You must tell HM Revenue and Customs ( HMRC ) when you take on a new employee and be registered as an employer . This guide is also available in Welsh (Cymraeg) . Before you pay your new starter follow these steps. Check you need to pay them through PAYE . Get employee information to work out their tax code - if you do not have their P45, use HMRC ’s ‘starter checklist’ (which replaced the P46). Find out if they need to repay a student loan . Use these details to set up your new employee in your payroll software. Register your employee with HMRC using a Full Payment Submission ( FPS ). You must also follow the same steps as when you employ someone , for example checking if they can work in the UK.

Check you need to pay someone through PAYE

You usually have to pay your employees through PAYE if they earn £96 or more a week (£417 a month or £5,000 a year). You do not need to pay self-employed workers through PAYE . Working out if someone is an employee or self-employed As a general rule, someone is: employed if they work for you and do not have any of the risks associated with running a business self-employed if they run their own business and are responsible for its success or failure You must check each worker’s employment status to make sure they’re not self-employed. If you get it wrong you may have to pay extra tax, National Insurance, interest and a penalty. Temporary or agency workers You need to operate PAYE on temporary workers that you pay directly, as long as they’re classed as an employee. You do not need to operate PAYE if a worker is paid by an agency, unless the agency is based abroad and does not have either: a trading address in the UK a representative in the UK There are special rules for harvest workers or shoot beaters employed for less than 2 weeks. Employees you only pay once You operate PAYE differently for employees you only pay once. Set up a payroll record with their full name and address. If you give them a payroll ID, make sure it’s unique. When you send your Full Payment Submission ( FPS ): use tax code ‘0T’ on a ‘Week 1’ or ‘Month 1’ basis put ‘IO’ in the ‘Pay frequency’ field do not put a start or leaving date Give your employee a statement showing their pay before and after deductions, and the payment date, for example a payslip or a letter. Do not give them a P45. Volunteers You do not need to operate PAYE on volunteers if they only get expenses that are not subject to tax or National Insurance - check if their expenses are affected . Students Operate PAYE on students in the same way as you do for other employees.

Get employee information

You need to get certain information from your employee so you can set them up with the correct tax code and starter declaration on your payroll software. You’ll usually get most of this information from the employee’s P45, but they’ll have to fill in a ‘ starter checklist ’ (which replaced the P46 form) if they do not have a recent P45. You’ll need your employee’s: date of birth gender full address start date From your employee’s P45, you’ll need their: full name leaving date from their last job total pay and tax paid to date for the current tax year student loan deduction status National Insurance number existing tax code You must keep this information in your payroll records for the current year and the 3 following tax years. If your employee does not have a P45 Ask your employee to complete a ‘starter checklist’ if you do not have their P45, or if they left their last job before 6 April 2024. If your employee has more than one P45 You should use the P45 with the latest date and give the other one back to the employee. If they have the same leaving date, use the P45 with the highest tax free allowance (or least additional pay for a K code ) and give the other one back to the employee. Work out your employee’s tax code When you’ve got your employee’s information, you can use this tool to: work out their tax code and starter declaration find out what else to do before you pay your employee for the first time Work out your employee’s tax code Employees you only pay once and secondments from abroad There’s a different way to work out tax codes for employees who you only pay once or who are seconded from abroad .

Student loan repayments

You should make student loan deductions if any of the following apply: your new employee’s P45 shows that deductions should continue your new employee tells you they’re repaying a student loan or a postgraduate loan, for example on a starter checklist HM Revenue and Customs ( HMRC ) sends you form SL1 or form PGL1 and your employee earns over the income threshold for their loan What you need to do You should follow these steps even if your employee has a P45 from their last job. Ask your new employee if they have a student loan or a postgraduate loan - they may have both. If they finished their studies after 6 April in the current tax year, they will not start to repay their loan until the next tax year. Record their answer in your payroll software. You do not need to calculate their loan recovery repayments - your payroll software will do this for you. If your employee has a student loan, ask them to sign in to their repayment account and check which plan to use for deductions. They can contact the Student Loans Company if they’re still not sure. If they cannot tell you, use Plan 1 in your payroll software until you get a student loan start notice (SL1). Where the employee is on more than one plan, start deductions for the plan with the lowest recovery threshold until you get an SL1. Check the student loan recovery thresholds. Report these deductions to HMRC when you pay your employee. Special rules In some cases there are special rules for making student loan deductions. Examples include: you’re sent a court order to collect a debt directly from your employee’s earnings you change how often you pay your employee, such as from weekly to monthly the employee has more than one job with you and you need to aggregate earnings Stopping deductions HMRC will tell you if you need to stop making loan deductions from your employees’ pay. They’ll send you: form SL2 for student loans form PGL2 for postgraduate loans Do not stop making deductions if an employee asks you to.

Registering your new employee

Register your new employee with HM Revenue and Customs ( HMRC ) by including their details on a Full Payment Submission ( FPS ) the first time you pay them. On this FPS , include: information you’ve collected from them the tax code and starter declaration that you’ve worked out pay and deductions (for example tax, National Insurance and student loan deductions ) since they started working for you - do not include figures from their previous job Giving your employee a payroll ID You can assign payroll IDs to your employees. The ID must be unique - so use a different one if: you re-employ someone - if you do this within the same tax year restart their year-to-date information from ‘£0.00’ an employee has more than one job in the same PAYE scheme If you re-use a previous payroll ID, you’ll create a duplicate record and report payroll incorrectly. Special rules There are special rules for making deductions for: female employees entitled to reduced National Insurance employees you only pay once harvest workers and casual beaters certain employees with more than one job

Late P45 or starter checklist

You may need to update your payroll records if your employee gives you a P45 or starter checklist after you’ve registered them with HM Revenue and Customs ( HMRC ). You only need a starter checklist from your employee to work out their tax code if either: they do not have a P45 they left their last job before 6 April 2024 If HMRC has sent you a tax code Use the tax code that HMRC has sent you if your employee gives you a P45 or starter checklist after you’ve first paid them. Deduct any student loan repayments from the date your employee started with you. If HMRC has not sent you a code Late P45 Use your employee’s P45 to work out their tax code and update their details in your payroll software. If your employee left their last job after 5 April 2024, you should also update both of the following fields in your payroll software: ‘Total pay to date’ ‘Total tax to date’ Do this for the first week you included this information. If your software finds errors, update the fields with the correct figures. Late starter checklist Use your employee’s starter checklist to update the starter declaration in your payroll records. Keep using the tax code you used in your first Full Payment Submission ( FPS ) until HMRC sends you a new one. When you next pay your employee Do not enter another start date on the FPS , even if you have not reported a start date before.

Tell HMRC about a new employee

Overview

You must tell HM Revenue and Customs (HMRC) when you take on a new employee and be registered as an employer.

This guide is also available in Welsh (Cymraeg).

Before you pay your new starter follow these steps.

Check you need to pay them through PAYE.
Get employee information to work out their tax code - if you do not have their P45, use HMRC’s ‘starter checklist’ (which replaced the P46).
Find out if they need to repay a student loan.
Use these details to set up your new employee in your payroll software.
Register your employee with HMRC using a Full Payment Submission (FPS).

You must also follow the same steps as when you employ someone, for example checking if they can work in the UK.

View a printable version of the whole guide

Step 1 Check this process is right for you
Follow these steps if you're taking on someone with the employment status of 'employee'.
1. Check who counts as an employee
There are other steps you may need to take first if you have not employed someone before.
1. Get ready to employ someone for the first time
The rules are different if you want to take on someone with another type of employment status, such as agency staff, freelancers, consultants and contractors.
1. Check your responsibilities when you take on someone with a different employment status and contract type
Step 2 Recruit someone
You need to advertise the role and interview candidates. You can use a recruitment agency to do this or do it yourself.
1. Find out about recruiting someone yourself on Acas
As an employer you must make sure you recruit employees fairly.
1. Avoid discrimination during recruitment
2. Make your application process accessible for employees with disabilities or health conditions
and Check they have the right to work in the UK
1. Find out how to check an applicant's right to work
and Find out which DBS check is right for your employee
You may need to check if someone has a criminal record, for example, if they'll be working in healthcare or with children. This is known as a Disclosure and Barring Service (DBS) check.
1. Find out which DBS check is right for your employee
2. How to do a DBS check
Step 3 Check if they need to be put into a workplace pension
1. If you’re employing someone for the first time, use The Pensions Regulator’s tool to find out what you need to do
1. If you already employ people, check your ongoing duties on The Pensions Regulator website
Step 4 Agree a contract and salary
When someone accepts a job offer they have a contract with you as their employer.
Step 5 Tell HMRC about your new employee
You must tell HMRC about your new employee on or before their first pay day.

Tell HMRC about a new employee

Overview

Step 1 Check this process is right for you

Step 2 Recruit someone

and Check they have the right to work in the UK

and Find out which DBS check is right for your employee

Step 3 Check if they need to be put into a workplace pension

Step 4 Agree a contract and salary

Step 5 Tell HMRC about your new employee

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Tell HMRC about a new employee

Overview

This page is Part of Employ someone: step by step

Step 1: Check this process is right for you

Step 2: Recruit someone

and Check they have the right to work in the UK

and Find out which DBS check is right for your employee

Step 3: Check if they need to be put into a workplace pension

Step 4: Agree a contract and salary

Step 5: Tell HMRC about your new employee

Is this page useful?

Help us improve GOV.UK

Help us improve GOV.UK

Step 1 Check this process is right for you

Step 2 Recruit someone

Step 3 Check if they need to be put into a workplace pension

Step 4 Agree a contract and salary

Step 5 Tell HMRC about your new employee