Your first employee: the five forms, in order
A plain checklist for the week you stop doing everything yourself.
Taking on staff triggers a short list of legal steps
Before day one, you need to register as an employer with HMRC, set up PAYE, get Employers' Liability insurance, and have a written statement of terms ready. None of it is hard; the order matters.
The real cost is about 1.2× the salary
Budget beyond the wage: employer's National Insurance, pension contributions and holiday pay add roughly 15–20% on top. Knowing the true number stops a hire from quietly sinking your margin.
Do these five things, in order
Give yourself a week. Most of it is online and free; the insurance is the only thing you can't skip.
- ✓Register as an employer with HMRC (allow up to 5 days)
- ✓Set up PAYE, or hand it to your accountant
- ✓Buy Employers' Liability insurance
- ✓Write the statement of terms and a simple contract
- ✓Enrol them in a workplace pension
Maximum fine for trading without Employers' Liability insurance, per day
Source: Employers' Liability (Compulsory Insurance) Act - gov.uk
No - once they're an employee, PAYE applies from the first payment. “Later” is how penalties happen.
Self-taught marketer who started selling online at 17 and went on to freelance for brands across Europe before founding Adlarion. He writes The Small Business Digest in plain English - the news he wishes he'd had when he was starting out.
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