How to Register as an Employer with HMRC (2026 Guide for UK Businesses)

8 hours ago
4 min read

Hiring your first employee is a big moment. It usually means your business is growing - which is exciting.

But before you run that first payroll, there’s one important step you can’t skip:

You need to register as an employer with HMRC.

If you’re not sure whether you need to register, when to do it, or how the process works, don’t worry. This guide explains everything in plain English, no jargon, no panic.

What does it mean to register as an employer with HMRC?

Registering as an employer simply means telling HMRC that you’re going to start paying someone through PAYE (Pay As You Earn).

Once registered, HMRC will issue you with:

An Employer PAYE reference
An Accounts Office reference

These two references allow you to:

Run payroll legally
Deduct Income Tax and National Insurance
Submit payroll reports to HMRC
Pay over the tax and NI you’ve deducted

Registration is completely free. It doesn’t trigger a tax bill. It just sets up your payroll record with HMRC.

Who needs to register as an employer?

You must register with HMRC as an employer if:

You pay anyone who qualifies as an employee
You pay yourself a salary as a director of a limited company
You need to operate PAYE
You pay an employee £123 or more per week (2025/26 threshold)
You provide employee benefits or expenses
You run PAYE alongside CIS

You do not need to register if you only hire CIS subcontractors and do not operate PAYE.

Do company directors count as employees?

Yes.

If you’re a director of a limited company and you pay yourself a salary, you must register as an employer and operate PAYE - even if it’s just you on payroll.

There are limited exceptions for very low-paid staff below the Lower Earnings Limit with no pension or benefit implications, but in practice, most limited companies paying salaries will need to register.

When should you register as an employer?

Timing matters.

You must:

Register before your first payday
But no more than 2 months before you start paying employees

If you leave it too late, you risk delays and potential penalties.

If your PAYE reference hasn’t arrived by payday, don’t panic - you can still pay staff and submit your Full Payment Submission (FPS) once the reference arrives.

What do you need before registering?

Before you start the HMRC employer registration process, have the following ready:

Your business name and registered address
Contact details
Date you’ll first pay employees
Your National Insurance number (if you’re a sole trader)
Company registration number (if limited company)

You don’t need payroll software to register - but you’ll need it shortly after.

How to register as an employer with HMRC (step-by-step)

There are three ways to complete PAYE registration in the UK.

1. Register online (recommended)

For most businesses, this is the easiest option.

Go to HMRC’s “Register as an employer” service
Answer questions about your business
Submit the form

HMRC will then send your Employer PAYE reference and Accounts Office reference by post.

Keep these safe, you’ll need them every month.

2. Register by phone

If you’re employing someone at home (for example, a nanny or carer), you can call the HMRC New Employer Helpline: 0300 200 3211

An adviser will guide you through the process.

3. Register by post

This option still exists, but it’s slower and rarely used. Most businesses choose online registration.

What happens after you register?

Once HMRC processes your application, you’ll receive:

Reference	What it’s used for
Employer PAYE reference	Identifies your payroll scheme
Accounts Office reference	Used when paying HMRC

1. Activate your PAYE scheme

You’ll need a Government Gateway account to access PAYE Online and receive notices from HMRC. HMRC will send an activation code by post.

Most payroll software submits RTI returns directly to HMRC, but PAYE Online allows you to:

View liabilities
Access coding notices
Manage CIS (if applicable)

2. Choose payroll software

Under Real Time Information (RTI), payroll must be submitted digitally on or before the date employees are paid.

Your payroll software should:

Calculate Income Tax and National Insurance
Generate payslips
Submit Full Payment Submissions (FPS)
Submit Employer Payment Summaries (EPS) where required
Produce P60s
Produce P11Ds where benefits are not payrolled

Trying to run payroll manually without compliant software often leads to penalties and errors.

3. Collect employee details

Before running payroll, you’ll need:

Full legal name
Date of birth
Address
National Insurance number (if available)
P45 or completed Starter Checklist
Student loan status
Pension auto-enrolment details

Accurate record-keeping from day one makes payroll compliance significantly easier.

Running payroll and reporting to HMRC

Once you’re fully set up, you’ll need to:

Submit a Full Payment Submission (FPS) every time you pay staff
Pay tax and National Insurance using your Accounts Office reference
Keep payroll records for at least 3 years

Payroll is not a one-off job - it’s ongoing compliance.

Common employer questions

Can I pay staff before registration is complete?

Yes.

If your reference hasn’t arrived yet, you can still run payroll and pay employees. You’ll just submit the FPS once your PAYE reference comes through.

Don’t delay paying staff.

What happens if I don’t register as an employer?

Failing to register can lead to:

Late filing penalties
Incorrect payroll submissions
HMRC compliance issues

It’s much easier (and cheaper) to register properly from the start.

Does a sole trader need to register as an employer?

Yes - if you hire staff and pay them through PAYE.

Being a sole trader doesn’t remove payroll obligations.

Getting employer registration right from day one

Registering as an employer with HMRC might feel like just another admin task - but it’s one of the most important steps when hiring staff.

Done properly, it means:

You stay compliant
You avoid penalties
Payroll runs smoothly
You can pay yourself or your team with confidence

If you’re planning to hire soon, start the process early so everything’s in place before payday.

Because payroll mistakes? They’re stressful, expensive, and completely avoidable.

FAQ - Frequently Asked Questions

Do I need to register as an employer if I’m a director?

Yes. If you pay yourself a salary through a limited company, you must register as an employer and operate PAYE.

How long does HMRC employer registration take?

It usually takes at least 5–10 working days to receive your employer PAYE reference by post. Sometimes weeks.

Is it free to register as an employer?

Yes. HMRC does not charge to register for PAYE.

How can you support us in this?