Freedom Isn’t Free UK Personal Finance
Self-Employed
Hiring Your First Employee UK: The Employer Checklist
To hire your first employee in the UK you must register as an employer with HMRC before their first payday, check their right to work, take out employers liability insurance of at least GBP 5 million, set up PAYE, and give them a written statement of employment particulars from day one.
Hiring your first employee: the employer duties (2026/27)
| Duty | What it requires |
|---|---|
| Register as an employer | Register with HMRC before the first payday to get a PAYE reference. You cannot register more than 2 months before you start paying people |
| Check right to work | Confirm the person can legally work in the UK before they start, using their documents or a Home Office online check |
| Employers liability insurance | A legal requirement once you have staff: at least GBP 5 million of cover from an authorised insurer. Fines of up to GBP 2,500 a day if you are not properly insured |
| Written statement of particulars | Give a written statement of the main employment terms on or before day one |
| Set up PAYE | Run payroll to deduct Income Tax and National Insurance, and report to HMRC on or before each payday |
| Pay at least minimum wage | National Living Wage is GBP 12.71 an hour for workers aged 21 and over from April 2026 |
| Auto-enrolment | Assess the worker for a workplace pension and enrol them if they qualify |
| Employment Allowance | Eligible employers can cut their employers Class 1 National Insurance bill by up to GBP 10,500 a year |