Do you need to register PAYE before hiring employees using 4 proven steps in 2026?

Yes. Register your PAYE scheme with HMRC before paying employees, using four clear steps to set up payroll, obtain PAYE reference details, and report RTI to avoid penalties.

How do you start the PAYE registration process before hiring employees?

Begin by registering your company for PAYE with HMRC and appointing a payroll contact to receive the PAYE reference and accounts office reference.
Registering for PAYE is the legal first step once you intend to employ staff. Register online at HMRC’s business tax service or through a trusted agent. Provide your company’s Unique Taxpayer Reference (UTR), company registration number, and director details. HMRC issues an employer PAYE reference and accounts office reference within 10 working days; overseas or complex cases may take longer.

What are the four proven steps to register PAYE before hiring employees?

Follow four steps: register for PAYE, choose payroll software, collect employee starter information, and set up Real Time Information (RTI) reporting.
Step 1: Register for PAYE and obtain your PAYE reference. This activates your employer obligations.
Step 2: Choose HMRC-recognised payroll software that supports RTI and auto-enrolment reporting. Select software that integrates bank payments and pension calculations.
Step 3: Collect employee starter data: full name, National Insurance number, tax code, P45 (if available), and starter checklist results. These data points determine tax and NIC calculations.
Step 4: Configure RTI and schedule payroll runs. Register for PAYE online, add payroll software to your HMRC account, and plan pay periods to report on or before each pay date.

What information must you provide to HMRC when registering for PAYE?

Provide company UTR, Companies House number, business address, contact details, and the names and National Insurance numbers of company directors if requested.
HMRC uses the Unique Taxpayer Reference to link PAYE to corporation tax records. The company registration number links to Companies House filings. Provide a payroll contact email and phone number for HMRC notices. If you already employ apprentices or other workers, disclose expected payroll frequency and projected pay dates for the first 12 months. Read our articles Hiring employees UK 7 payroll obligations many startups ignore, and  Avoid HMRC penalties by registering PAYE with professionals today.

How long does HMRC take to issue PAYE references and what happens next?

HMRC typically issues PAYE references within 10 working days; once received, set up payroll software and perform your first RTI submission on the employee paydate.
After HMRC issues the employer PAYE reference, enter it into your payroll software. Configure tax code updates and National Insurance categories. On the first payday, run payroll, produce payslips, deduct PAYE tax and employee/employer National Insurance contributions, and submit Full Payment Submission (FPS) via RTI to HMRC by the payment date.

What payroll software and tools must you choose to comply with RTI?

Select HMRC-recognised payroll software that files Real Time Information and generates payslips, FPS, and Employer Payment Summary (EPS) as required.
Choose software that supports automatic tax table updates and secure submissions. Ensure it handles statutory payments (SSP, SMP, SSP), auto-enrolment pension deductions, and workplace pension gateway interactions. Test payroll runs before the first paydate to confirm calculations and HMRC receipt of RTI files.

How do you gather and validate employee starter information accurately?

Collect a National Insurance number, tax code, P45 or starter checklist answers, bank details, and emergency contact; validate against government records when possible.
Three verification methods: check a National Insurance card or payslip, verify identity with passport or driving licence, and confirm address using a recent utility bill. Use the starter checklist if the employee lacks a P45. Incorrect starter data leads to wrong tax codes and potential tax underpayments.

How do PAYE and auto-enrolment interact during payroll setup?

Integrate pension provider information in payroll so contributions calculate at each payrun and employee opt-out windows are tracked.
Register for automatic enrolment with The Pensions Regulator separately. Provide pension scheme details to payroll software, including contribution percentages and staging date. Deduct employee contributions and add employer contributions then report pension figures to the pension provider each pay period.

What reporting and payment deadlines must you meet after registering PAYE?

Submit FPS on or before each paydate and pay PAYE tax and employer NICs to HMRC monthly or quarterly, depending on thresholds and payment schedules.
Monthly payment deadlines normally fall on the 22nd for electronic payments and the 19th for cheques. Small employers with liabilities under £1,500 may pay quarterly if HMRC agrees. Missing FPS submissions or PAYE payments triggers interest, penalties, and compliance reviews.

How can startups reduce HMRC penalty risk when registering PAYE?

Register before the first payday, use compliant payroll software, keep accurate starter records, and submit RTI on time to avoid penalties.
Penalties escalate with repeated late submissions. Maintain a payroll calendar and retain payslips, RTI confirmations, and bank payment evidence. Audit payroll settings after the first three payruns to catch misclassifications. Train the payroll contact on RTI workflows and HMRC notifications.

Explore our Register Your Company for PAYE guides,

How to Register Your Limited Company for PAYE with HMRC in 2024 

PAYE Registration for Limited Companies 4 Steps to Do It Correctly 

How does Register Your Company for PAYE service help with these steps?

Register Your Company for PAYE handles registration, payroll setup, RTI configuration, and ongoing compliance to ensure on-time FPS submissions and correct PAYE payments.
The service registers your company with HMRC, configures payroll software, validates starter information, and sets up pension deduction rules. It reduces administrative errors and shortens the setup timeline from weeks to days. Use the service when you want a professional to manage technical filings and reduce penalty exposure.

Register PAYE before hiring to meet legal payroll obligations. Follow the four proven steps: register for PAYE, choose payroll software, collect and validate starter data, and enable RTI reporting. Proper setup prevents tax underpayments, avoids penalties, and ensures correct National Insurance and pension deductions. My Company Registration provides professional support through the Register Your Company for PAYE service to implement these steps promptly and accurately.

Frequently Asked Questions

Do I need to register for PAYE before I hire an employee?

Yes. Register Your Company for PAYE with HMRC before the first payday to avoid penalties and ensure correct tax and National Insurance deductions. My Company Registration can guide the registration process and necessary deadlines.

How long does it take to register a company for PAYE?

HMRC usually issues an employer PAYE reference within 10 working days after registration. Complex cases or postal confirmation can take longer, so Register Your Company for PAYE recommends allowing at least two weeks before the first payrun.

What information do I need to register my company for PAYE?

You need the company UTR, Companies House number, business address, payroll contact details, and expected pay dates; director names and NI numbers may be requested. Register Your Company for PAYE ensures you collect and validate these records for accurate setup.

Can I run payroll before getting the PAYE reference from HMRC?

You can prepare payroll runs, but you must not make tax deductions or finalise payslips until you have the PAYE reference and have submitted RTI on the first paydate. Register Your Company for PAYE helps configure payroll software to align with HMRC RTI requirements.

What are the penalties for late PAYE registration or reporting?

HMRC applies interest and penalties for late PAYE payments and late RTI submissions, with penalties increasing for repeated failures and long delays. Register Your Company for PAYE provides compliance steps to minimise error risk and meet submission and payment deadlines.