If you’re at the point where you need a little help with your business, it might be time to recruit your first member of staff. There’s more to being an employer than inviting somebody in and paying them though. The process for becoming an employer can vary depending on what the work is, and who you hire, but there are core points which apply to everyone.
Do I need to carry out applicant checks?
Once you choose which applicant will be joining your business, there are some checks which you should carry out. The first of these is checking that the applicant has the right to work in the United Kingdom. If you employ somebody who isn’t, you could face a civil penalty of up to £20,000 for each illegal worker.
You may also want to run a Disclosure and Barring Service (DBS) search to check the criminal record of somebody applying for a role. This is a requirement if you are hiring within the health care or childcare sectors.
Provide a written statement of employment
You will need to send a written statement of employment to anyone who will be working with you for longer than a month. In addition to this, you’ll need to provide employees with their employment contract detailing their working rights, responsibilities and working conditions. This can be made up of more than one document and must include at least the following:
The business name.
The employee’s name, their job title and a description of work.
The employee’s start date.
Rate and schedule of pay.
The job location and if they will have to relocate.
You will need to ensure you hold Employers’ Liability insurance if you take on staff. This must cover you for at least £5 million.
You can be fined £2,500 for each day you don’t have the correct insurance as an employer.
It’s important (and a legal requirement) to make sure you have it in place, as this will pay compensation if an employee is hurt in the workplace, or becomes ill due to their work.
Do I need to register as an employer with HMRC?
You will have to register as an employer within four weeks of paying your first employee and not more than two months before you start paying people. Your duties as an employer will include being responsible for paying your staff an agreed salary as well as deducting any income tax and National Insurance contributions via PAYE.
Does my employee need a workplace pension?
It’s important to make sure that you enrol eligible staff into a workplace pension. Check this through The Pensions Regulator website if you are unsure.
Automatic pension enrolment is now a legal duty and you could face repercussions if you don’t comply. There is a fixed penalty notice of £400 if you are found to be non-compliant which can escalate up to £10,000 depending on the number of staff you have.
Paying your employees
You must tell HMRC when you take on a new employee and follow a few steps before paying them for the first time.
You will need to check if you need to pay them through PAYE which depends on their wage and employment status
Gather the employee’s information to work out their tax code and whether they need to repay a student loan
Set the employee up in your payroll software
Register the employee with HMRC.
With this done you can run your payroll. You will need to record their pay, and calculate any deductions, as well as how much employer’s National Insurance contribution you must make.
Employers also need to pay and produce payslips for the employee.
Finally, you must now report their pay and any deductions to the HMRC in a Full Payment Submission. Phew!
If this sounds daunting, find out more about how we can help you with our payroll services by calling 020 3355 4047 or using the Live Chat button.
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About The Author
Forensics graduate-turned copywriter and blogger. I love turning complex topics into easy to understand, yet engaging pieces of content.