Guide

Register as an employer (PAYE)

How to register with HMRC as an employer before your first payday.

Manufacturing & EngineeringConstruction & PropertyRetail & Consumer GoodsTechnology & Digital UK-wide

You must register as an employer with HMRC before your first payday if you're employing anyone. This applies whether your employee works full-time, part-time, temporarily, or casually.

When you must register

Register if you employ someone and:

  • Pay them £96 or more per week (2025/26 threshold)
  • Give them expenses or benefits
  • They have another job or receive a pension
  • They're on a contract lasting longer than one week

Start 4 weeks before first payday to allow time for HMRC to send activation codes by post.

What you'll receive after registration

PAYE reference number
Format: 123/AB45678 - Received immediately online, use for all payroll submissions
Accounts Office reference
Separate 13-character reference for HMRC correspondence about your PAYE account
Employer PAYE activation code
Posted within 10 working days - needed to file online and access your PAYE account
Online account access
Sign in with Government Gateway - view PAYE account, file returns, make payments

Setting up payroll

After registration, you must:

1. Choose payroll software

Use HMRC-approved Real Time Information (RTI) software to:

  • Calculate tax and National Insurance
  • Submit Full Payment Submission (FPS) to HMRC on or before each payday
  • Track employee records and statutory payments

Popular options: Xero Payroll, QuickBooks Payroll, Sage Payroll, FreeAgent, BrightPay (free for up to 3 employees).

2. Submit Full Payment Submission (FPS)

On or before each payday: Submit FPS telling HMRC how much you're paying employees and how much tax/NI you're deducting.

Late submission penalty: £100 per month (1-50 employees), escalating for larger employers.

3. Pay HMRC monthly

By 22nd of following month (19th if paying by post): Pay all tax and National Insurance deducted from employees, plus employer NI.

Late payment penalty: Charges and interest apply.

Ongoing employer obligations

Once registered, you have regular reporting and payment duties to HMRC:

  1. Submit FPS on or before each payday

    Real Time Information (RTI) requires you to report payroll information to HMRC on or before paying employees. Late submission penalty: £100/month for small employers.

  2. Pay HMRC monthly by the 22nd

    Pay all tax and National Insurance deducted from employees, plus employer NI, by the 22nd of the month following payday (19th if paying by post). Late payment incurs interest and penalties.

  3. Provide payslips on or before payday

    Give employees itemised payslip showing gross pay, deductions (tax, NI, pension, student loan), and net pay. Can be printed or electronic.

  4. Issue P60s by 31 May

    Provide P60 annual summary to all employees who were on payroll at 5 April, showing total pay and deductions for the tax year.

  5. Submit P11D by 6 July (if applicable)

    If you provide expenses or benefits (company car, medical insurance, private fuel), report them to HMRC on form P11D. Also submit P11D(b) for Class 1A National Insurance.

  6. Keep payroll records for 3+ years

    Maintain records of pay, tax, NI, statutory payments (SSP, SMP), and employee details for at least 3 years after end of tax year they relate to.

Employment Allowance

You can claim Employment Allowance to reduce your employer National Insurance bill by up to £10,500 per year (from April 2025, up from £5,000).

Eligibility

You can claim if:

  • Your employer NI bill was less than £100,000 in previous tax year
  • You employ at least one person (other than yourself if director/sole trader)

Cannot claim if:

  • You're the only employee and also director/owner
  • You employ someone for personal, household, or domestic work
  • Your employer NI was £100,000+ in previous year

How to claim: Claim through your payroll software when submitting first EPS (Employer Payment Summary) of tax year.

Employment Allowance 2025/26
£10,500 per year (increased from £5,000)
Eligibility threshold
Employer NI below £100,000 in previous tax year
Claim method
Via payroll software when submitting EPS
Saving for small employer
Can reduce employer NI bill to zero if you employ 1-2 people

Register as an employer with HMRC

Mandatory hiring requirements

Every employer obligation from pre-hire through the first month of employment. Covers right to work checks, written statements of particulars, employers' liability insurance, PAYE registration, auto-enrolment pensions, and DBS checks where required.

Read guide

Close your PAYE scheme

How to permanently close your PAYE scheme with HMRC, including final FPS submission, issuing P45s to all employees, paying outstanding tax and National Insurance, and understanding scheme reopening rules.

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