by Asim Abbas
11 November 2026 
Hiring your first employee: a payroll checklist
Hiring your first employee: a payroll checklist
Taking on your first employee is a big step. As well as finding the right person, you take on legal duties for pay, tax, pensions and right-to-work checks.
- Check their right to work before they start
- Register as an employer with HMRC before the first payday
- Pay at least the National Living Wage of £12.71 an hour for 21+
- Get employer’s liability insurance and set up a pension
Most of it is straightforward once set up, but missing a step can mean fines or backdated contributions.
This checklist covers everything you need to do before, on and after your employee’s first day.
Before they start
- Decide the pay: at least the minimum wage for their age
- Check right to work: see and copy original documents or use the online share code
- Register as an employer with HMRC, up to four weeks before the first payday
- Buy employer’s liability insurance, usually at least £5 million cover
- Issue a written statement of employment terms by the first day
| Age | Minimum hourly rate from April 2026 |
|---|---|
| 21 and over (National Living Wage) | £12.71 |
| 18 to 20 | £10.85 |
| Under 18 and apprentices | £8.00 |
Setting up payroll
You must run payroll through HMRC-recognised software and send a Full Payment Submission on or before each payday. Ask for the employee’s P45 or complete a starter checklist so their tax code is right. Each month, pay HMRC the PAYE and National Insurance by the 22nd if paying electronically.
The true cost of an employee
An employee on £26,000 costs you employer National Insurance of 15% on £21,000, which is £3,150, plus at least 3% employer pension on qualifying earnings, around £590. That’s a total cost of about £29,700, before the Employment Allowance.
National Insurance calculator
See employer NI on any salary.
Workplace pension
You must automatically enrol employees aged 22 or over earning more than £10,000 a year into a workplace pension, contribute at least 3% of qualifying earnings and complete a declaration of compliance with The Pensions Regulator. Your duties start from the employee’s first day.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Can you claim the Employment Allowance?
The Employment Allowance reduces employer National Insurance by up to £10,500 a year. It isn’t available if your only employee is a director of the company, but taking on a first non-director employee usually makes you eligible.
After they start
- Give payslips every payday
- Track holiday: 5.6 weeks a year for full-time staff
- Pay statutory sick, maternity or paternity pay when due
- Give a P60 after each tax year and report benefits in kind on P11Ds
HMRC’s checklist is on GOV.UK. Our payroll services handle registration, monthly payroll and auto-enrolment.
What should I do next?
Before day one.
Up to four weeks before payday.
Software and auto-enrolment.
Our payroll service runs it monthly.
Frequently Asked Questions
When should I register as an employer?
Up to four weeks before your first payday. You can’t register more than two months before you start paying people.
What is the minimum wage in 2026?
£12.71 an hour for workers 21 and over, £10.85 for 18–20, and £8.00 for under 18s and apprentices, from 1 April 2026.
Do I need employer’s liability insurance?
Yes, for almost all employees, with cover of at least £5 million from an authorised insurer.
Can I claim the Employment Allowance for my first employee?
Usually yes, unless the only employee paid above the threshold is a company director.
Can Wingate run my payroll?
Yes. We register you as an employer and run payroll, pensions and RTI submissions every pay period.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
