If you’re hiring someone for the first time — whether that’s a part-time assistant, a family member, or even just paying yourself through your limited company — you’ve probably been told you need to “set-up PAYE.”
If you’ve got no idea what that actually means, don’t worry. This is your quick, no-jargon guide to getting PAYE sorted — and figuring out whether it’s something you want to handle yourself or hand off to someone else.
What is PAYE?
PAYE stands for Pay As You Earn. It’s how HMRC collects income tax and National Insurance from people’s wages — automatically, every time they’re paid.
If you’re paying someone more than £123 a week (2025/26 tax year), you’ll probably need to run their pay through PAYE. That applies even if:
The person is a casual worker
They’re a family member
You’re a director paying yourself a salary
Once PAYE is set up, you’ll be responsible for calculating what tax and NI needs to come off their pay, sending that info to HMRC, and paying them the difference. You’re also the one who pays HMRC what’s owed.
How to set up PAYE in 5 steps
Here’s how to get PAYE up and running quickly — no fluff.
1. Register as an employer
Head to gov.uk/register-employer and let HMRC know you’re hiring someone. It takes about 10 minutes, and you’ll get your PAYE reference numbers within 5–10 working days.
2. Pick payroll software
You’ll need software to run payroll properly — it calculates deductions, creates payslips, and sends reports to HMRC. HMRC offers a free tool (Basic PAYE Tools), but most business owners prefer something smoother like BrightPay, Modulr, or Xero Payroll.
3. Get your employee’s details
You’ll need their name, NI number, start date, and possibly a P45. This info gets entered into your payroll software before their first payday.
4. Run payroll and report to HMRC
Each time you pay someone, your software will:
Work out what tax/NI needs to be taken off
Produce a payslip
Submit a Full Payment Submission (FPS) to HMRC
This must be done on or before payday.
5. Pay what you owe to HMRC
You’ll usually pay HMRC monthly. The deadline is the 22nd of the following month, if you pay electronically.
Can you do PAYE yourself?
Yes, you can! Lots of small business owners run PAYE themselves, especially if they’re only paying one person or just themselves.
If you’re organised, tech-savvy, and don’t mind reading HMRC guidance when something odd crops up, it’s definitely doable.
BUT, it comes with responsibility — and potential penalties if you get it wrong. So if you:
Feel unsure about tax codes or legal obligations
Don’t want to deal with last-minute submissions
Would rather focus on running your business
…then it might be worth getting someone to do it for you. We can help — book a call and we’ll get you sorted.
Still weighing up your options? Here are some guides that might help:
What about pensions?
If your employee is aged between 22 and state pension age and earns over £10,000 a year, you also need to enrol them in a workplace pension and contribute to it.
This is called auto-enrolment, and it’s a legal requirement. Most payroll software will help with this too, but it’s one more thing to stay on top of.
Not sure what to do next?
If you’re thinking:
“I just want to pay someone without messing it up…”
You’re not alone. We help loads of new employers set up PAYE properly from the start — and keep it running smoothly month to month. We’ll:
Register you with HMRC
Set up your payroll system
Run PAYE and pensions for you
So you can stop stressing and get on with the stuff you actually enjoy.
Want help with PAYE?
Book in a call below and we’ll talk you through your options — no pressure, no jargon.
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