Set yourself up as an employer

Operating the payroll manually

You may find it practical to organise the payroll yourself, particularly if you're starting with a single employee.

What you need
Everything you need to run your payroll manually is in the New Employer's Starter Pack including:

• details of PAYE and National Insurance (NI) rates, and help books explaining how to use them
• tables to simplify the process of working out PAYE and NI deductions
• form P11 - the deductions working sheet - which you can use to record details of employees and deductions

See the page in this guide on the New Employer's Starter Pack. You don't have to use the P11 to record deductions - you can create your own form if you prefer. Whatever records you keep, however, must include the details shown on the P11.

Setting up your employee's payroll record

View a specimen of form P11 from the HM Revenue & Customs website (PDF)

If you decide to keep manual records, you can enter your new employee's details on form P11 (or your own equivalent) as soon as you've dealt with their P45 or P46. If you haven't done this yet, go through the initial steps in taking on a new employee before you set up the payroll record. See the page in this guide on the first steps in taking on a new employee.

Call the HM Revenue & Customs New Employers Helpline on Tel 0845 60 70 143 if you need help with completing the P11.

Preparing for payday
As payday approaches, you'll have to think about calculating deductions and producing pay statements. See the page in this guide on arranging payment for your new employee.

Subjects covered in this guide

• Introduction
• Who counts as an "employee"?
• First steps in taking on a new employee
• The New Employer's Starter Pack
• Dealing with a new employee's P45
• What if my new employee doesn't have a P45?
• When a new employee doesn't have or know their NI number
• Choosing a payroll system
• Operating the payroll manually
• Using payroll software
• Arranging payment for your new employee
• Paying your employee for the first time

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