Growing your team is exciting. Finding fresh talent and imparting your business ethos can be rewarding, not just for you but for your employees too.
But no matter how eager you are to get boots on the ground, you must ensure you hire your first employees the right way.
If you’re unsure where to start, this article will act as the ultimate guide on hiring your team.
Register as an employer
Don’t post that job ad on Indeed just yet! You’ll first have to register as an employer with HMRC – even if you’re the only employee. (For example, if you’re the sole director of a limited company.)
You also need to decide what type of employment you’ll offer – part-time or full-time – and how much you’ll pay. The amount you pay staff needs to meet the national minimum wage as a legal requirement.
Don’t forget, as an employer, you’ll need to register for employers’ liability insurance. This is also a legal requirement and will help to cover any fines and compensation should an employee injure themselves while working for you.
You can register as an employer through the Government website. You must register before your employee’s first payday. Give plenty of notice, as getting your employer’s PAYE reference number can take up to 15 working days.
What is PAYE?
PAYE (or pay-as-you-earn) is a system which involves you collecting income tax and National Insurance contributions (NICs) from your teams’ wages as you pay them.
Once you make the calculations, you have to file a PAYE report with HMRC on or before each payday. Most payroll software will work out the contributions for you.
Based on your reports, you’ll have a figure of how much you need to pay HMRC. Some employers pay their PAYE bills monthly, while others (in some circumstances) pay quarterly.
You don’t need to register for PAYE if:
- none of your employees receive over £123 a week
- they don’t receive benefits or expenses
- they don’t receive a pension
- they have another job.
You’ll still need to keep payroll records, even if you aren’t registered for PAYE.
Onboarding an employee
Now you’ve got your payroll and PAYE registration sorted, you’ll have to register your teams’ details on your payroll.
To get an employee on your payroll, you’ll need the following:
- name
- age
- address
- start date
- NI number
- information on any student loans
- their P45 form.
In your payroll software, you’ll also set their working hours and their hourly wage or annual salary. This is also a good time to think about your pension scheme.
What is my workplace pension scheme?
Employers in the UK have to set up a workplace pension scheme for any eligible staff as soon as employment begins. Both you and your employee will contribute to their scheme, at a minimum percentage of your employee’s earnings.
You must enrol all staff who:
- are aged between 22 and the State Pension age
- earn at least £10,000 a year
- normally work in the UK (including people who travel abroad for work).
You can find further information on workplace pension schemes here.
Where do I begin?
There’s more to hiring your first employee than you might think. Correctly registering as an employer and onboarding is essential for your business and HMRC.
Don’t let your payroll put a dampener on what should be an exciting time for your business. Let our experienced payroll department assist you. Contact our team today.