First-time employer’s guide to hiring staff

How to recruit staff

There are several keys things you need to do when employing staff for the first time.

Pay the right rates

To decide how much to pay your employee, find out the going rate for the job and calculate what you can afford to pay.

Remember that the total cost to you is likely to be more than the stated annual salary, as it will typically include pensions contributions, national insurance, sick pay and holidays.

In addition, your new team member must be paid no less than the National Minimum Wage, with rates reviewed each October.

More information can be found at go to www.gov.uk/browse/employing-people/payroll

Right to work

You have a legal obligation to check that your new staff member can legally work in the UK before you employ them.

If they don't and you employ them, then your company could be prosecuted and fined.

More information, including what evidence is required to check a legal right to work in the UK, can be found at gov.uk.

Other employment checks may be required such as a DBS check (previously known as a CRB check) for certain jobs including working with children or in healthcare. For more information on how to apply for a DBS check visit the gov.uk.

Statement of employment

If someone works for you for longer than one month, you must give them a written statement of employment.

This sets out their duties and responsibilities along with their details of their pay, hours of work, holidays and so forth.

Employees must receive a written statement within two months of starting work.

For a full list of what should be in the statement, visit www.gov.uk/employmentcontracts-and-conditions. You can download a template from the gov.uk website

Employment insurance

You'll need employers' liability insurance as soon as you employ staff - although this doesn't apply if you hire a family member.

This allows you to pay compensation if an employee is injured or becomes ill because of the work they do for you.

Your policy must cover you for at least £5 million - although most policies provide £10 million cover.

Without this insurance, you could face massive fines of up to £2,000 per day. Check the Financial Conduct Authority register. Register to find an authorized insurer.

Register as an employer

You must register as an employer with the HM Revenue and Customs (HMRC) before you start paying your new staff.

You can do this up to four weeks before you pay your new staff.

It's also your responsibility to ensure that the correct PAYE income tax and National Insurance deductions are made for your employees - and you'll need to pay employer's National Insurance for your employees.

If you run the payroll yourself, employees' payments and deductions must be reported to HMRC on or before each payday, and the amount you owe as an employer paid on a monthly basis.

However, if you pay less than £1,500 per month, you can arrange quarterly payments with HMRC.

Pensions

Every UK business that employs staff must by law offer - and pay into - a workplace pension.

Your staff must be automatically enrolled in your pension scheme (unless they choose to opt out) if they're aged between 22 and retirement age and earn at least £10,000 per year.

Small companies with no experience of workplace pension schemes should seek advice so they can prepare for the administration and cost of auto-enrollment.

For more information about staff pensions visit gov.uk