Hiring a New Employee? How to Make Sure their PAYE is in Proper Order 

When you are running your own business enterprise and you can obviously see that your business is growing, there may come a point when you may need to hire an additional employee or staff. An additional employee can do wonders for your business, especially if they are quick learners, have a good idea of what is expected of them, and show the right commitment and dedication to their job and the work they have to do. But as an employer, you have a number of responsibilities as well. And one of these responsibilities is to make sure that your new employee’s PAYE is in proper order.

Inform HMRC

The first thing you need to do when you take on a new employee is to inform HMRC. If this is your very first employee, you need to register yourself as an employer with HMRC as well.

Do you need PAYE for them?

If you have a new employee, you have to find out if they need to be paid their salary through PAYE. Usually, you need to pay your employee via PAYE if they are earning more than or equal to £112 per week, which amounts to £5,824 annually (or £486 per month). However, if you have an employee or worker who is classified as self-employed, then you do not have to pay them via PAYE.

Your employee’s tax code

In addition to checking if you should pay them via the PAYE system in the first place, you should also make it a point to get additional information from them so you can register and provide them with the proper tax code as well as ‘starter declaration’ on your payroll management software.

For the information you need, you can always refer to your employee’s forms, especially their P45 form, but if they don’t have an up-to-date P45 form, they would have to fill in a Starter Checklist form (which is the replacement for the P46 form). The following information is required from your employee: their birth date, gender, full postal address, and starting date in your company. Their P45 should also have their full or complete name, their leaving date from their previous job, and their total salary as well as taxes paid during the current tax year. The P45 should also include the status on their student loan (if they have any), their number for National Insurance, and their current tax code.

With the information mentioned above, you should be able to work out your new employee’s tax code as well as their ‘starter declaration,’ which are both needed in order for you to register them in your payroll management software and with HMRC.

Registering with HMRC

Once you have all the information required, you can now fully register your new employee or staff with HMRC on a FPS (Full Payment Submission) report when you pay them their salary for the first time.

With the proper information and know-how, it shouldn’t be too difficult to work out your new employee’s complete registration and manage them in your payroll. But if you would like to do away with the paperwork and this necessary but tedious task, you can always depend on outsourced payroll service providers such as www.berkeleyhamilton.co.uk, which is always ready and willing to manage your payroll for you. Outsourcing payroll to providers like www.berkeleyhamilton.co.uk gives you immense benefits, freeing your time and making sure that your payroll processes and accounts are in order at all times.

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