Hiring your first employee changes how your business works. Whether it is a part time admin or a full time hire, as soon as you run payroll, you become an employer. That means legal duties, new costs, and regulatory steps you cannot afford to get wrong. PAYE registration, payroll software, and pension auto enrolment all need to be handled properly from the start. This blog explains what you need to know before hiring someone and how AFG helps you set things up right the first time.

When Do You Need to Register for PAYE?

If you pay an employee £123 a week or more, you must register with HMRC as an employer. This includes paying yourself through a limited company. PAYE (Pay As You Earn) is how HMRC collects Income Tax and National Insurance from employee wages. Even if someone earns below the tax threshold, you still need to record their pay and submit reports.

If you delay registration, you risk penalties. The process is not difficult, but timing matters. You can register up to two months before the first payday.

How to Register as an Employer

You register online with HMRC. To do this, you need your business name, UTR (Unique Taxpayer Reference), and address. Once approved, HMRC issues your PAYE reference. This lets you run payroll, make deductions, and submit reports legally.

You also need to decide how you will manage payroll. Some handle it in house using software. Others outsource it to accountants. AFG supports both. We help clients choose software, configure it, and stay compliant.

Payroll Software and HMRC Submissions

Running payroll is not just about paying staff. You need to:

• Apply correct tax codes

• Record hours, pay, and deductions

• Auto enrol into pensions (if eligible)

• File reports with HMRC every payday

The main report is called an FPS (Full Payment Submission). If you make adjustments, you may also need an EPS (Employer Payment Summary).

Mistakes here are common. Wrong codes, late filings, or missed enrolments. AFG helps clients avoid those errors by setting up payroll systems properly and providing monthly oversight.

Pension Auto Enrolment Requirements

If your employee is:

• Aged between 22 and State Pension age

• Earning over £10,000 per year

• Working in the UK

Then you must auto enrol them in a workplace pension and make contributions. Even part time workers may qualify depending on earnings. You also have to declare your compliance with The Pensions Regulator.

Failure to enrol properly can result in fines. AFG helps clients register with NEST or another qualifying scheme, calculate contributions, and file declarations.

Payslips and Statutory Rights

Employees must receive a payslip on or before payday. It should show gross pay, deductions, and net pay. You also have to meet their statutory rights, including:

• Paid holiday (at least 28 days for full time staff, including bank holidays)

• Statutory Sick Pay (if eligible)

• Maternity and paternity leave

• National Minimum Wage compliance

• Working time limits (unless the employee opts out)

Overlooking any of these can lead to problems. Financial, legal, or reputational. AFG helps clients stay on top of these duties with guides, templates, and ongoing support.

Payroll Deadlines You Must Not Miss

You must report payroll data to HMRC each time you pay employees, and submit payment of tax and National Insurance monthly. The key deadlines are:

• FPS: On or before the employee gets paid

• PAYE payment: By the 22nd of the following tax month (or the 19th if paying by post)

Late submissions trigger penalties and interest. AFG clients get payroll calendars and deadline reminders to keep everything on track.

Avoiding Common First Time Employer Errors

Most issues at this stage come from simple missteps:

• Forgetting to register for PAYE in time

• Using incorrect tax codes

• Paying without issuing payslips

• Ignoring pension enrolment duties

• Missing monthly submission deadlines

These are avoidable with the right setup and support. AFG works with first time employers to put proper systems in place and prevent these problems from happening.

What to Consider Before You Hire

Before making an offer, ask yourself:

• Can you afford the ongoing tax, pension, and payroll costs?

• Will the role be full time or part time?

• Do you understand your duties around holiday pay, leave, and sick pay?

• How will you monitor hours and performance?

Thinking through these questions helps you avoid rushed decisions and build a role that works for you and your employee.

How AFG Helps First Time Employers

At Allied Financial Group, we guide small businesses through their first hire and beyond. Our PAYE and payroll service includes:

• PAYE registration

• Payroll software setup or managed payroll

• Pension enrolment and compliance declaration

• Payslip setup and recordkeeping

• Monthly reporting and deadline management

We also help with employment contracts, policies, and HMRC correspondence. If you need more support as you grow, we offer full service accounts, tax, HR admin, and business advice.

Start Strong as an Employer

Bringing on your first employee is not just about growth. It is about doing things properly from day one. PAYE registration, payroll, and pensions all come with rules. Miss them and you risk penalties or unhappy staff. AFG helps make sure your setup is clean, compliant, and ready to scale. If you are ready to hire, we are ready to help.