Do I need to register for PAYE to pay just one employee?

Yes, you must register for PAYE with HMRC before paying any employee, even if it's just one person and even if their salary is below the tax threshold. This is a legal requirement for all UK employers.

How much does it cost to run payroll for employees?

Payroll costs vary depending on your approach. DIY payroll using HMRC's free tools costs nothing but requires time. Payroll software costs £5-£15 per month, whilst professional payroll services typically cost £20-£50 per month depending on the number of employees.

When do I need to pay HMRC the tax and National Insurance I deducted?

You must pay HMRC the Income Tax and National Insurance contributions you deducted from employees' pay by the 22nd of the month following the pay period (or 19th if paying by post). For example, January deductions are due by 22nd February.

What information do I need from new employees to set up payroll?

You need their full name, address, date of birth, National Insurance number, P45 from previous employer (or use emergency tax code), bank account details for payment, and any pension or student loan information.

Can I pay employees cash instead of bank transfer?

Yes, you can legally pay employees in cash, but you still need to operate PAYE, provide payslips, submit RTI to HMRC, and pay deductions to HMRC. Bank transfers are recommended for better record keeping and security.

What happens if I don't submit RTI on time?

Late RTI submissions can result in penalties from HMRC. The penalty starts at £100 per month for small employers (fewer than 50 employees) and increases for continued late submissions. Submit RTI on or before the payment date to avoid penalties.

Do I need to provide a payslip to employees?

Yes, it's a legal requirement to provide all employees with a payslip showing gross pay, deductions (tax, National Insurance, pension contributions), and net pay. This can be provided on paper or electronically.

How can GoForma help with employee payroll?

GoForma's accounting packages include monthly payroll services, PAYE registration, RTI submissions, and payslip provision. We handle all the compliance requirements whilst you focus on running your business. Contact us for a free consultation about payroll services.

How do I pay an employee?

Published Apr 13, 2021

Last updated Jan 29, 2026

5 min read

Written by Jordan MaceyAAT

Read our quick summary:

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<p>If you're paying an employee for the first time, you'll need to set up payroll. You need to take the following steps:<br></p><ol><li><a href="https://www.gov.uk/register-employer" target="_blank">Register as an employer</a> with HM Revenue and Customs (HMRC) and get a login for <a href="https://www.gov.uk/paye-online" target="_blank">PAYE Online</a>.</li><li><a href="https://www.gov.uk/payroll-software" target="_blank">Choose payroll software</a> to record employee's details, calculate pay and deductions, and report to HMRC.</li><li><a href="https://www.gov.uk/paye-for-employers/keeping-records" target="_blank">Collect and keep records</a>.</li><li><a href="https://www.gov.uk/new-employee/" target="_blank">Tell HMRC about your employees</a>.</li><li><a href="https://www.gov.uk/running-payroll/" target="_blank">Record pay, make deductions and report to HMRC</a> on or before the first payday.</li><li><a href="https://www.gov.uk/running-payroll/paying-hmrc" target="_blank">Pay HMRC</a> the tax and National Insurance you owe.<br></li></ol>

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How do I pay an employee?

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