How to Register as an Employer for PAYE

Every UK limited company that pays a director or employee a salary must register as an employer with HMRC. This process — known as PAYE registration — sets up your company to deduct income tax and National Insurance contributions from wages and pay them over to HMRC. Crucially, even if you are the only person in your company, you still need to register as an employer if you take a salary.

Registering as an employer for PAYE means signing up your company with HMRC so you can operate a payroll scheme. You must register before your first payday, and you cannot register more than two months before you start paying people. Registration is completed online through HMRC's Government Gateway and results in an employer PAYE reference number, which you will use to report payments to HMRC.

Key takeaways

  • You must register as an employer before your first payday — registration cannot happen after you've already paid wages
  • HMRC does not allow registration more than two months before you intend to start paying employees
  • Director-shareholders who pay themselves a salary must register, even if they are the sole director and only worker
  • Registration is done online and generates two key references: an employer PAYE reference and an Accounts Office reference
  • Once registered, you must report every payment to an employee to HMRC on or before the payday using Real Time Information (RTI)

Who Needs to Register as an Employer for PAYE?

You must register as an employer if your company pays wages, salaries, or directors' remuneration to any person — including yourself. This applies to:

  • Limited companies paying a director's salary — even a single director taking a small monthly salary triggers the requirement
  • Companies with employees — any member of staff on the payroll
  • Companies with construction subcontractors — you may also need a separate Construction Industry Scheme (CIS) registration
A common misconception is that owner-directors are exempt because they control the company. They are not. Your limited company is a separate legal entity from you personally, and as its director you are technically employed by it. If the company pays you a salary, it must operate PAYE.

The only scenario in which PAYE registration is not required is where you draw no salary at all and pay yourself entirely through dividends. Many directors choose a small salary combined with dividends for tax efficiency — but the moment a salary appears, PAYE registration is necessary. See our guide to how to pay yourself from a limited company for more on structuring your remuneration.

When Must You Register?

The timing rules are strict and enforced:

  • You must register before your first payday. HMRC needs to create your employer record so you can submit your first payroll report.
  • You cannot register more than two months before you start paying people. This window prevents companies from holding an open PAYE scheme indefinitely.
In practice, if your first director's salary is due in September, you can register from July onwards — but not before. Aim to register four to six weeks before your first payday to allow time for HMRC to process your application and post your references.

What if Your PAYE Reference Hasn't Arrived in Time?

If you have registered but your employer reference number has not arrived by your first payday:

  1. Run your payroll as normal and calculate the correct deductions
  2. Prepare your Full Payment Submission (FPS)
  3. Send the FPS to HMRC as a late submission once you receive your reference
HMRC generally accepts late submissions in this situation. Do not delay paying your employee or director — pay on time and submit the report once your references arrive.

What Information Do You Need Before Registering?

Gather the following before you start your online registration:

  • Company registration number — from your Companies House certificate of incorporation
  • Company UTR (Unique Taxpayer Reference) — the 10-digit reference HMRC issued when you registered for corporation tax. If you are unsure where to find it, see our guide on what a UTR number is.
  • Government Gateway credentials — you will need your company's Government Gateway user ID and password. If you have not set this up yet, our Government Gateway setup guide walks you through the process.
  • Registered company name and address
  • The date you intend to start paying employees — this is your proposed first payday
  • Details of directors and employees — names, addresses, and National Insurance numbers
Make sure you use the company's Government Gateway account, not your personal one (which you use for Self Assessment). Mixing the two up is one of the most common registration errors.

How to Register as an Employer Online — Steps

Most limited companies with one to nine directors can complete PAYE registration online.

Steps

  1. Sign in to HMRC Online Services using your company's Government Gateway credentials.
  2. Select "PAYE for employers" and then "Register as a new employer."
  3. Complete HMRC's eligibility checker to confirm that online registration is available for your business type.
  4. Enter your company details: registration number, UTR, registered address, and the date of your first intended payday.
  5. Provide details of any directors or employees you plan to pay, including their NI numbers.
  6. Review and submit your registration.
  7. HMRC will post your employer PAYE reference number and Accounts Office reference to your registered address, typically within five working days.
Once you receive these references, you can configure your payroll software and begin submitting Real Time Information reports.

What References Will You Receive?

After successful registration HMRC will send two reference numbers:

Employer PAYE Reference Number This identifies your company as a PAYE employer. It looks like: `123/AB12345`. Your employees will need this for P60s and when dealing with the DWP. You will include it on every payroll submission.

Accounts Office Reference This is used when paying your PAYE bill to HMRC. It looks like: `123PA12345678`. Keep it safe — you will use it every month (or quarter) when paying over deductions.

What Payroll Software Do You Need?

Once registered, you need payroll software that can submit Real Time Information to HMRC. RTI requires you to report every payment to an employee on or before the date you pay them — this is a legal requirement, not optional.

Options for small limited companies include:

  • HMRC's Basic PAYE Tools — a free download from GOV.UK, suitable for companies with fewer than ten employees, though it has limited features
  • Commercial payroll software — products such as BrightPay, Moneysoft, Sage Payroll, and FreeAgent Payroll offer automation, payslip generation, and auto-enrolment support
  • Accountant-managed payroll — many accountants offer a payroll bureau service for small companies, which means the accountant handles all submissions on your behalf
For a single-director company taking a modest monthly salary, HMRC's Basic PAYE Tools or a simple commercial product is usually sufficient. The key requirement is RTI capability.

Auto-Enrolment and Workplace Pensions

Registering as an employer also activates your workplace pension auto-enrolment obligations. The Pensions Regulator requires employers to automatically enrol eligible employees into a pension scheme.

For a single director-shareholder with no other employees:

  • You are excluded from auto-enrolment if you are the company's only director and there are no other workers
  • Once you hire an employee who is not a director, auto-enrolment obligations apply
If you do need to auto-enrol employees, check The Pensions Regulator's website for your duties and the minimum contribution levels.

Your Ongoing PAYE Obligations After Registration

Registering is just the beginning. Once registered, your ongoing duties include:

  • Full Payment Submission (FPS) — submit to HMRC on or before each payday, detailing every payment and deduction
  • Employer Payment Summary (EPS) — submit when you have no employees to pay in a period, or to claim statutory payment recoveries
  • Paying HMRC — deducted income tax and National Insurance must reach HMRC by the 19th of the following month (22nd for electronic payments). Small employers paying less than £1,500 per month can apply to pay quarterly
  • Year-end reporting — submit a final FPS at the end of the tax year (5 April) and issue P60s to all employees
  • P11D reporting — if directors or employees receive benefits in kind, such as a company car or private medical cover, file P11Ds or payroll those benefits
Record keeping is also compulsory: you must retain payroll records for at least three years from the end of the relevant tax year.

Director Salary and National Insurance Planning

The most common payroll structure for owner-managed limited companies is a small director's salary combined with dividends. This approach can be tax-efficient because salary attracts income tax and National Insurance, while dividends are taxed at lower dividend rates.

The optimal salary level depends on the current tax year's NI thresholds. Many directors pay themselves at the Secondary Threshold (the point at which employer NI becomes payable) to avoid paying employer's National Insurance while still qualifying for a National Insurance credit year. For the current recommended salary level see our optimal director salary guide for 2026/27.

If you pay yourself through dividends as well as salary, you will also need to register for Self Assessment and file a personal tax return each year. Our dividends vs salary guide covers the tax implications in detail.

Common Mistakes When Registering for PAYE

Registering too late. Some directors pay themselves in their first month and then try to backdate their registration. HMRC does not allow retrospective registration — you should register before paying.

Forgetting to register at all. A common oversight, particularly for directors who are used to operating as sole traders. HMRC identifies unregistered employers through data matching with Companies House, bank records, and Self Assessment returns.

Using the wrong Government Gateway account. PAYE registration must go through the company's account. Personal Government Gateway accounts are for Self Assessment and cannot register an employer.

Not closing the scheme when it is no longer needed. If you permanently stop paying a salary, notify HMRC to close your PAYE scheme. Leaving it open generates penalty notices for missed submissions.

Frequently Asked Questions

Do I need to register for PAYE if I am the only director?

Yes — if you pay yourself a salary, you must register, even if you are the company's only director and only worker. The company is a separate legal person that employs you. The only exception is if you pay yourself entirely through dividends with no salary at all, in which case PAYE registration is not required.

How long does PAYE registration take?

HMRC typically processes online registrations and posts the references within five working days of submission, though postal delays can extend this. Allow two to three weeks before your first intended payday to be safe. You can register up to two months in advance, so there is no reason to leave it to the last minute.

Can I register for PAYE by phone instead of online?

Yes. You can call HMRC's New Employer Helpline on 0300 200 3211 (Monday to Friday, 8am to 6pm) to register by phone. Have your company registration number and UTR ready. Online registration is usually faster.

What happens if I pay wages without registering for PAYE?

HMRC may raise a PAYE assessment for unpaid tax and National Insurance, plus interest and penalties. The company — not you personally — is liable for these amounts, but they will affect the company's finances. HMRC can also impose penalties for late registration under its employer compliance review process.

Do I need to register if my salary is below the PAYE threshold?

You may not need to deduct income tax if the salary is below the personal allowance, and you may not need to pay National Insurance if it is below the relevant threshold. However, you should still register and keep payroll records. Running payroll even at a nil tax and NI level creates an earnings record for the employee and protects their State Pension entitlement.

Summary

Registering as an employer for PAYE is a straightforward online process, but its timing rules are firm: register before your first payday and no more than two months in advance. Once HMRC processes your registration, you will receive an employer PAYE reference number and Accounts Office reference — both essential for running payroll and paying HMRC. Getting this in place early avoids penalties and keeps your payroll compliant from day one.