A guide for employers: Enrolling a new employee on your payroll and other financial considerations

As an employer, there is a lot to think about when taking on a new employee. It is also important to consider the financial side of taking on a new employee to make sure you can commit to paying them every month.

We have put together a guide on how to get set up with payroll and PAYE, as well as some other things you should consider when hiring a new employee.

Payroll & PAYE

When you take on a new employee, you are committing to paying them a set minimum amount every month, regardless of whether you have any work for them to do. This means it is important to make sure you have sufficient reserved funds to keep both of you afloat if you do so happen to go through a dry patch.


When you take on a new employee, you need to take the following steps to get them set up on your books:


1. Register as an employer with HMRC and get a login for PAYE online – this is how you report the tax and NI that your employee suffers.


2. Decide how you will run your pay roll – you can use the basic PAYE tool HMRC offers but this does not provide you with payslips or deal with pensions. The alternative is a payroll software that you can use for low fees.


3. You need to submit the PAYE information to HMRC on or before every payment to your employee. If you pay them weekly, it is a weekly submission, or if you pay them monthly, it is a monthly submission. This is known as RTI (Real Time Information) submissions.


4. When you do your first submission, you will tell HMRC who your new employee is and when they started. After this, each submission will advise HMRC of how much you are paying the member of staff and how much tax and NI is being deducted.


5. HMRC needs to be paid the tax and NI on a monthly or quarterly basis, which is dependent on how big the deductions are – this is your P30. If the payment being made to HMRC is less than £1500 per month, you can pay quarterly, so most small businesses will fall under this.


Other considerations…


Here are some things you should think about when taking on a new employee:



We do hope this guide has been helpful when taking on a new employee. If you need any help or advice on anything relating to payroll, P30s or financial factors surrounding employing people, please get in touch with our team and we’ll be happy to guide you through the process.