Hiring people for the first time is a big step for any business. One of the first official things you’ll need to do is register as an employer with HMRC. This isn’t just admin, it’s what lets you run PAYE (Pay As You Earn), deduct the right amount of Income Tax and National Insurance from your staff’s pay, and keep HMRC happy.

The process can feel a little daunting if you’ve never done it before, but don’t worry. This guide will walk you through what it means to register as an employer (and whether you need to), when to do it, how to do it, and what happens once you’re registered. 

We’ve also included a few questions new employers tend to ask, so you can feel confident you’re getting it right. 

What does it mean to register as an employer?

Registering as an employer with HMRC is basically telling them that you’re going to pay staff and handle PAYE. Once you’ve registered, HMRC will give you an employer PAYE reference number and an Accounts Office reference. These are your “keys” to reporting payroll and paying the correct tax and National Insurance.

It’s important to register before your first payday so that everything is set up correctly. You can’t register more than two months before you pay your first employee, so it’s a bit of a timing game.

Don’t worry, registering is free. It won’t result in an unexpected bill from HMRC. It simply sets up a record so you can run payroll properly when the time comes.

Who needs to register as an employer?

You normally need to register as an employer if:

• You’re paying someone who counts as an employee through PAYE.
• You’re hiring subcontractors on construction sites in certain circumstances. 
• You’re a Limited Company and are paying yourself as a director.

There are a few rare exceptions, like very low-pay situations where staff earn below tax and National Insurance thresholds, don’t claim any state benefits or claim company expenses, and aren’t paying into a pension. You can view the full criteria for when you need to register here. But for most new businesses hiring anyone at all, you’ll need to register.

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When should you register?

Timing is important with employer registration:

If your reference number hasn’t arrived by payday, don’t panic. You can still run payroll and submit your Full Payment Submission (FPS) once the reference arrives.

What you need before registering as an employer with HMRC

Before you start the process of registering as an employer, make sure you have all the necessary information on hand. This includes your business name and registered address, as well as your contact details, such as email and phone number. 

You should also have a clear idea of the date you plan to start paying staff. If you’re registering as a Sole Trader or individual employer, you’ll need your National Insurance number. You don’t need payroll software at this stage, but it’s a good idea to have a plan for how you’ll run payroll once registration is complete.
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How to get registered as an employer

HMRC gives you a few options for registering depending on your business type.

Registering online (the easy way)

Most businesses, especially Limited Companies, find online registration the simplest.

1. Go to the ‘Register as an employer’ page.
2. Answer a few questions about your business and when you’ll start paying employees.
3. Submit the form.

HMRC will then send you a letter with your employer PAYE reference and Accounts Office reference. Keep these safe, as you’ll need them when submitting payroll information (FPS) and paying tax and National Insurance to HMRC.

Register by phone

If online registration isn’t suitable, for example if you’re employing someone at home like a nanny or carer, you can register by calling the HMRC New Employer Helpline on 0300 200 3211. An adviser will then take you through it step by step.

Register by post

This is now quite rare, but if you’re old school, you can still register by post. Be warned though, this method is slower than online or phone registrations. So most only use this method if other options aren’t suitable. 
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After you’ve registered with HMRC

When HMRC have processed your registration, you’ll get a letter containing:

Set up PAYE online

Next, enrol for the PAYE Online service so you can submit payroll information digitally. You’ll need a Government Gateway account if you don’t already have one. HMRC will send an activation code by post to complete the setup.

Choose payroll software

Most employers now send payroll information online, which means you’ll need software that can calculate pay, deductions, and generate the Full Payment Submission (FPS) for HMRC. Instead of scrambling to piece together separate systems, you can lean on our Crunch accounting and payroll service. 

Our payroll is built right into your Crunch account and designed specifically for small businesses and directors. It handles:

• Running monthly payroll for directors and employees.
• Calculating Employer National Insurance.
• Submitting Real Time Information (RTI) to HMRC.
• Generating payslips.
• Preparing for Year End reports like P60s and P11Ds.

All of this lives in one place, so you don’t have to juggle multiple tools or worry about compliance issues on payday. And because it’s backed by expert UK‑based accountants, you’ve always got guidance when you need it.

Collect employee information 

Before running payroll, you’ll need to gather:

• Employee full name, National Insurance number, and correct tax code.
• Records of pay and any statutory payments.
• Details of pension contributions.
• Information on any benefits, expenses, or other perks.

Tip: Good record keeping makes life so much easier down the line. 
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Running payroll and reporting to HMRC

Once you’re registered and set up you’ll need to:

• Send a Full Payment Submission (GPS) to HMRC each pay period.
• Pay tax and National Insurance using your Accounts Office reference.
• Keep records up to date and submit returns on time. 

Remember, payroll is ongoing. Every time you pay someone, HMRC needs to know about it. If you’ve just hired your first employee and are wondering about payroll tax, we’d recommend checking out our guide “What is payroll tax in the UK?”.

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Common employer questions about registering with HMRC as an employer

Can I pay staff before my registration is complete?

Yes. If your employer PAYE reference hasn’t arrived before you need to pay someone, you can still run payroll and pay your employees on schedule. In this case, you run payroll as normal and store your Full Payment Submission (FPS). Once your PAYE reference number arrives from HMRC, you then send that FPS to HMRC as a late submission.

What happens if I don’t register?

You must register as an employer with HMRC before you start running payroll. You can only register up to two months before your first payday. However, as explained above, if your reference hasn’t arrived by the first payday, you can still pay employees and submit your Full Payment Submission (FPS) once you have it. Leaving registration too late can cause complications and may lead to penalties, so it’s best to plan ahead and start the process early.

Do company directors count as employees?

Yes. If you pay yourself as a director of a Limited Company, you must register as an employer and operate PAYE.
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Getting started the right way

Registering as an employer with HMRC might feel like just another piece of admin on the pile, but it’s one of the most important steps for any business hiring staff. Getting it right from the start helps you run smoothly, stay fully compliant, and avoid costly mistakes or stress later on.

Start the process early to give yourself plenty of time to receive your employer PAYE reference, and set up PAYE properly. Once that’s done, you can pay your employees or yourself with confidence, knowing everything is correct and above board.