Employer guide

First Employee Payroll: A Small Business Guide

The payroll arrangements need to be ready before the first wage payment.

Start with the payday, not the payslip

Taking on your first employee creates several jobs at once: agreeing the role, arranging payment, collecting the right information and establishing the payroll timetable. Put the proposed first payday on the calendar early. It gives you a date to work back from and helps identify whether registration, records or a pension arrangement could hold things up. Do not assume that deciding a salary is enough to make the first payroll ready.

For example, an owner might agree that a new employee starts halfway through the month and is paid at month end. The payroll instruction needs to make clear the start date, the agreed salary or hourly rate and how the first part-period payment is to be calculated. Those decisions belong to the employer. We process the authorised instruction rather than invent the employment arrangement.

Collect the starter information

HMRC’s new employee guidance explains the information needed before the first payment. A P45 helps establish the tax treatment; where one is not available, the appropriate starter checklist is important. Check the employee’s personal details and relevant student loan information, and give the payroll provider the completed information through the agreed secure route. A nickname and a salary figure are not a complete starter record.

Make one person responsible for collecting the details and checking they are complete. If different managers send different versions, identify which instruction is authorised before processing. Do not send National Insurance numbers, bank details or absence records through a general website enquiry. Payroll Harbour agrees document recipients, password arrangements and the transfer method during onboarding.

Organise employer and pension arrangements

Check the employer’s PAYE registration position in good time and establish the authorisations needed for the agreed payroll service. Tell us if the business already has a scheme or if another adviser is handling registration. Keeping one clear record of who is doing what avoids duplicate requests and assumptions about a task being complete.

Workplace pension duties are a separate part of employing staff. The Pensions Regulator provides guidance to help employers identify their obligations. Confirm the pension arrangement and contribution basis before the first run. Our regular fee covers routine auto enrolment processing for one supported scheme. New scheme setup and regulator declarations or re-declarations are separate work, quoted before we proceed.

Allow time to check and approve

The first run deserves a careful review because the initial details become the starting point for later periods. Check the employee, pay period, gross pay, deductions and net payment against the authorised instructions. Ask about anything unexpected before approving. A payroll report is a document to review, not simply another attachment to file.

Our usual monthly information deadline is five working days before payday. For weekly payroll, it is noon two working days before payday. Approval is normally needed by noon the working day before payday. Your actual timetable is confirmed when you join and may need to be earlier for your banking arrangements or a bank holiday.

Keep processing and payment separate

Payroll Harbour calculates the agreed payroll and completes the routine submissions after approval. The employer pays the employee, HMRC and the pension provider. Our monthly direct debit collects our service fee only. Make sure somebody in the business is responsible for each payment and has access to the relevant accounts.

HMRC normally requires the Full Payment Submission on or before payday, and payslips must also be provided on or before payday. The reporting date does not replace the time your bank needs to move the money. Standard setup and straightforward transfers are free, with any complex work quoted separately. Contact us with your intended payday so that the first run can be planned properly.