April 2026. The apprentice rate applies to apprentices aged under 19, and to apprentices aged 19 or over who are in the first year of their apprenticeship. Once they are 19 or over and have completed the first year, they get the rate for their age.
Frequently asked questions
When do I have to register as an employer?
Before the first payday. You cannot register more than two months before you start paying people. Register early enough for HMRC to post your employer PAYE reference number, and check GOV.UK for current processing times.
Do I need to register for PAYE if my employee earns less than £96 a week?
Not on earnings alone. But you must register if they get expenses or company benefits, are receiving a pension, have had another job in the tax year, or have received Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit. If none of those applies you still have to keep payroll records.
What if I have to pay someone before my PAYE reference arrives?
Run payroll as normal, store the Full Payment Submission, and send it to HMRC as a late FPS as soon as your employer PAYE reference arrives, selecting late reporting reason code G. Do not delay paying your employee.
When do my auto-enrolment duties start?
On the day your first member of staff starts working for you. You must enrol staff aged between 22 and State Pension age who earn at least £10,000 a year and normally work in the UK, and pay a minimum employer contribution of 3% of qualifying earnings, with 8% total.
What must appear on a payslip?
Earnings before and after deductions, the amount of any deduction that changes each time such as tax and National Insurance, and the number of hours worked if pay varies with time worked. Payslips must be provided on or before payday and can be printed or electronic.
Getting the first pay run right
The sequence matters. Register in the right window, run the right-to-work check before employment starts, file the first FPS on or before payday, and get auto-enrolment running from the duties start date rather than three months later.
SmartFiling runs RTI payroll from £15 per employee per month, including auto-enrolment, payslips, P60s and year-end returns. Fixed fee, entirely online, reviewed by an ICAEW Chartered Accountant.
