You register for PAYE with HMRC before your first payday as an employer, and HMRC posts you an employer PAYE reference number. You must register if any employee is paid £96 or more a week, even if the only person you employ is yourself as a company director.
PAYE is HMRC's system for collecting Income Tax and National Insurance from employment. Registering is quick, but the timing catches people out. Here's what GOV.UK says, as of October 2026.
When you must register
GOV.UK says you must register for PAYE if any of the following applies to an employee in the current tax year, which started on 6 April:
- They're paid £96 or more a week.
- They get expenses and company benefits.
- They're getting a pension.
- They've had another job.
- They've received Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit.
You also normally register when you use subcontractors for construction work. If none of these applies, you still have to keep payroll records.
The director catch, and the 2-month window
Two details trip up new limited companies. First, you must register even if you're only employing yourself, for example as the only director. Second, timing: you must register before the first payday to get your reference, but you can't register more than 2 months before you start paying people. So register once you know your first payday, not on the day you incorporate.
How to register, step by step
- Check you need to register using the list above.
- If you're a limited company with 1 to 9 directors, register online. Most limited companies can, and you can continue an application you've already started.
- Other types of business follow a separate route that GOV.UK explains on the same page.
- Wait for HMRC's letter with your employer PAYE reference number. You can check online when to expect it.
- Get a login for PAYE Online and choose payroll software, or a payroll provider.
- Tell HMRC about your employees and send your first report on or before the first payday.
If you have to pay someone before the reference arrives, GOV.UK says to run payroll, store your full payment submission and send it to HMRC late once you can.
The 2026 to 2027 thresholds your payroll uses
| Threshold, from 6 April 2026 | Weekly | Monthly |
|---|---|---|
| Lower earnings limit | £129 | £559 |
| Primary threshold (employee National Insurance starts) | £242 | £1,048 |
| Secondary threshold (employer National Insurance starts) | £96 | £417 |
The standard personal allowance is £12,570 a year and the emergency tax codes are 1257L W1, 1257L M1 and 1257L X. Notice the insight hiding in the table: the £96 registration trigger is the employer National Insurance threshold, which is lower than the point employees start paying. That's why a modest part-time wage can put you in PAYE. Eligible employers can cut their annual employer National Insurance bill with the Employment Allowance, which is £10,500 for 2026 to 2027.
After you've registered
- Report pay and deductions to HMRC on or before each payday.
- Pay HMRC what you owe, usually every month. A small employer expecting to pay less than £1,500 a month can ask to pay quarterly.
- Tell HMRC when someone joins or their circumstances change, such as becoming a director.
- Run the annual reports at the end of the tax year, including expenses and benefits.
You stay legally responsible for every PAYE task even if a bureau or accountant runs payroll for you. My guides to employer's National Insurance, the Employment Allowance and how to do payroll cover the next steps.
What goes through payroll
Payments to employees include salary or wages, tips and bonuses, and statutory sick or maternity pay. From those, you deduct Income Tax and National Insurance for most employees, plus things like student loan repayments or pension contributions. Your payroll software works out the employer's National Insurance due on each employee's earnings above £96 a week, as of October 2026, and you send a separate report to claim back amounts such as statutory pay.
Running payroll yourself or paying someone
| Option | What it means |
|---|---|
| Payroll software | You record employee details, calculate pay and deductions and report to HMRC yourself |
| Payroll provider | A bureau or accountant runs it, but you still collect and keep employee records and stay legally responsible |
| Paper reporting | Only if you're exempt, for example on religious grounds, because you're getting care or support services, or because disability, age or lack of internet access stops you reporting online |
My verdict
PAYE registration is quick online for most limited companies. The trick is timing: no more than 2 months before your first payday, and always before it. If you're a one-director company planning to pay yourself a salary at or above £96 a week, as of October 2026, put registration on your list for the month before.
Want AI doing the heavy lifting in your marketing?
I build the systems that handle the boring 80 percent, so you get your week back. Done properly, with the human kept in.
Frequently asked questions
Do I need to register for PAYE if I'm the only director?
Yes. GOV.UK says you must register even if you're only employing yourself, for example as the only director of a limited company.
How early can I register as an employer?
You can't register more than 2 months before you start paying people, and you must register before the first payday.
When do you need to register for PAYE?
As of October 2026, when any employee is paid £96 or more a week, gets expenses or benefits, gets a pension, has had another job or has received certain benefits.
How do I get my employer PAYE reference number?
HMRC sends it in a letter after you register. You can check online when to expect the letter.
Can a small employer pay PAYE quarterly?
Yes, if you expect to pay HMRC less than £1,500 a month, as of October 2026. Contact HMRC's payment enquiry helpline to arrange it.
Do I need to register for PAYE for a part-time employee?
If they're paid £96 or more a week, or they have another job, a pension, expenses or benefits, then yes. Otherwise you still keep payroll records.
What happens if I pay staff before my PAYE reference arrives?
GOV.UK says to run payroll, store your full payment submission and send a late full payment submission to HMRC once you have your reference.
Is online payroll reporting compulsory?
Yes, unless you're exempt, for example on religious grounds, because you're getting care or support services, or because disability, age or lack of internet access stops you.
