Hiring the first person changes the legal shape of a business more than any other decision a small employer makes. It is not just a new cost. It is a recurring set of obligations with fixed reporting dates, and they begin before the first payday rather than after it.
KKB Accounting provides payroll support shaped around the number of people paid, the pay-run frequency and the date support needs to begin. This is what that commitment actually contains, so it can be planned rather than discovered.
Before the first payday
You need to be registered as an employer before you can operate payroll, and that registration takes time to come through. It should be started well before the person's first pay date rather than in the week of it.
You also need the employee's details, including their starter information, so the correct tax code can be applied from the beginning. Getting this wrong means the first payslip is wrong, and correcting it later is more work than getting it right at the outset.
Then there are the documents that have nothing to do with tax but everything to do with employing someone: a written statement of employment particulars, a check that the person has the right to work, and employers' liability insurance. These are not optional extras and are far easier to arrange before the start date than after it.
- Register as an employer well ahead of the first pay date.
- Collect starter details so the tax code is right on payslip one.
- Issue a written statement of employment particulars.
- Carry out the right to work check and arrange employers' liability insurance.
The rhythm: reporting on or before each payday
Payroll is not an annual task. Every time you pay someone, a submission has to reach HMRC on or before the payday, reporting what was paid and what was deducted. That is the single most important operational fact about running payroll, and it is where late penalties come from.
That rhythm has a practical consequence for small employers: pay dates need to be predictable. Paying people when cash allows, on varying dates, turns a routine monthly task into a series of separate reporting events, each with its own deadline.
Deductions then have to be paid over to HMRC on the normal schedule. Like VAT, the money deducted from wages is not the business's money, and treating it as available working capital during a tight month creates a problem that arrives with a fixed date attached.
KKB Accounting shapes payroll support around the pay-run frequency for exactly this reason: the frequency determines how often the obligation recurs, and therefore how much routine it needs.
Pensions, holiday and statutory pay
Automatic enrolment duties begin with the first employee, not at some later size. You have to assess whether the person qualifies, enrol them if they do, make employer contributions, and complete a declaration of compliance. Even where nobody qualifies, the assessment and the declaration still have to happen.
Holiday entitlement accrues from day one, and it is worth setting up the calculation properly at the start, especially for part-time or irregular hours where the arithmetic is less obvious than it looks.
Statutory payments such as sick pay, maternity and paternity pay all sit inside payroll. Nobody plans for their first one, and it always arrives at an inconvenient moment. Knowing that the payroll process handles them is the difference between an administrative step and a crisis.
- Automatic enrolment duties apply from the first employee.
- The declaration of compliance is required even if nobody qualifies.
- Set holiday accrual up properly for part-time and irregular hours.
- Statutory sick, maternity and paternity pay are handled through payroll.
Records, payslips and the year end
Employees are entitled to an itemised payslip, and you must keep payroll records showing what was paid, what was deducted and why. These are the records that answer questions years later, and reconstructing them after the fact is difficult in a way that reconstructing purchase invoices is not.
There is a payroll year end as well as a business year end, with its own reporting and the statements employees need. It sits at a fixed point in the year regardless of your accounting date, which is one more reason to keep the two timetables clearly separate in your own head.
As a paperless practice, KKB Accounting keeps these records and payslips digital, which suits payroll particularly well: it is the one part of a small business's administration that produces a document every single month, forever.
Related pages
Questions customers ask
When do I have to report a payment to HMRC?
On or before the payday, every time you pay someone. That is the obligation most first-time employers underestimate, and it is where late-filing penalties come from. Predictable pay dates make it far easier to stay on top of.
Do pension duties apply if I only have one employee?
Yes. Automatic enrolment duties start with the first employee. You must assess whether they qualify, enrol and contribute if they do, and complete a declaration of compliance either way, including when nobody qualifies.
Can I just pay someone as self-employed instead?
Only if they genuinely are. Employment status depends on the reality of the working relationship rather than on what the paperwork calls it, and getting it wrong can mean owing the tax and contributions that should have been operated through payroll.
Register early, fix a predictable pay date, treat deductions as money you are holding rather than money you have, and set the pension duties up at the start rather than when somebody asks.
KKB Accounting provides payroll support shaped around how many people you pay, how often you pay them and when support needs to begin. The contact page is the place to start.
