How to Register as an Employer in the UK (2026)

Taking on your first employee — or paying yourself a salary through your own company — means you need to register as an employer with HMRC and run PAYE payroll. This guide walks UK small businesses through registration in 2026, then the duties that start on day one: employer National Insurance after the April 2025 rise, the Employment Allowance, Real Time Information reporting, pension auto-enrolment, right-to-work checks and employers' liability insurance — with costs in pounds.

Quick answer

Register online with HMRC as an employer before your first payday (but not more than two months before). HMRC sends an employer PAYE reference and Accounts Office reference. You then run payroll in HMRC-recognised software, report each pay run on or before payday, and pay HMRC by the 22nd of the next month.

• Employer NI is 15% on pay above £5,000 a year (since 6 April 2025)

• The Employment Allowance cuts that bill by up to £10,500 a year for most small employers

• Auto-enrol staff aged 22+ earning over £10,000: at least 3% from you, 8% in total

• Check right to work before day one and hold at least £5 million of employers' liability insurance

Who needs to register as an employer?

You normally need to register with HMRC when you start employing staff. That includes:

• Sole traders and partnerships hiring their first employee — your own profits stay in Self Assessment, but staff go through PAYE.
• Limited companies, even if the only person paid is yourself as sole director.
• Construction contractors paying subcontractors under the Construction Industry Scheme.

Registration is free. You must register before the first payday, and you can't register more than two months before you start paying people. If you need to pay someone urgently, apply as early as that window allows, because HMRC sends your references by post.

Not everyone you pay is an employee. Genuinely self-employed contractors invoice you and handle their own tax. Getting employment status wrong can leave you owing PAYE and National Insurance, so check status before you decide how to pay someone.

Employer numbers for 2026-27

15%

Employer NI rate

13.8% before April 2025

£5,000

Secondary threshold

Per employee, per year

£10,500

Employment Allowance

Off your employer NI bill

£12.71 an hour

National Living Wage

Age 21+, from 1 April 2026

How to register as an employer with HMRC

Register for PAYE in five steps

1. 1

   Confirm your employee and first payday

   Check the person is an employee (not self-employed), agree their pay — at least the minimum wage for their age — and fix the first payday.

2. 2

   Register online with HMRC

   Limited companies with 1 to 9 directors can register online. Other businesses, including sole traders and partnerships, follow the route GOV.UK sets out for their business type. You'll need your business details, your UTR or company registration number, and the date you'll first pay someone.

   Register as an employer
3. 3

   Receive your PAYE references

   HMRC posts your employer PAYE reference and your Accounts Office reference — you need the first for payroll and the second when paying HMRC.

   Tip: Check HMRC's expected reply times if your letter hasn't arrived. Don't run payroll until you have the references.

4. 4

   Choose payroll software

   You must use payroll software that reports PAYE information online. Pick one from HMRC's recognised list, or use a payroll bureau or accountant.

5. 5

   Set up the new starter

   Collect the employee's P45 from their last job, or ask them to complete HMRC's starter checklist. Add them to payroll with their National Insurance number, date of birth and address.

Once registered, your HMRC business tax account shows the PAYE scheme, what you owe and any Employment Allowance claim.

Running payroll: Real Time Information (RTI)

Payroll in the UK is reported to HMRC in real time. Every time you pay staff, your software sends a Full Payment Submission (FPS) on or before payday, showing each person's pay, tax, National Insurance and pension deductions. That holds even if you pay HMRC quarterly.

The monthly PAYE cycle

Payday

Pay staff and send the FPS on or before this date

10th of next month

See what you owe in your HMRC business tax account

19th of next month

Send an Employer Payment Summary (EPS) to claim reductions such as the Employment Allowance or statutory pay recovery

22nd of next month

Pay HMRC electronically (19th if paying by post)

Employers with a small PAYE bill may be able to pay HMRC quarterly, but the FPS still goes in every payday. Give each employee a payslip showing gross pay, deductions and net pay — your HMRC-recognised payroll software produces these for you. At year end (5 April), send your final FPS and give everyone employed on that date a P60 by 31 May.

Employer National Insurance after the April 2025 changes

On top of the salary, you pay employer (secondary Class 1) National Insurance. From 6 April 2025 the government made three changes that still apply in 2026:

• The rate rose from 13.8% to 15%.
• The secondary threshold — the pay per employee above which you start paying — fell from £9,100 to £5,000 a year (£96 a week). It's fixed until 5 April 2028.
• The Employment Allowance more than doubled, from £5,000 to £10,500, and the rule excluding employers with more than £100,000 of employer NI in the previous year was removed.

Employees pay their own National Insurance — 8% on earnings between £12,570 and £50,270 — which you deduct through payroll along with Income Tax.

Who can claim the Employment Allowance?

Most businesses and charities can, provided you do less than half your work in the public sector. You can't claim if:

• you're a company where the only employee paid above the secondary threshold is a director — a one-person company paying its director a salary gets nothing;
• the employee is a domestic worker such as a nanny or gardener (care and support workers are an exception);
• another company in your connected group already claims it — only one can.

Claim through your payroll software with an EPS. You can claim it against one PAYE scheme only.

Worked example: what your first employee costs in 2026-27

Sam runs a café and hires a full-time barista aged 25 on the National Living Wage: 37.5 hours × 52 weeks × £12.71 = £24,784.50 a year.

With one employee, the Employment Allowance wipes out employer NI entirely. With four, Sam pays £1,370.70 of employer NI. Under the pre-April-2025 rules (13.8% above £9,100, £5,000 allowance), the same four salaries would have cost about £3,657.84 in employer NI — so many small employers pay less now, while larger payrolls pay more.

Pension figures are approximate because qualifying earnings are worked out each pay period. Add employers' liability insurance and any payroll software or bureau fee.

Workplace pension auto-enrolment

Your pension duties begin on your duties start date — the day your first employee starts work, not when you register for PAYE.

• Who to enrol: staff aged 22 up to State Pension age who earn over £10,000 a year (£833 a month) and normally work in the UK. Others can opt in or ask to join.
• Minimum contributions: 8% of qualifying earnings — pay between £6,240 and £50,270 — with at least 3% from you.
• Tell staff in writing within six weeks.
• Declaration of compliance with The Pensions Regulator within five months of your duties start date — even if nobody needs enrolling.
• Re-enrolment every three years: put back anyone who opted out and redeclare.

Choose a qualifying scheme before the first payday. Employees can opt out after being enrolled, but you must not encourage them to.

Right-to-work checks and employers' liability insurance

Right to work

Before someone starts, check they have the right to work in the UK. Either check original documents in their presence and keep dated copies, or — if they give you a share code — use the Home Office online checking service, in which case you don't also need to check documents. Keep copies for the whole employment and for two years after the person leaves.

If you skip the check and the person has no right to work, you face a civil penalty of up to £60,000 per illegal worker. Knowingly employing an illegal worker can mean up to five years in prison and an unlimited fine. Making the correct check before employment starts gives you a statutory excuse against the civil penalty.

Employers' liability insurance

You must have employers' liability (EL) insurance as soon as you become an employer, from an authorised insurer, covering at least £5 million. You can be fined £2,500 for every day you're not properly insured, and £1,000 if you don't display the certificate where staff can see it (a website or intranet counts). Businesses employing only close family members, or only staff based abroad, may be exempt.

Other duties from your first hire

• Minimum wage. From 1 April 2026: £12.71 an hour at 21 and over, £10.85 an hour at 18 to 20, and £8.00 an hour for under-18s and apprentices.
• Written statement of employment particulars. Agree one with every employee.
• Statutory Sick Pay. Since 6 April 2026 SSP is payable from the first full day of sickness, with no Lower Earnings Limit. It's £123.25 a week or 80% of average weekly earnings, whichever is lower — update your absence policy.
• Health and safety. Carry out a risk assessment of what could harm your staff and how you'll control it.
• DBS checks if the role involves work with children or vulnerable adults.

Before your first employee's first payday

0/9

• Employment status confirmed (employee, not self-employed)
• Right-to-work check done and record kept
• Registered as an employer; PAYE and Accounts Office references received
• HMRC-recognised payroll software set up
• P45 or starter checklist collected
• Employers' liability insurance in place and certificate displayed
• Qualifying workplace pension scheme chosen
• Written statement of employment particulars issued
• Pay at or above the minimum wage for the employee's age

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Official links

• Register as an employerHMRC PAYE registration
• Rates and thresholds for employers 2026 to 2027NI, statutory pay, minimum wage
• Claim Employment AllowanceEligibility and how to claim
• Running payrollFPS, EPS and payment dates
• Workplace pensions for employersAuto-enrolment duties
• Check a job applicant's right to workDocuments and share codes
• Employers' liability insuranceCover and fines

What to do next

Register with HMRC as soon as you've fixed a start date and first payday, then line up payroll software, insurance and a pension scheme before day one. If you're still deciding how to set up the business, read how to register as a sole trader. Use the budget planner to plan the full cost of employment, including employer NIC and pension contributions.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

When do I need to register as an employer?

Before the first payday for your first employee — and you can't register more than two months before you start paying people. You also need to register if you're the only director of a limited company and pay yourself a salary. HMRC posts your employer PAYE reference and Accounts Office reference, so leave time before payroll day.

How much is employer National Insurance in 2026?

Employer (secondary Class 1) National Insurance is 15% on each employee's earnings above the secondary threshold of £5,000 a year (£96 a week). Both changed on 6 April 2025: the rate rose from 13.8% and the threshold fell from £9,100. The threshold is fixed at £5,000 until April 2028.

Can a small business claim the Employment Allowance?

Most can. It reduces your employer National Insurance bill by up to £10,500 a year, and since April 2025 there's no longer a £100,000 prior-year NIC limit. You can't claim if you're a company whose only employee paid above the secondary threshold is a director, or for domestic staff such as nannies. Claim it through your payroll software.

Do I have to offer a workplace pension to every employee?

You must automatically enrol staff aged 22 to State Pension age who earn over £10,000 a year and normally work in the UK. Minimum contributions are 8% of qualifying earnings, at least 3% from you. Other staff can ask to join. You must complete a declaration of compliance with The Pensions Regulator within five months of your duties start date.

Can a sole trader register as an employer?

Yes. A sole trader registers as an employer in the same way — online with HMRC — and runs PAYE payroll for staff. Your own profits stay in Self Assessment; only employees go through payroll. You take on the same duties as any employer: right-to-work checks, minimum wage, pension auto-enrolment and employers' liability insurance.

What happens if I employ someone without a right-to-work check?

If the person turns out not to have the right to work in the UK, you can face a civil penalty of up to £60,000 per illegal worker. Knowingly employing an illegal worker is a criminal offence with up to five years in prison and an unlimited fine. Doing the correct check before employment starts gives you a defence against the civil penalty.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Register as an employer — HMRC / GOV.UK · accessed 7 October 2026
2. 2.Rates and thresholds for employers 2026 to 2027 — HMRC / GOV.UK · accessed 7 October 2026
3. 3.Changes to the Class 1 NICs secondary threshold, secondary rate and Employment Allowance from 6 April 2025 — HMRC · accessed 7 October 2026
4. 4.Claim Employment Allowance — eligibility — HMRC / GOV.UK · accessed 7 October 2026
5. 5.Running payroll — reporting to HMRC — HMRC / GOV.UK · accessed 7 October 2026
6. 6.Payroll software — HMRC / GOV.UK · accessed 7 October 2026
7. 7.Employing staff for the first time — GOV.UK · accessed 7 October 2026
8. 8.Workplace pensions — what employers must do — GOV.UK · accessed 7 October 2026
9. 9.Workplace pensions — what you, your employer and the government pay — GOV.UK · accessed 7 October 2026
10. 10.Duties for new employers — The Pensions Regulator · accessed 7 October 2026
11. 11.Penalties for employing illegal workers — Home Office / GOV.UK · accessed 7 October 2026
12. 12.Check a job applicant's right to work — Home Office / GOV.UK · accessed 7 October 2026
13. 13.Payroll: annual reporting and P60s — HMRC / GOV.UK · accessed 7 October 2026
14. 14.Check a job applicant's right to work: keep records — Home Office / GOV.UK · accessed 7 October 2026
15. 15.Employers' liability insurance — GOV.UK · accessed 7 October 2026
16. 16.Statutory Sick Pay changes for employers — Department for Business and Trade · accessed 7 October 2026