Preparing for your first employees is a genuine milestone. It means your business has moved beyond what you can do alone, but it also moves you from founder to employer. That shift brings legal duties you cannot delegate away. Before you advertise a role, you need to know the current thresholds, registration deadlines, and day-one employment rights that apply in the UK.
This checklist is written for women running small businesses in the UK. It covers the practical and legal steps you need to take before your new starter’s first day.
Preparing for your first employees: define the role
Start by identifying exactly what you need. Are you looking for someone to free you from admin so you can focus on revenue? Do you need customer-facing cover for a shop, kitchen help for a catering business, or operational support to extend your hours?
Write a job description that sets out the tasks, skills, hours, and pay band. Be specific. A vague job advert attracts vague applicants, and unclear expectations are one of the most common causes of early disputes. If you are not sure whether you need an employee or a self-employed contractor, check your responsibilities under IR35 off-payroll working rules before you decide. Getting the employment status wrong can lead to backdated tax, National Insurance, and penalty charges from HMRC.
Choose the right contract type
The contract you offer shapes your obligations. In the UK the main options are:
- Full-time: usually 35 hours or more per week.
- Part-time: fewer than 35 hours per week. Part-time workers have the same statutory rights as full-time workers, pro rata.
- Zero-hours: no guaranteed hours. Under the zero-hours reforms announced for 2026, eligible workers on these contracts may gain a right to guaranteed hours and reasonable shift notice.
- Fixed-term: for a set period or project. These workers still accrue holiday and pension rights.
Think about resilience. One full-time employee gives consistency, but if they are sick or on holiday you are back to doing everything yourself. Two part-time roles can give you cover and flexibility, though they add slightly more admin.
Plan the working pattern
Decide the hours and shifts before you advertise. A shop in a busy precinct might need cover from 9 a.m. to 6 p.m. A warehouse or production business might need rotas across evenings and weekends. Whatever pattern you choose, record it in the contract and keep a written record of hours worked. The government has announced that 2026 reforms will give workers stronger rights around predictable working patterns and shift notice.
Register with HMRC as an employer
You must register with HMRC as an employer before you run your first payroll. You can register up to two months before you start paying someone, but not earlier. HMRC can take up to 14 days to issue your employer PAYE reference, so do not leave this until the day before payday.
You need to register even if you are the only employee of your own limited company and you pay yourself a salary. If no one earns above the PAYE threshold of £123 per week, £533 per month, or £6,396 per year for 2025/26, you may still need to keep payroll records, according to gov.uk.
Set pay at or above the legal minimum
From April 2025, the National Living Wage is £12.21 per hour for workers aged 21 and over, according to gov.uk. The National Minimum Wage rates for younger workers and apprentices are £10.00 per hour for 18 to 20-year-olds and £7.55 per hour for 16 to 17-year-olds and apprentices in the same period, according to gov.uk. These are legal minimums, not recommendations. Rates for 2026/27 will be confirmed in the Autumn Budget, so check gov.uk before you advertise. For skilled roles you will usually need to pay more to attract the right candidates.
Decide your pay frequency before you advertise. Monthly payment on a fixed date is common in the UK, but weekly or four-weekly cycles are also allowed. Whatever you choose, put it in the contract and stick to it.
Run payroll and issue payslips
You must use payroll software or an accountant to calculate and report PAYE tax and National Insurance to HMRC. From April 2025, employers pay Class 1 secondary National Insurance contributions at 15% on earnings above the secondary threshold of £5,000 per year, according to gov.uk. Employees pay primary National Insurance at 8% on earnings between £12,570 and £50,270, and 2% above that, according to gov.uk.
Every employee must receive a payslip on or before payday. The payslip must show:
- their name and National Insurance number
- their PAYE tax code
- hours worked, if pay varies by time worked
- gross pay
- deductions, including tax, National Insurance, pension, and student loan repayments
- net pay
Payslips can be paper or digital. Keep payroll records for at least three years.
Enrol them into a workplace pension
Under automatic enrolment, you must enrol eligible staff into a qualifying workplace pension and make employer contributions. For 2025/26, qualifying earnings are between £6,240 and £50,270 per year, according to gov.uk. The minimum total contribution is 8% of qualifying earnings, with at least 3% coming from you as the employer and 5% from the employee, according to The Pensions Regulator.
You must write to staff within six weeks of their enrolment date to tell them how automatic enrolment applies to them. You can set this up through a pension provider such as Nest, People’s Pension, or Smart Pension.
Put day-one rights in writing
The government has announced Employment Rights Act changes that are expected to take effect in 2026. As announced, employees would have a day-one right to claim unfair dismissal, subject to a statutory probationary period. They would also have a day-one right to request flexible working, plus rights to guaranteed hours and reasonable notice of shifts if they are on zero-hours or low-hours contracts.
You must give every employee a written statement of employment particulars on or before their first day. This is not the same as a contract, but it must include:
- job title and duties
- place of work
- start date and, if relevant, end date
- pay amount, frequency, and how it is calculated
- working hours and days of the week
- holiday entitlement and pay
- sick pay procedures
- notice periods
- pension arrangements
- any probationary period
Create an employee handbook
An employee handbook sets out how your business operates day to day. It does not replace the written statement, but it helps prevent misunderstandings. Include your policies on:
- absence, sickness, and holiday requests
- discipline and grievance procedures
- health and safety responsibilities
- equal opportunities and harassment
- data protection and social media use
- dress code, if relevant
- who to contact with problems
Make sure the handbook reflects current rates. For 2025/26, Statutory Sick Pay is £118.75 per week, according to gov.uk. Statutory Maternity Pay is 90% of average weekly earnings for the first six weeks, then £187.18 per week or 90% of earnings, whichever is lower, for the next 33 weeks, according to gov.uk. Fathers and partners may be entitled to Statutory Paternity Pay or Shared Parental Pay at similar rates.
Action steps before you hire
- Write the job description and decide whether you need an employee or a contractor.
- Choose full-time, part-time, or zero-hours, and set the working pattern.
- Register with HMRC as an employer before the first payday.
- Set pay at or above the current National Living Wage and check gov.uk for the 2026/27 rate before you advertise.
- Set up payroll software or appoint an accountant.
- Choose a workplace pension provider and understand your 3% minimum contribution.
- Issue a written statement of employment particulars on day one.
- Write an employee handbook that covers absence, discipline, and current statutory pay rates.
Preparing for your first employees means more than finding the right person. It means putting the legal, financial, and operational foundations in place so you can lead with confidence. Get the basics right from the start, and you will spend less time fixing problems later and more time growing the business you set out to build.
