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Employing for the first time

Taking on staff is a big commitment that you want to get right.

New staff typically use up time and money. You need to recruit and train them and understand your legal obligations towards them.

As an employer you’ll have to ensure your employees pay the correct tax and National Insurance contributions (NICs) using the PAYE (Pay as you Earn) system. You will also have to make your own payment of Employers National Insurance, an additional cost for every employee you take on and should be planned into your budget.

Before you start looking for a new employee, it’s worth considering what the best solution is to meet your need. If you have a short-term requirement you might be better off getting help from a freelance or consultant and if you do decide to recruit, you might just want a temporary worker – perhaps from an agency – or someone to work part-time. You will also need to be clear about what you want the person to do and what skills they will need.

Your legal obligations as an employer include things such as:

  • Registering with HM Revenue & Customs (HMRC)
  • Operating a PAYE (Pay As You Earn) system to deduct tax and National Insurance from your employees’ wages, and pay employers National Insurance *
  • Providing your employee with a Written Statement of Employment (an employment contract)
  • Paying your employee correctly: no less than the National Minimum Wage (click this link minimum wage rates for more information) and including the correct information on pay slips.
  • Understanding sickness, maternity and paternity pay, Working Time regulations and annual leave entitlement.
  • Health & Safety

You may need to write employment policies so that you and your employees are clear on how your business operates.

Links on the right hand side of this page provide more guidance and information.

*You may wish to operate the PAYE scheme yourself. It’s fairly easy if you have time and a small number of employees. However you could choose to pay an agent to do it on your behalf, many accountants offer PAYE and payroll services.

Related links

Employing for the first time:

Information on the national Government website
https://www.gov.uk/employing-staff

Guidance on getting started and where to register as an employer
https://www.gov.uk/register-employer

Register free to access online advice seminars with HM Revenue & Customs
https://www.gov.uk/government/news/webinars-emails-and-videos-on-employing-people#9

http://www.hmrc.gov.uk/courses/syob2/employer/index.htm

Guidance on getting started with Workplace Pensions (Click here to go to the page on this site that gives a more complete overview of Auto Enrolment and workplace pensions)

www.tpr.gov.uk/employers

See guidance on employing, managing and disciplining staff on the ACAS website:-
http://www.acas.org.uk