The UK is one of the easiest places in the world to set-up a business and start hiring the talent you need. Whether you’ve been operating as a sole trader for a while and are now ready to expand or you’re starting from scratch, we’ve got the step-by-step guide you need to follow to take on your very first employee. 
While becoming an employer can seem like a mammoth task, it’s actually relatively simple. Once you’ve found the right employee there are just seven things you need to do to become an employer and put your vision into motion. 

1. Set out a salary. 

You should already have a rough idea of how much you want to pay your new employee but it’s important to decide on the exact amount. Striking the right balance to attract the talent you need with ensuring margins remain profitable can be a challenge, but the key thing is to ensure you at least meet the National Minimum Wage – currently set at £7.83 for workers aged 25 and over. 

2. Check right to work in the UK 

As an employer, you’re responsible for ensuring your employee has the right to work in the UK. Documents that demonstrate this include a British passport, a passport or national identity card for EU or Swiss nationals, and a residence permit. You should make a copy of the documentation that shows the right to work in the UK, and you can find the full list of approved documents here

3. Check DBS requirement 

Depending on the nature of your business, you may need to apply for a DBS check to be conducted, formally known as a CRB check. This is a step that’s essential for firms working with vulnerable people and security. 

4. Get employers’ liability insurance 

As soon as you become an employer, you will need to take out insurance to provide you with cover. This insurance provides you with essential protection should an employee makes a compensation claim should they become injured or ill through their work. Taking out insurance is a legal requirement. 

5. Send your employee details of the job 

You will need to issue the employee with the contract of their employment in writing, this should cover all terms and conditions. This applies for any employee that you will be hiring for more than one month. 

6. Inform HMRC 

You will need to inform HMRC that you will be taking on an employee by registering as an employer. It’s usually takes around five days to set up your employer PAYE reference number and you can register up to four weeks before you first pay your employee. Once the employee starts work, you will need to prepare payslips calculating any tax and NIC deductions and submit these details to HMRC in real time (known as RTI). This is where an accountant or payroll bureau would come in! 

7. Check auto-enrolment 

Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. Eligible employees are aged between 22 and the State Pension age, earn at least £10,000 a year, and normally work in the UK. As a result, most new employer will need to set up a workplace pension scheme. 
As always, get in touch if you are starting out on your employer journey. We will be happy to help. 
Written by: 
Nicola J O'Sullivan -  
Effective Accounting 
Founder | Xero Champion | IR35 Expert 
Tagged as: For - Employers
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