Taking on your first employee is one of the biggest steps a small business can take. GOV.UK publishes a step-by-step guide to getting ready, and it works well as a checklist whatever your sector. This article walks through the stages it describes and adds some practical thoughts on how to use them. It is general information, not legal or tax advice, and the official pages are the place to check current rules.
Start by confirming the person is an employee
GOV.UK says its steps apply if you want to take on someone with the employment status of "employee" for the first time. It also points to guidance on who counts as an employee, and on your responsibilities if you are hiring agency staff, freelancers, consultants or contractors. This matters because the obligations that follow depend on status. If you are unsure, read the official status guidance before you advertise the role rather than after.
Check that you can afford employees
The guide asks you to look at the full cost of employing someone, not only the salary. It lists the National Minimum Wage, employer National Insurance contributions, statutory sick pay, workplace pension contributions, statutory maternity pay and leave, and statutory paternity pay and leave. The page itself does not quote figures, and rates change, so take current numbers from GOV.UK when you build your budget.
A practical habit is to build a simple cost model and test it with a few "what if" scenarios, such as a period of sickness or a period of leave. That way the first absence does not arrive as a surprise to your cash flow.
Make the workplace safe and accessible
The next step covers preventing discrimination, making the workplace accessible for disabled employees or those with health conditions, keeping employee data safe, fire safety, and health and safety, for which GOV.UK refers you to the Health and Safety Executive. For a small team, the useful discipline is to write down who is responsible for each area, keep simple records, and review them when something changes, such as a move to new premises.
Register as an employer and set up PAYE
GOV.UK states: "You need to register with HMRC so you can pay tax and national insurance for your employees." You then need to decide how to run payroll. If you run it yourself, the guide says to choose payroll software. Many small businesses weigh up doing this in-house against using a payroll provider; whichever you choose, make the decision early so that the first pay date is not a scramble.
Understand your workplace pension responsibilities
Workplace pensions have their own step. The guide treats this as something to understand before you employ anyone, and links to the detailed official guidance. Because pension duties involve both contributions and communication with your employees, it is worth reading that guidance in full and noting any deadlines it sets.
Get Employers' Liability insurance
The guide also lists Employers' Liability insurance as a step in its own right. Check the official guidance on whether and how it applies to your business, and keep the certificate where it can be found when needed.
Then recruit
Recruiting and employing someone is the final stage in the sequence. It is tempting to start with the job advert, but the order matters: by the time you make an offer, you should know what the role will cost, how you will pay your new colleague and what protections you have in place.
A simple way to use the list
Turn the stages above into a one-page checklist. Give each item an owner and a date, tick it off as you go, and keep the page with your business records. Review it whenever the rules change or when you hire your next person. Small businesses that treat hiring as a process, rather than a one-off event, tend to find it far less stressful.
Source: GOV.UK, "Get ready to employ someone for the first time: step by step" (https://www.gov.uk/employing-staff), read 15 October 2026. Rates, thresholds and rules change; please check the official pages. General information only.