Hiring Your First Employee

There are several legal steps you must complete before your new employee begins work:

• Right to work check: You must check that the individual has the legal right to work in the UK and retain a copy of the evidence (see our right to work guide). This must be done before they start — a post-start check does not provide a statutory excuse if it later emerges the person did not have the right to work.
• Register as an employer with HMRC: Register for PAYE at least four weeks before the first payday. HMRC will issue you with a PAYE reference number and employer login. Use PAYE software (or a payroll provider) to run payroll and submit RTI data to HMRC.
• Employers' liability insurance: Obtain a policy with at least £5 million of cover before day one. Display the certificate at your workplace.
• Written statement of particulars: Prepare an employment contract or written statement of particulars. Since April 2020, this must be provided on or before the employee's first day.

The written statement of particulars is legally required from day one. It must include:

• Employer's and employee's name
• Start date and any previous service that counts towards continuous employment
• Job title or job description
• Place of work
• Remuneration — pay rate, frequency of payment
• Working hours
• Holiday entitlement (and holiday pay)
• Sick pay arrangements
• Notice periods (both employer and employee)
• Pension details (or a note that a workplace pension will be auto-enrolled)
• Whether a collective agreement applies
• Details of any probationary period

Additional terms — such as confidentiality clauses, post-termination restrictions, or details of other benefits — should also be included if relevant. Keep a signed copy of the contract in the employee's personnel file.

Every employer must automatically enrol eligible employees into a qualifying workplace pension scheme. Auto-enrolment obligations apply from your first employee's start date — there is no grace period for new employers.

You must automatically enrol an employee if they:

• Are aged 22 or over and under state pension age
• Earn more than £10,000 per year (£192 per week, £833 per month)
• Work in the UK

The minimum total pension contribution is currently 8% of qualifying earnings, of which you must contribute at least 3%. The employee contributes at least 5% (including tax relief). You must:

• Choose a qualifying pension scheme (such as NEST, which is free for employers)
• Enrol eligible employees within six weeks of their start date
• Write to new employees within six weeks, explaining their auto-enrolment
• Declare your compliance with The Pensions Regulator within five months of your first duties date

Once you have made the initial steps, there are ongoing obligations to maintain:

• Payroll: Run payroll on each payday, submit RTI data to HMRC, and pay over PAYE and NI contributions by the 22nd of each month (if paying electronically)
• Payslips: Provide a written payslip on or before each payday, itemising all deductions
• Employment records: Maintain personnel files, payroll records, and right to work documentation
• Health and safety: Once you have employees, additional health and safety obligations apply — see our health and safety guide
• Minimum wage: Ensure pay rates are reviewed each April when NMW rates increase
• Holiday: Manage and track annual leave entitlement
• Re-enrolment: Every three years you must re-enrol any employees who previously opted out of the pension scheme