How to Register as an Employer for PAYE Before Your First Payday
Register your business as an employer with HMRC, get an employer PAYE reference and prepare to report payroll before paying staff for the first time.
GB United Kingdom
Business ~ 8 min read
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Updated 2026-09-10
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Register as an employer with HM Revenue & Customs before your first payday if you need a PAYE scheme. For the 2026 to 2027 tax year, HMRC's registration checker includes businesses paying any employee or director £129 or more a week, employing someone who has another job or receives a pension, providing employee expenses or benefits, or using subcontractors under the Construction Industry Scheme. You cannot normally register more than 2 months before you start paying people. HMRC sends your employer PAYE reference by letter. If your first payday arrives before the reference, run payroll, store the Full Payment Submission and send it to HMRC as a late FPS once you have the reference.
What you need
- Your business or organisation details, including its name, business address, nature of business and contact information.
- The date employees will start being paid or the relevant scheme start date.
- For a limited company, relevant details can include the Company Registration Number, registered office, Corporation Tax Unique Taxpayer Reference and director details.
- For a sole trader or partnership, relevant details can include the appropriate Unique Taxpayer Reference (UTR) and, for a sole trader, National Insurance details.
- Details of the person or payroll agent who will handle payroll or correspondence, where applicable.
- A confirmed first payment date: HMRC says you cannot register more than 2 months before you start paying people.
Eligibility
You normally need to register as an employer with HM Revenue & Customs (HMRC) when you start employing staff or when you use subcontractors for construction work as a CIS contractor. You must also register where you are effectively employing yourself, such as being the only director of a limited company, if a PAYE scheme is required. For the 2026 to 2027 tax year, HMRC's employer-registration checker asks businesses to register where they will pay an employee or director £129 or more a week, employ someone receiving a pension or who already has another job, provide employee expenses or benefits, use subcontractors under the Construction Industry Scheme, or need to reclaim CIS deductions. If none of the PAYE registration conditions applies, HMRC says a PAYE scheme may not be required, although payroll records can still be required.
How to do it
- Check whether a PAYE scheme is required. Consider expected pay, other jobs or pensions, employee benefits and expenses, and whether your business will operate as a Construction Industry Scheme contractor.
- Choose the correct employer-registration route. Most limited companies with 1 to 9 directors can register online. GOV.UK directs other business types through its registration checker to the appropriate route.
- Register before the first payday. Do not apply more than 2 months before you expect to start paying people.
- Wait for your employer PAYE reference. HMRC sends the reference in a letter. Use HMRC's current reply-time checker if you need an up-to-date estimate.
- Set up payroll. Choose suitable payroll software or a payroll provider, collect employee details and prepare the payroll records required for Real Time Information reporting.
- Report the first payment. Normally send a Full Payment Submission to HMRC on or before the employee's payday.
- If the PAYE reference has not arrived by payday, do not delay paying the employee solely for that reason. HMRC instructs new employers to run payroll, store the Full Payment Submission and send a late FPS after receiving the employer PAYE reference.
- Activate PAYE Online where required. Employers registered online are automatically enrolled. HMRC sends an activation code by post, normally within 10 days, and the code must be used within 28 days of the date on the letter.
When do you need to register as an employer for PAYE?
PAYE is HMRC's system for collecting Income Tax and National Insurance through payroll. A business does not register simply because it exists: the PAYE obligation begins when its employment or payment arrangements meet HMRC's conditions.
For the 2026 to 2027 tax year, HMRC's employer-registration checker includes businesses that will:
- pay an employee, including a company director, £129 or more a week;
- employ someone who is receiving a pension or already has another job;
- provide expenses or benefits to employees or directors;
- use subcontractors under the Construction Industry Scheme (CIS); or
- need to reclaim CIS deductions taken from the business's own payments.
HMRC also states that you normally register when you start employing staff and that a limited company may need to register even when the only employee is its sole director.
The £129 figure is the Lower Earnings Limit for 2026 to 2027. It should not be confused with the £96 weekly Secondary Threshold, which is the point above which standard employer Class 1 National Insurance can arise in 2026 to 2027.
How early should you register before the first payday?
You must register before the first payday so HMRC can issue your employer PAYE reference. However, HMRC does not allow you to register more than 2 months before you start paying people.
A practical time to apply is therefore after you have a confirmed employment and payment start date, but early enough for HMRC's registration letter to arrive before payroll reporting is due.
What information do you need to register?
The information depends on your business structure. HMRC's PAYE guidance identifies employer-record details including the employer name, business address, nature of the business, PAYE scheme start date and employer contact details.
For a limited company, relevant details can include the registered office, Company Registration Number, company UTR and details of directors. If you have not formed the company yet, see how to register a private limited company with Companies House before treating PAYE registration as your company-formation step.
For a sole trader, HMRC records may require the trader's name, address, National Insurance number and Self Assessment UTR where applicable. If you are only starting self-employment and have not dealt with that registration yet, see how to register as a sole trader.
How do you register with HMRC?
Most limited companies with 1 to 9 directors can use HMRC's online employer-registration service. GOV.UK provides a guided route for other types of business so that the correct registration process is used for the organisation's circumstances.
Registering as an employer is separate from other business-tax registrations. For example, needing PAYE does not by itself mean that you are VAT registered. If VAT applies to your business, follow the separate process to register your business for VAT with HMRC.
What happens after you register?
HMRC sends your employer PAYE reference in a registration letter. Your payroll reporting also uses an Accounts Office reference supplied by HMRC.
HMRC's employer-registration page does not promise one fixed number of days for every new registration. Instead, HMRC provides an online service for checking expected reply times for employers' PAYE enquiries and requests; the information in that service is updated weekly.
If you register as an employer online, HMRC says you are automatically enrolled for PAYE Online. An activation code is then sent by post within 10 days. You must activate the account within 28 days of the date on the letter.
What if the PAYE reference does not arrive before payday?
Do not invent a PAYE reference or submit payroll using another employer's details. HMRC gives a specific procedure if you need to pay an employee before your employer PAYE reference arrives:
- run payroll;
- store the complete Full Payment Submission (FPS); and
- send the FPS to HMRC as a late submission once you can report it using your employer details.
This is an exception to the normal rule that an FPS reporting an employee's pay and deductions should reach HMRC on or before payday.
What must you do before paying staff for the first time?
Employer registration is only the first part of payroll setup. HMRC's sequence for employers running their own payroll includes choosing payroll software, collecting and keeping employee records, telling HMRC about employees, recording pay and deductions, reporting the payment and paying HMRC what is due.
When a new employee starts, you normally collect information from their P45. If they do not have a P45 or more information is required, HMRC provides a Starter Checklist. The employee's starter information, tax code details, pay and deductions are then reported through the FPS.
Send the FPS on or before payday
Unless an official exception applies, an employer running payroll must report an employee's pay, payrolled benefits and deductions to HMRC in a Full Payment Submission on or before payday. Registering for PAYE does not replace this Real Time Information reporting requirement.
Report periods when nobody is paid
If you have an active PAYE scheme but do not pay any employees for at least one tax month, HMRC generally requires an Employer Payment Summary (EPS) to say that no payment is due. HMRC says this must be sent by the 19th of the month following the tax month in which nobody was paid.
What if you pay construction subcontractors?
A business acting as a contractor under the Construction Industry Scheme must register with HMRC for CIS. HMRC instructs a new CIS contractor to follow the process for setting up as a new employer.
CIS guidance says a contractor should register when it is about to take on and pay its first subcontractor, whether that subcontractor is expected to be paid gross or with deductions. HMRC then sets up the contractor scheme and, where requested or required, the PAYE scheme.
This should not be confused with a subcontractor registering itself for CIS. A business can be both a contractor and a subcontractor, in which case the obligations for each role apply separately.
Common mistakes to avoid
- Do not register more than 2 months early. HMRC requires a sufficiently definite start date for paying people.
- Do not wait until after the first payday when you already know a PAYE scheme is required.
- Do not assume that having no Income Tax deducted from a particular employee automatically means no PAYE scheme is needed; other registration conditions can still apply.
- Do not confuse the 2026 to 2027 £129 Lower Earnings Limit with the £96 employer National Insurance Secondary Threshold.
- Do not treat PAYE registration as the whole payroll process. You must still operate payroll and make the required Real Time Information submissions.
- If you use an accountant or payroll bureau, remember that HMRC states the employer remains legally responsible for completing its PAYE obligations.
Frequently asked questions
How long before my first payday can I register for PAYE?
You must register before the first payday, but HMRC says you cannot register more than 2 months before you start paying people.
Do I need PAYE if I am the only director of my limited company?
Potentially yes. HMRC says you must register as an employer even if you are only employing yourself, for example as the only director, where a PAYE scheme is required.
What is the PAYE registration earnings threshold for 2026 to 2027?
HMRC's employer-registration checker uses £129 a week for an employee or director in 2026 to 2027. Registration can also be required for other reasons, including another job or pension, employee benefits or expenses, or CIS activity.
Can I pay my employee if my employer PAYE reference has not arrived?
Yes. HMRC says to run payroll, store the Full Payment Submission and send a late FPS after you receive the employer PAYE reference.
Does registering for PAYE automatically set up PAYE Online?
If you register as an employer online, HMRC says you are automatically enrolled for PAYE Online. HMRC sends an activation code by post within 10 days, which must be activated within 28 days of the date on the letter.
Do I need to register as an employer if I use construction subcontractors?
If you operate as a contractor under the Construction Industry Scheme, HMRC requires CIS registration and directs new contractors through the new-employer registration process.
What happens if I have a PAYE scheme but pay nobody for a month?
HMRC generally requires an Employer Payment Summary to report that no payment is due. It must be sent by the 19th of the month following the tax month when no employees were paid.
Official sources
GOV.UK - Register as an employerGOV.UK - PAYE and payroll for employers: Introduction to PAYEGOV.UK - PAYE and payroll for employers: Setting up payrollHMRC - Rates and thresholds for employers 2026 to 2027HMRC - Payroll information to report to HMRCGOV.UK - PAYE Online for employersHMRC - Check when you can expect a reply from HMRCHMRC - Construction Industry Scheme contractor registrationHMRC - Construction Industry Scheme guide for contractors and subcontractorsHMRC - Employer records information required to set up an employer recordGOV.UK - Work out your new employee's tax codeGOV.UK - Starter checklist for PAYEGOV.UK - Tell HMRC no PAYE payment is dueRelated procedures
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