Being an employer

1.  Decide how much you are going to pay

You must pay them at least the minimum wage.  The following table details the national minimum wage rates for 2023/24. 

2.  Agree a gross salary 

We strongly recommend agreeing a gross salary, whether by hour, by month or annually. This is to protect you, the employer, because it limits your liabilities. Conversely, if your employee’s personal tax allowance is reduced for any reason and you’ve agreed to pay on a net amount basis rather than agree a gross amount, it will mean that you as the employer, will have to bear any additional costs incurred as the gross amount would therefore increase to keep the net the same.  

3.  Check if someone has the legal right to work in the UK

You may have to do other employment checks as well.  

4.  Check if you need to apply for a DBS check (formerly known as a CRB check)  

Your employee may require one if you work in a field that requires it, eg with vulnerable people or security.  Find out more on the Government website.  

5.  Get employment insurance  

You need employers’ liability insurance as soon as you become an employer Check if your existing insurance policy covers employers’ liability insurance as many do as standard. If not, contact the provider to see if they can offer it as an add-on as this is often simpler than having different policies for different things. 

6.  Provide a contract of employment for your employee 

You need to give your employee a written statement of employment (contract of employment) if you are employing someone for more than one month.  Feather Payroll Solutions works closely with a specialist employment lawyer.  Ask for information.

7.  Tell HM Revenue and Customs (HMRC) by registering as an employer  

If you employ anyone and are paying them £120 per week   or more, you will need to register for PAYE and operate payroll. You can do this up to four weeks before you pay your new staff  

Liaising with HMRC on your behalf is part of the Feather Payroll Solutions all-inclusive package. 

8.  Check if you need to automatically enrol your employee(s) into a workplace pension scheme  

The employer must automatically enrol all employees into a pension scheme and make contributions to their pension if all the following apply:

• they are classed as a ‘worker’ 
• they are aged between 22 and State Pension age
• they earn at least £10,000 gross per year in your employment
• they usually work in the UK     

Thresholds are as follows: 

Employer minimum contribution 3% 

Staff minimum contribution        5% 

Total minimum contribution        8%    

Feather Payroll Solutions can assess and guide you through the auto-enrolment process then operate it on an ongoing basis. 

9.  Understand taxable benefits 

Our team can guide you on the minefield of working out what are and are not taxable benefits.