First-Time Employer Payroll Setup in Horsham: PAYE, RTI, and Auto-Enrolment

Avoid Payroll Panic: How One Small Business Ran Its First Payroll

Hiring your first employee is a big step. It feels exciting, but payroll can make it feel a bit scary. There are new rules, new systems, and new deadlines to think about, all before that first payday arrives.

To show what this looks like in real life, here is how one new employer in Horsham handled their very first payroll month, from registering for PAYE to sorting workplace pensions. We work with many new employers locally and across the UK who start with the same thought: “I have offered someone a job, what now?” This real example turns that question into a simple, clear plan you can follow with confidence.

Registering as an Employer and Setting up PAYE

Our client, a small design studio in Horsham, had just offered a full-time role to a junior designer. They knew they needed to “do payroll” but were not sure where to start. We walked them through the steps.

First, they had to register as an employer with HMRC because they were paying an employee through payroll. The director would also start taking a small salary, so this needed to be set up properly before the first payday.

Here is how the PAYE registration played out in practice:

• They logged in to their existing Government Gateway account (which they were already using for VAT).
• They applied to register as an employer, entering basic business details and the expected first payday.
• They chose a PAYE scheme start date that matched the date they planned to pay the new employee.
• About a week later, HMRC issued their PAYE reference and Accounts Office reference by post.

They nearly made a common mistake at this point. When it came time to set up payments to HMRC, they were not sure which reference to use in their bank details. We clarified the difference between the PAYE reference and the Accounts Office reference and helped them save both in a secure, shared payroll folder so they would not get mixed up.

Next, they needed to decide how payroll would run month-to-month. Initially, they thought about using a basic spreadsheet and the HMRC calculator. Once they saw the ongoing work involved, they chose a mixed approach instead:

• We set up their payroll software, taking care of calculations and RTI submissions.
• They kept responsibility for updating hours, salary changes and approving final figures each month.

This took pressure off the director, who wanted to stay involved without learning every technical detail.

Collecting Employee Details and Setting up Pay

Before the first payday, we helped the studio collect the right information from their new employee. In reality, this looked like a short checklist they worked through in the first week.

They collected:

• Full name, address, date of birth and National Insurance number
• A completed starter checklist (the employee did not have a recent P45)
• Right to work documents (a valid UK passport)
• Bank details for salary payments
• Confirmation that the employee did not yet have a student loan

The next question was how to structure pay. The owner originally wanted to keep things as simple as “a fixed monthly salary”. When we talked through real-life scenarios, overtime on a big project, a future performance bonus, and holiday, they realised they needed to define pay elements clearly from the start.

Together, we agreed:

• A basic annual salary, paid monthly.
• A separate overtime rate to be used only when pre-approved.
• A simple holiday system where days were booked via a shared calendar and recorded in payroll notes.

We also set out how they would handle statutory sick pay if needed, so they would not have to scramble for information the first time someone called in sick.

Handling Deductions in Practice

When we ran the first payroll calculation, the director saw, for the first time, how gross pay turned into net pay. This helped them understand deductions properly rather than guessing.

For this employee, deductions included:

• Income Tax
• National Insurance contributions

There were no student loan repayments or court orders, but we still built in a process for checking HMRC notices each month so nothing would be missed in future.

The studio also had questions about reimbursing travel to and from a client site and whether paying for a staff lunch could affect tax. We talked through their specific plans:

• We set clear rules that genuine business mileage and certain expenses would be reimbursed at approved rates.
• We explained how regular, generous staff entertainment can become a taxable benefit, so they decided to keep occasional team lunches modest and well documented.

This real-life discussion meant they understood the difference between a simple reimbursement and a benefit in kind, and they knew when to ask for advice before changing anything.

First RTI Submissions: Getting the Timing Right

When the first payday came around, the studio owner was surprised by how structured the process felt compared to their expectations.

Here is what their first pay run looked like in real time:

• A few days before payday, the owner confirmed the salary, checked there was no overtime and approved the figures.
• We ran the payroll in the software and generated payslips.
• The owner reviewed the payslip, noticed a minor spelling error in the employee’s address and had it corrected before final approval.
• Once everything was confirmed, we submitted the Full Payment Submission (FPS) to HMRC on the morning of payday.

They almost made a classic new-employer mistake here: they initially thought of using the date they ran the payroll as the payment date, even though the salary would actually leave their bank account two days later. We explained why the payment date on the FPS needs to reflect when staff are actually paid. After that, they added the true payday date to their calendar to avoid confusion.

For that first month, there was no need for an Employer Payment Summary (EPS), but we showed them what it would be used for in future (for example, if they ever had to claim statutory payments or report that no employees were paid in a period).

Workplace Pensions: From Duties Start Date to First Contributions

Workplace pension rules were the part that worried the director most. They had heard of auto-enrolment but were not sure when it applied or what to do.

We started by confirming their duties start date, the date their first employee began work. From that point, they had legal responsibilities.

Together, we worked through the steps:

• Choosing a pension provider that integrated smoothly with their payroll software.
• Setting contribution levels that met the legal minimums but also fitted their budget.
• Linking the payroll system and pension scheme so that each pay run would automatically assess the employee and calculate contributions.

In this real case, the employee was eligible for auto-enrolment based on age and earnings. That triggered several actions:

• Automatic enrolment into the chosen scheme.
• A statutory enrolment letter explaining the pension and the employee’s rights.
• First contributions being calculated and scheduled for collection.

There was a small timing scare: the owner nearly sent the enrolment letter late because they assumed the pension provider would handle all communications. We clarified that certain letters are the employer’s responsibility, and we provided a compliant template they could adapt.

By the end of the first month, contributions had been uploaded and accepted by the pension provider, and the owner understood what records to keep in case the Pensions Regulator ever asked for evidence.

End-of-Month Review: Lessons From the First Payroll

After their first payroll month, we sat down with the studio owner for a quick review. It took less than half an hour but gave them a lot of confidence.

We walked through a simple checklist based on their real figures:

• Confirming that gross pay matched the employment contract and agreed hours.
• Checking that net pay figures matched the amount sent from the bank.
• Verifying that the FPS had been accepted by HMRC, with no error messages.
• Comparing the PAYE and National Insurance liability in the payroll reports with HMRC’s online account.
• Ensuring the pension contributions appeared correctly in the pension portal and had been collected.
• Confirming that right to work documents, starter details and payroll reports were stored securely.

A couple of small issues surfaced:

• The employee’s National Insurance number was missing a space, which did not cause an error but was corrected for neatness.
• The owner had set up a reminder for the PAYE payment on the wrong date. We changed it to line up with HMRC’s deadline and their own cash flow.

These minor adjustments meant that when they hired a second part-time staff member three months later, they already had a working process to plug that person into.

What This Means for Your First Employee

This Horsham studio’s experience is similar to many new employers we support:

• Payroll feels daunting at first, but a clear sequence of steps makes it manageable.
• Real-life questions about expenses, benefits and pensions arise quickly once the first employee is in place.
• Early checks and good records in month one prevent problems with HMRC, pension providers and staff pay later on.

If you are about to hire your first employee, using a real example like this as a guide can help you:

• Register with HMRC in good time.
• Collect the right information from your employee.
• Run RTI submissions correctly from the very first payday.
• Meet your auto-enrolment duties without last-minute stress.

With the right setup and a little support, your first payroll month can run smoothly, setting a solid foundation as your team grows.

Streamline Your Payroll And Free Up Time To Focus On Your Business

If managing payroll is eating into the hours you should be spending on your clients and team, let us take it off your hands. Our expert payroll services in Horsham are designed to keep you compliant, accurate and on time each month. At NFH Accountancy, we tailor our support to the way you work, so your processes stay simple and hassle free. Ready to talk through what you need? Just contact us and we will walk you through the next steps.