Table of contents
Table of contents
You might need to register for Pay As You Earn (or PAYE for short) if you employ someone and need to tell HMRC about tax deductions you make from their wages. What makes it a bit confusing is that not all employers need to register for PAYE reporting, so in this article we’ll explain the rules around PAYE registration.
If you run a business which employs other people or you plan to take on staff, you’ll need to register for PAYE if any of your employees earn more than the £96 per week threshold for 2026/27 – even if you only have one employee or director earning over the threshold. Employers should also register if any members of staff:
You’ll need to make sure that you’re registered for PAYE before your first payday.
Payroll is different to PAYE.
We’re putting that point in its own fancy box because it trips lots of people up. PAYE is part of the payroll process, but payroll refers to the entire process of paying staff in your business. It’s a crucial point because setting up your payroll doesn’t mean that you’ve enrolled for PAYE. Being registered for PAYE means you’ve signed up to use HMRC’s online service to send your payroll information to them.
Be aware that it can take up to fifteen working days to get your unique PAYE number from HMRC, so make sure you’re registered well in advance. The earlier the better. You can register up to a maximum of 2 months in advance.
It’s also essential that you keep payroll records to document the hours your employees work, and any leave such as sickness absences or holidays. You’ll need these so you can pay your staff correctly, even if you don’t need to register for PAYE.
Only if you employ someone else and they meet the criteria for registration. If you only ever work by yourself then you won’t need to register for PAYE to pay yourself, because sole traders can simply take any profits out the business for themselves.
If your self-employment is a side hustle to employment, then only your employer will need to register for PAYE. There’s nothing for you to worry about.
You’ll need to register for PAYE online via the HMRC registration page, and answer a series of questions about the people in your business. Some employers (such as insurance companies) are subject to special rules, but following the step-by-step guide will help you get everything set up correctly.
As part of the process, you’ll also need to confirm the details of your business, as well as what day you expect the first payday to fall on. It’s also essential that you:
Once registered it’s up to you whether you operate PAYE yourself using payroll software, or outsource it to a provider or accountant. Whichever one you go for, it’s your responsibility to keep up-to-date information about your employees.
The details of any payments and deductions should be reported each time you run payroll, and any deductions paid on to HMRC by the 22nd of each month.
Employers also need to let HMRC know if any information changes. For instance, the details of any new starters or leavers, or other updates such as a name change.
Solid bookkeeping habits are a crucial part of owning a business, especially when you employ staff and pay them wages. This is true whether your employees are earning enough to require you to register for PAYE or not. Don’t forget, salaries are an allowable expense, so you can offset these against your tax bill too!
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