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How to register as employer HMRC – Step‑by‑step UK guide

Opening paragraph

Register as employer HMRC is the first compliance step when you take on staff as a limited company or other business in the UK. This guide walks through PAYE scheme registration, getting your employer PAYE reference and practical first employee setup steps so you can run payroll correctly from day one.

Why you must register as an employer with HMRC

Before paying any employee you must be able to operate PAYE and report to HMRC. PAYE is how Income Tax and National Insurance contributions are collected from wages. If you do not register and run payroll correctly you risk penalties, interest and problems with employee tax records.

Registering also triggers other employer duties you need to consider immediately. These include Real Time Information reporting, automatic enrolment pension duties and statutory payments such as statutory maternity pay. It is therefore essential to start the registration process well before the first payday.

Quick overview of the registration process

  • Decide when your employment relationship starts and whether you need to register as an employer.
  • Gather company and contact details required for registration.
  • Sign in or create an HMRC online account and choose PAYE for employers.
  • Complete PAYE scheme registration and wait for your employer PAYE reference and instructions.
  • Set up payroll software, create employee records and complete first RTI submission when you pay staff.

Step 1 – Confirm you need to register as an employer

Most small businesses must register as an employer if they pay employees. This includes:

  • staff on contracts of employment
  • company directors who are paid through payroll
  • casual workers who are classed as employees for tax

You may not need to register if you only pay contractors who are genuinely self-employed. When in doubt, check HMRC guidance or speak to an accountant.

Step 2 – Gather the information you will need

Having the right information to hand speeds up PAYE scheme registration. Gather the following before you start:

  • company name and Companies House number if relevant
  • business address and contact details
  • employer contact name, phone and email
  • estimated start date for paying employees (your first payday)
  • company Unique Taxpayer Reference (UTR) or personal tax details if you are a sole trader
  • details of any previous PAYE schemes if you have operated payroll before

Keeping this information ready reduces delays when you complete the online form.

Step 3 – Sign in or set up an HMRC online account

HMRC requires most PAYE registration to be completed using their online services. If you do not already have an account you will need to register and verify your identity.

Create a business tax account or add PAYE for employers to an existing Government Gateway or HMRC sign-in account. Allow time for activation steps and any security checks. If multiple people in your business need access, plan who will be the primary PAYE contact.

Step 4 – Complete PAYE scheme registration

When you register as an employer HMRC will create a PAYE scheme for you. During registration you will:

  • confirm the business type and legal structure
  • provide a start date for when you will pay employees
  • nominate a payroll contact
  • tell HMRC whether the business has traded before or has other payrolls

This is commonly referred to as PAYE scheme registration. You can complete this online through the HMRC service once signed in.

What you receive from HMRC

After registration HMRC will usually send confirmation and an employer PAYE reference. This reference is used to identify your PAYE scheme when paying liabilities and filing returns. You will also receive guidance about how and when to report PAYE, and any next steps.

Allow for some lead time before your first payday as HMRC communications may arrive by post or appear in your online account.

Step 5 – Understanding employer PAYE reference and accounts office reference

Your employer PAYE reference is the identifier HMRC uses for your payroll. You need to include this reference when making payments or contacting HMRC about PAYE matters.

Keep the reference safe and share it with any payroll software provider or accountant who will run payroll on your behalf. If you operate more than one payroll scheme you may have multiple references.

Step 6 – Choose payroll software or use HMRC Basic PAYE Tools

Once registered, you must report PAYE information to HMRC each time you pay staff. This is done via Real Time Information (RTI). You have these common options:

  • commercial payroll software that submits RTI directly
  • cloud accounting platforms with payroll modules such as Xero or QuickBooks
  • HMRC Basic PAYE Tools for very small employers who prefer a free option

If you outsource payroll to an accountant, they will need your employer PAYE reference and delegated access where appropriate.

Related Figure services: see our Payroll & PAYE and Bookkeeping & Xero services for help integrating payroll with your accounting system.

Step 7 – Prepare your first employee setup checklist

Getting first employee setup right avoids payroll errors. For each new employee collect:

  • full name, address and date of birth
  • National Insurance number
  • P45 from previous employer if available, or complete a new starter declaration
  • preferred pay date and bank details for payroll
  • details for statutory payment eligibility such as parental leave or sick pay history

You must also check right to work in the UK and issue a written statement of employment particulars if required by law. Keep secure records for each employee.

Use the term first employee setup to remember these essential actions when you pay someone for the first time.

Step 8 – Set up pension automatic enrolment and employee benefits

Registering as an employer triggers workplace pension duties for most employers. You must:

  • assess each worker for automatic enrolment eligibility
  • choose and set up a qualifying pension scheme if you do not already have one
  • contribute employer pension payments for eligible staff and communicate with staff about their rights

The Pensions Regulator has detailed guidance on joining and meeting duties. Plan pension set up alongside payroll so contributions and deductions work from the first pay run.

Step 9 – Run payroll, submit RTI and make PAYE payments

When you pay your employees you must submit a Full Payment Submission (FPS) to HMRC on or before each payday via your payroll software. The FPS includes employee pay, tax, National Insurance deductions, student loan deductions and statutory payments.

Make PAYE payments to HMRC by the deadline shown on your payment schedule. If you pay late you may face interest and penalties. If you are unsure of payment deadlines or methods, check HMRC guidance or ask your accountant.

Dealing with other payroll elements

  • Student loans: check whether employees have a plan and deduct appropriately.
  • Statutory payments: statutory sick pay and statutory parental pay have specific rules and qualifying criteria.
  • Expenses and benefits: understand how to report taxable benefits and consider P11D requirements for certain benefits in kind.

If you are uncertain about how to calculate any of these items, a payroll specialist or accountant can help ensure compliance.

Common pitfalls when you register as employer HMRC

  • Registering too late and missing your first PAYE reporting deadline
  • Not collecting correct starter information such as NI numbers or P45s
  • Forgetting auto-enrolment pensions duties
  • Using outdated payroll processes that do not submit RTI
  • Not keeping accurate payroll records for each employee

Avoid these by following a checklist, using compliant software and asking for professional help when needed.

What to expect after registration – timing and communications

HMRC communications may arrive electronically in your online account or by post. Keep an eye on the email and telephone contact details you provided. The employer PAYE reference and instructions on how to report are essential for your next steps.

If you engage an accountant or payroll bureau, provide them with the reference and authorise any access required so payroll can start without delay.

When to ask for help – and who to contact

If you are unsure about any stage of PAYE scheme registration or payroll setup, options for help include:

We recommend getting professional help for your first payroll run. Figures can help with Payroll & PAYE setup and ongoing running, integrating payroll with Bookkeeping & Xero and providing management reporting.

Recent and ongoing compliance changes to watch

  • Real Time Information reporting remains mandatory for all employers and must be submitted at each pay run.
  • Digital access to HMRC services continues to be the primary route for registration and correspondence.
  • Auto-enrolment and pension duties continue to be enforced by the Pensions Regulator.

Tax rules, rates and thresholds change regularly. Do not rely on this article for precise tax rates or NIC bands. Confirm current rates with HMRC or your accountant before payroll runs.

UK tax and legal accuracy

This article is for informational purposes only and does not constitute professional tax or financial advice. Please speak to a qualified accountant before taking action. Tax year 2026/27.

Frequently asked questions

Q: When should I register as an employer with HMRC?

  • You should register before you run your first payroll or at least in good time before the first payday. Registering early ensures you receive your employer PAYE reference and can set up software and pensions without delay.

Q: How do I register as an employer with HMRC online?

  • Sign in or create an HMRC online account via the HMRC online services page and select PAYE for employers. Have your business details and estimated pay start date ready. GOV.UK provides the main sign-in and registration pages: https://www.gov.uk/log-in-register-hmrc-online-services

Q: What is an employer PAYE reference and why is it important?

  • The employer PAYE reference uniquely identifies your payroll scheme with HMRC. You must use it when filing returns and making payments. Share it with payroll software providers or your accountant.

Q: What do I need to set up for my first employee?

  • Collect the employee's NI number, tax details (P45 or starter information), bank details, and start date. Complete right-to-work checks and enrol eligible staff into a workplace pension if required.

Q: How long does it take to get set up after registering?

  • Timing varies depending on how you receive HMRC communications and whether you need to set up a pension or payroll software. Allow several days to a few weeks in practice, and plan the registration well ahead of your first payday.

Summary and next steps

Register as employer HMRC early in the hiring process to avoid delays and penalties. Complete PAYE scheme registration via HMRC online services, receive your employer PAYE reference, choose compliant payroll software or an accountant, and run RTI submissions with every pay run. Remember to set up auto-enrolment pension duties and keep secure employee records.

If you would like support, Figures can help with Payroll & PAYE, Bookkeeping & Xero integration and wider statutory accounts and tax compliance. Book a discovery call to see how we can set up and run payroll for you: /.

Further reading and useful links