If you recently started a business and are finding it increasingly hard to complete all required duties alone, you may be thinking about becoming an employer and recruiting an employee to free up time. Once you have recruited your first member of staff, you can spend more time on other critical duties such as marketing your business, meeting investors and so on. Taking on staff can work wonders for your business, but it does come with obligations too. Read on for top tips on hiring your first employee.
Hiring your first employee: comply with GDPR requirements
When becoming and employer you need to process employee data in line with GDPR. This means you can only collect and keep criminal record information if they’re working with vulnerable people or you’re legally permitted to do so for any other reason. GDPR was retained in UK law after the country exited the European Union.
Meet National Minimum Wage requirements
You also need to offer at least the national minimum wage when you’re taking a new employee in. Anyone aged 16-17 needs to be paid £4.62, whilst workers aged between 18 and 20 must be paid £6.56. Staff aged between 21 and 22 need to be paid £8.36 an hour, whilst everyone else aside from apprentices requires £8.91 an hour.
Consider taking on an apprentice – if you’re committed to their development
Apprentices can be very attractive to growing businesses as they can be seen as investments. They are more likely to remain with you if they feel they are learning a great deal in their role and may become extremely loyal to your business over time. You’ll need to pay them at least £4.30 an hour.
Register as an employer
You also need to register as an employer with the Government. HMRC will give you an employer PAYE reference number once you have done this so you can set up your payroll system. You’ll also need to take out employer’s liability insurance from an authorised insurer. You’ll need at least £5 million of cover. Tough penalties are given to employers that fail to take out this insurance. Anyone aged between 22 and the state retirement age that’s earning more than £10,000 a year must be enrolled onto a workplace pension scheme; they can then choose to opt out or stay opted in after the first contribution.
Register your employee
The employee will also need to be registered. You’ll require specific information on them such as student loan details and their P45 so you can work out their tax code. You must inform HMRC that you have taken on this employee before you pay them. Deductions including tax and national insurance need to be taken from their pay. Accountancy software can help you work out these deductions.
Talk to AO Accountants today
If you need help with the financial and administrative side of hiring your first employee, we can help. We have provided payroll services to companies from a wide range of sectors and can carry out a host of duties on your behalf so you can focus on running your business. To find out more about our payroll services, get in touch with us through this website. Alternatively, give us a call on 020 7164 6507 or send an email to contact@ao-accountants.co.uk.
