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Hiring your first person is a big step. There's a set list of legal jobs to do before and after they start. This page walks through them in order, with links to the official GOV.UK guidance for each one.
Before they start
- Decide if they are an employee, worker or contractor. Employment status affects tax and employment rights, and it depends on how the work really happens, not just what the contract says. See GOV.UK: Employment status.
- Check they have the right to work in the UK before you employ them: GOV.UK: Check a job applicant's right to work.
- Get employers' liability insurance. Most employers must have it as soon as they employ someone, with cover of at least £5 million from an authorised insurer. You can be fined £2,500 for every day you're not properly insured. Source: GOV.UK: Employers' liability insurance. See our insurance page.
- Register as an employer with HMRC. You usually need to register before the first payday, and you can't register more than 2 months before you start paying people. Source: GOV.UK: Register as an employer.
Pay: minimum wage
You must pay at least the National Minimum Wage or National Living Wage for the worker's age. Rates per hour, from GOV.UK, checked 29 October 2026:
| Age / type | From April 2026 | From April 2027 |
|---|---|---|
| 21 and over | £12.71 | £13.21 |
| 18 to 20 | £10.85 | £11.27 |
| Under 18 | £8.00 | £8.31 |
| Apprentice | £8.00 | £8.31 |
Source: GOV.UK: National Minimum Wage and National Living Wage rates. Apprentice rate rules depend on age and year of apprenticeship, so check the GOV.UK page.
Running payroll (PAYE)
As an employer you normally operate PAYE: you work out and deduct Income Tax and National Insurance from pay, report to HMRC each time you pay staff (Real Time Information), and pay HMRC what you owe. Source: GOV.UK: PAYE and payroll for employers and GOV.UK: Running payroll.
- Free option: HMRC's Basic PAYE Tools is free payroll software for employers with fewer than 10 employees: GOV.UK: Basic PAYE Tools.
- Accounting software: many accounting packages offer payroll as an add-on (see our accounting & bookkeeping page).
- Payroll bureau or accountant: handy if you'd rather someone else runs it.
You may be able to reduce your employer National Insurance bill with the Employment Allowance. Check eligibility at Employment Allowance (GOV.UK).
Workplace pensions (auto-enrolment)
You must put staff into a workplace pension scheme and pay in if they are aged between 22 and State Pension age, earn at least £10,000 a year, and usually work in the UK. Under most schemes the employer pays at least 3% of the employee's qualifying earnings. Source: GOV.UK: Workplace pensions: what employers must do. Your duties start from the first day you employ someone, and The Pensions Regulator has a step-by-step guide for new employers.
Contracts and written statements
Employees and workers must get a written statement of employment particulars. The main document (the "principal statement") must be given on the first day of work, and a wider written statement within 2 months. Source: GOV.UK: Written statement of employment particulars. Acas has free templates and advice: Acas: free employment advice.
Health and safety
Employers must manage health and safety risks. The Health and Safety Executive has a simple guide for small businesses, including risk assessments and what to do if you have fewer than five employees: HSE: Health and safety made simple.
Data protection for staff records
Staff records are personal data, so keep them secure and only collect what you need. Read our data protection and licences guide.
HR tools and help
- Acas (Acas: free employment advice): free, impartial advice on contracts, holiday, discipline and grievance, with a helpline.
- HR software (holiday booking, records, rotas) can help as you grow; many accounting and payroll providers include basic HR features.
- Employment solicitor or HR consultant: for anything unusual, such as dismissals or disputes.
First-employee checklist
- Confirm employment status.
- Do a right to work check and keep a copy.
- Buy employers' liability insurance and display the certificate.
- Register as an employer with HMRC.
- Set up payroll software or a bureau.
- Check minimum wage for their age.
- Set up a workplace pension.
- Give the written statement on day one.
- Do a health and safety risk assessment.
- Keep payroll and staff records safely.
See also: GOV.UK: Employing staff for the first time.
Official sources
- GOV.UK: Employing staff for the first time
- GOV.UK: Employment status
- GOV.UK: Check a job applicant's right to work
- GOV.UK: Employers' liability insurance
- GOV.UK: Register as an employer
- GOV.UK: PAYE and payroll for employers
- GOV.UK: Running payroll
- GOV.UK: Basic PAYE Tools
- GOV.UK: National Minimum Wage and National Living Wage rates
- GOV.UK: Workplace pensions: what employers must do
- GOV.UK: Written statement of employment particulars
- Acas: free employment advice
- HSE: Health and safety made simple
More tools & services
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Last checked 29 October 2026. Spotted something out of date? Let us know.