How to register for PAYE

Register for PAYE with HMRC at least two weeks before your first payday to ensure you can legally report tax and National Insurance contributions in real-time. You must register if you are paying any employee (including yourself) more than £123 a week, or if the person you are hiring already has another job or a pension.

When do you need to register?

As a business owner, you usually need to register for PAYE if any of the following apply to your staff or yourself as a director:

• You pay them £123 or more a week (£533 a month).
• They have another job or a pension.
• You provide them with employee benefits (like a company car or private medical insurance).
• They are an offshore worker.

Even if you are the only person in your company, if you intend to pay yourself a salary above the Lower Earnings Limit to build up your State Pension record, you must set up a PAYE scheme.

The registration process

Most new businesses can register online through the GOV.UK website. The process is straightforward and typically takes about 15 to 20 minutes.

1. Log in to Government Gateway: You will need your Government Gateway user ID and password. If you don't have one for your business yet, you can create one during the process.
2. Provide business details: You will need your National Insurance number, Company Registration Number (from Companies House), and your UTR (Unique Taxpayer Reference).
3. Submit the application: HMRC will process your application and set up your employer record.

What happens next?

Once registered, HMRC will send you a letter containing two vital pieces of information: your Employer PAYE Reference and your Accounts Office Reference. You will need these numbers every time you run payroll or contact HMRC about your taxes.

Top Tip: Do not register more than two months before you start paying people, as HMRC may close the scheme if it remains inactive for too long.

Once you have your references, you can use payroll software to calculate tax and National Insurance deductions. Remember that you must submit a Full Payment Submission (FPS) to HMRC on or before every single payday.