Taking on your first employee: a payroll checklist

By Becky Cooper, founder of Buffalo Payroll (CIPP Foundation Degree in Payroll Management). Last reviewed 13 October 2026.

Before they start

1. Register as an employer with HMRC. You must register before the first pay day, and it can take up to 5 working days to get your PAYE reference. See GOV.UK: register as an employer.
2. Check their right to work in the UK and keep a record.
3. Decide their pay, making sure it meets the National Minimum Wage: £12.71 an hour for workers aged 21 and over from April 2026.
4. Get employer's liability insurance, which is required by law for most employers.
5. Issue a written statement of employment particulars by their first day.

Setting up payroll

1. Collect their details: full name, address, date of birth, National Insurance number, bank details and either a P45 or a completed new starter checklist.
2. Choose how to run payroll: HMRC-recognised software, or an outsourced bureau like us.
3. Agree a pay date and frequency. Monthly is simplest for most small businesses.
4. Report to HMRC on or before every pay day using a Full Payment Submission.
5. Give them a payslip every time they're paid.
6. Pay HMRC tax and National Insurance by the 22nd of the following tax month (if paying electronically).

Workplace pension

Your auto-enrolment duties start on your employee's first day. You must assess them, enrol them if they're eligible, write to them and declare compliance with The Pensions Regulator within five months. TPR's new employer guidance walks through it. Our pension service handles it for you.

Check if you can claim the Employment Allowance

Eligible employers can reduce their employer National Insurance bill by up to £10,500 in 2026/27. See GOV.UK: Employment Allowance.