How to Register for PAYE as an Employer (2026/27 Guide)

To register for PAYE as an employer, sign in to (or create) your HMRC business tax account, then complete the online register as an employer service on GOV.UK. HMRC posts your employer PAYE reference and Accounts Office reference, normally within 15 working days. You must register before your first payday, and you cannot register more than two months ahead.

That is the short version. Below is exactly when you have to do it, the 2026/27 thresholds that trigger it, what to have ready, how long it takes, what it costs, and how to get payroll running afterwards. Every figure here was checked against gov.uk on 27 July 2026.

When do you need to register for PAYE as an employer?

You must register for PAYE before your first payday once you pay any employee, including yourself as the sole director of a limited company, at or above the secondary threshold of £96 a week (£5,000 a year) for 2026/27. You also register if a worker has another job, gets benefits or receives statutory pay.

In practice, a PAYE scheme is needed once any of these apply:

• You pay an employee £96 or more a week (the secondary threshold for 2026/27 is £96 a week, equal to £417 a month or £5,000 a year, the point at which employer National Insurance starts).
• The employee already has another job or receives a pension.
• You provide expenses or benefits such as a company car or private medical cover.
• The worker gets statutory pay such as sick, maternity or paternity pay, explained in our guide to statutory pay for small businesses, covering SSP, SMP and holiday pay.

If you only pay staff below these thresholds and none of the other triggers apply, you generally do not need a PAYE scheme, but you must still keep payroll records. Here are the key 2026/27 thresholds, per HMRC's rates and thresholds for employers:

Do limited company directors need to register for PAYE?

Usually, yes. Most owner-directors take a small salary plus dividends. The moment that salary reaches the thresholds above, or you want to claim statutory payments or record National Insurance towards your State Pension, you need a PAYE scheme. Many directors set one up from day one even on a modest salary. Working out the right mix is its own decision: our guide to the most tax-efficient salary and dividend split for 2026/27 shows where to set a director's salary before you register the scheme.

Why the Lower Earnings Limit still matters below the threshold

The Lower Earnings Limit (LEL) is £129 a week for 2026/27. Paying an employee (or director) at or above the LEL protects their State Pension and benefits record for the year even though no National Insurance is actually due until earnings pass the higher thresholds. That is why many directors set a salary at or just above the LEL: it banks a qualifying year at no NIC cost. Above the secondary threshold of £96 a week the employer starts paying National Insurance, and above the £12,570 Personal Allowance the employee starts paying income tax.

What you need before you start

Before you begin, gather your National Insurance number, your business Unique Taxpayer Reference, your Companies House registration number and registered address, the date of your first payday, and a Government Gateway user ID. Having these to hand lets you finish the online registration in a single sitting rather than stopping to dig them out.

• Your National Insurance number (and those of any directors).
• Your business UTR (Unique Taxpayer Reference), which for a limited company is issued shortly after incorporation.
• Your company registration number and registered address (your Companies House details).
• The date of your first payday and how many employees you expect.
• A Government Gateway user ID (you can create one during the process). If you are unsure how HMRC's various codes work, our guides on what a tax reference means and how to find your income tax reference number explain each one.

How to register for PAYE: step by step

Registering takes five steps: open the GOV.UK register as an employer service, sign in to or create a Government Gateway account, add the PAYE for Employers service to your business tax account, submit your details and expected first payday, then enrol for PAYE Online once your references arrive. Most applications take under 20 minutes to submit.

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1. Go to GOV.UK. Open the official register as an employer service and choose the route that matches you: sole trader, limited company, partnership, or one-off employer.
2. Sign in or create a Government Gateway account. This becomes your login for HMRC's online services.
3. Add the PAYE for Employers service to your business tax account and complete the registration form with your business details and expected first payday.
4. Submit and wait for your references. HMRC sends your employer PAYE reference (which looks like 123/AB456) and your Accounts Office reference by post.
5. Enrol for PAYE Online. Use the activation details to access PAYE Online, where you view filings, payments and any notices from HMRC.

How long does PAYE registration take?

HMRC can take up to 15 working days to issue your employer PAYE reference, and longer at busy times or if your business is based abroad. Because you cannot register more than two months before your first payday, the safest window is roughly four to six weeks before you plan to pay anyone. You can run payroll and work out deductions while you wait for the reference, then report to HMRC once it arrives.

How much does it cost to register for PAYE?

Registering for PAYE with HMRC is free. There is no fee to set up an employer scheme. The real costs of being an employer come afterwards: payroll software, your own time running it, or an accountant's fee, plus the employer National Insurance and pension contributions you pay on top of wages.

Several HMRC-recognised payroll packages are free for smaller employers, typically those with fewer than 10 employees, so software need not add to the cost early on. The larger ongoing figure is employer (secondary) Class 1 National Insurance at 15% on pay above the £96-a-week secondary threshold. Eligible employers can offset up to £10,500 of that with the Employment Allowance, though a company whose only employee paid above the secondary threshold is the sole director cannot claim it. If you would rather not run any of this yourself, our payroll service handles registration, filings and deadlines for a fixed fee.

What happens if you register for PAYE late?

If you register after your first payday, you must still account for all the income tax and National Insurance due from that first payment onwards. HMRC can charge penalties and interest on PAYE reported or paid late, and a late Full Payment Submission can trigger a late-filing penalty. Registering early is the simplest way to avoid a penalty from day one.

You cannot backdate away the obligation: HMRC treats the tax as having been due from the first payday regardless of when the scheme was set up. If you have already paid someone and only now realise you needed a scheme, register straight away and bring your payments to HMRC up to date, then keep to the monthly deadlines going forward.

After you have registered: setting up payroll

Getting the reference is only step one. To run payroll legally you then choose HMRC-recognised software, report every payment in real time, pay HMRC the tax and National Insurance you withhold by the monthly deadline, and set up a workplace pension for eligible staff. The table below sets out the ongoing duties and when each one falls.

• Choose payroll software that is recognised by HMRC, so you can send Full Payment Submissions (FPS) on or before each payday. Our wider PAYE and payroll guide for employers walks through the setup.
• Report in real time (RTI). Every time you pay staff, you tell HMRC what you have paid and deducted, on or before payday.
• Pay HMRC the income tax and National Insurance you have withheld by the 22nd of the following tax month if you pay electronically (the 19th if you pay by post).
• Set up a workplace pension. Auto-enrolment duties start from your first payday for eligible staff, as covered in our note on auto-enrolment for small employers.
• Budget for employer National Insurance. You pay secondary Class 1 NIC at 15% on earnings above the secondary threshold. Our note on employers' National Insurance for 2026/27 sets out the rate and the Employment Allowance in full.

Get any of this wrong and the penalties stack up, which is where solid record-keeping earns its keep. Our bookkeeping services keep your payroll figures, deadlines and HMRC submissions in order so nothing slips.

Common mistakes to avoid

• Leaving it too late. Registering after your first payday can mean late-filing penalties from day one.
• Registering too early. HMRC will not accept an application more than two months before you pay anyone.
• Forgetting the director. A single-director company that pays a salary still needs PAYE. Being your only employee does not exempt you.
• Assuming you can claim the Employment Allowance. A company whose only paid employee is the sole director cannot claim it, so budget for the full 15% employer NI.
• Ignoring pensions. PAYE registration and auto-enrolment are separate duties, and both can apply.

Sources

• Register as an employer, GOV.UK
• Rates and thresholds for employers 2026 to 2027, GOV.UK
• PAYE and payroll for employers, GOV.UK
• Running payroll: paying HMRC, GOV.UK
• Employment Allowance, GOV.UK

Want it done for you? Book a free call with a Zmartly accountant and we will register your PAYE scheme, run your payroll and keep you the right side of every HMRC deadline. Talk to a Zmartly accountant.

Frequently asked questions

When must I register for PAYE as an employer?

You must register before your first payday once you pay anyone at or above the secondary threshold of £96 a week (£5,000 a year) for 2026/27, or if the worker has another job or pension, receives benefits, or gets statutory pay. You cannot register more than two months before your first payday.

Do I need PAYE if I only pay a director's salary below the threshold?

Often yes. Even below the secondary threshold, you generally register if you want to record National Insurance towards a State Pension qualifying year, claim statutory payments, or provide benefits. Many directors set a salary at or just above the Lower Earnings Limit of £129 a week and run a PAYE scheme so the year still counts.

How long does it take HMRC to issue an employer PAYE reference?

HMRC can take up to 15 working days to post your employer PAYE reference and Accounts Office reference, and longer at busy times or for overseas businesses. Because you cannot register more than two months ahead, aim to apply four to six weeks before your first payday.

Is there a fee to register for PAYE?

No. Registering as an employer with HMRC is free. The costs come afterwards from payroll software (often free for smaller employers), your time or an accountant's fee, and the employer National Insurance and pension contributions you pay on top of wages.

What happens if I register for PAYE after my first payday?

You still owe the income tax and National Insurance due from that first payment, and HMRC can charge penalties and interest on PAYE reported or paid late. Register straight away, bring your payments up to date, then keep to the monthly deadlines to stop further penalties building up.

Can I register for PAYE more than two months before I start paying staff?

No. HMRC will not accept a registration more than two months before your first payday. Because the reference can take up to 15 working days to arrive, the safe window is roughly four to six weeks before you plan to pay anyone.