Accounting & Tax

Payroll basics for small employers

Taking on your first employee brings a set of legal payroll obligations that start from day one, not once the business is established — getting the basics right early avoids the penalties that catch most first-time employers out.

6 min readUpdated Jul 2026
Key points
  • Register as an employer before your first payday, not on it
  • RTI submissions are due on or before each payday
  • Auto-enrolment duties can start from an employee's first day
  • Payslips, P60s and P11Ds are legal requirements, not optional extras

Registering as an employer

You need to register with HMRC as an employer before the first payday, and get this done in good time — it can take a couple of weeks to come through, and you can't run payroll without it.

Real Time Information (RTI) submissions

Every time you pay staff, you must submit details to HMRC on or before payday, not after. Late or missing RTI submissions are one of the most common — and easily avoidable — payroll penalties.

Auto-enrolment pensions

Most employees must be automatically enrolled into a workplace pension, with minimum contributions from both employer and employee. This applies from an employee's first day for eligible staff, not after a probation period.

Payslips, P60s and P11Ds

Employees are legally entitled to an itemised payslip every payday, a P60 summarising the tax year by end of May, and a P11D for any taxable benefits provided outside of payroll.

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