Choose how to run payroll
You can operate PAYE by either:
- paying a payroll provider to do it for you
- doing it yourself using payroll software
Paying a payroll provider
If you decide to pay a payroll provider (for example, a bureau or accountant) to run your payroll, you’ll need to consider how much support you’ll need.
You’re responsible for collecting and keeping records of your employee’s details. Your payroll provider will need these to run payroll for you.
Some payroll providers can offer you more support if you need it, for example keeping employee records, providing payslips and making payments to HM Revenue and Customs (HMRC).
As an employer, you’re legally responsible for completing all PAYE tasks - even if you pay someone else to do them.
Running payroll yourself
You need to complete certain tasks to set up payroll and pay your employees for the first time. This includes registering as an employer with HMRC and telling them about your employees.
Exemptions to online reporting
You may be exempt from reporting payroll online if:
- you’re prevented from using a computer on religious grounds
- you’re getting care or support services for yourself or a member of your family
- you’re unable to send reports electronically because you’re disabled, elderly or can’t access the internet
HMRC has guidance if you believe you’re exempt and would prefer to report on paper.
Step 1 Decide what type of employee you need
and Check you can afford to take on employees
- Check how much the National Minimum Wage is
- Find out how much National Insurance you need to pay for your employees
- Check how much sick pay your employees are eligible for
- Check how much you need to pay towards your employee's pension
- Check how much Maternity Leave you need to pay your employees
- Check how much Paternity Leave you need to pay your employees
Step 2 Make your workplace safe and accessible for employees
- Prevent discrimination
- Make your workplace accessible for employees with disabilities or health conditions
- Keep employee information and data safe
- Fire safety
- Health and safety
You also need to make checks when you recruit and employ someone.
Step 3 Register as an employer and set up PAYE
You need to register with HMRC so you can pay tax and national insurance for your employees.
Step 4 Check your responsibilities around workplace pensions
Step 5 Get Employers' Liability insurance
Step 6 Recruit and employ staff