Skip to main content
Updated on 6 April 2024

Taking on a new employee

When you take on a new employee, you will need to gather some information from them including their National Insurance number and tax code per their P45 or Starter Checklist and record it somewhere safe. You will also need to decide how often to pay them.

3 rows of wooden blocks with a person drawn on them, in the first row there is 3 blocks, the second row has 2, the third row has 3, arrows are pointing to the space on the 2nd row where a block is missing with the words 'NOW HIRING'
ilikeyellow /

Content on this page:

Setting up an employee record

Employers typically keep a number of different employee records in a personnel file. This might be either a physical or an electronic file. Such a file may contain documents that fall into one of the following categories:

  • Hiring documents
  • Job performance and development
  • Payroll
  • Termination and post-employment information

We look at the type of documents that you may want to keep in your personnel file (and associated data protection considerations) in more detail on our record keeping page. On that page, we also look at the information about your employee that you must keep by law for a certain amount of time – for example specific payroll records for HMRC.

Gathering initial information

When your employee starts, you will need to gather some basic information from them which will include their:

  • forename(s) and surname
  • date of birth
  • address
  • gender
  • National Insurance number (NINO)
  • tax code

We look at National insurance numbers on our National insurance: information for employers page including what to do if your employee hasn’t got one.

Collecting employee information

A lot of basic information that you need will be on the P45 that your employee should bring with them from their previous job. This is a form that is given to an employee when they leave a job.

Your employee may not have a P45. This might be for various reasons, including for example because they:

  • have lost it,
  • were not employed immediately before starting with you, or
  • have not yet received it from their previous employer.

If they do not have a P45, you will have to collect the information you need separately (usually by asking them to fill in a Starter Checklist) and ask them about their employment situation before they joined you. For example, this may be their first job since leaving school, or they may have another job which they plan on keeping at the same time as working for you.

We explain more about this on our PAYE starter procedure page.

Payroll numbers or identifiers

If you have more than one employee, it may be useful for your records to use some kind of numbering system – your first employee could be “1” and a second one “2” and so on. This may help to assist with identifying your employee.

Often there will be a field for a ‘Payroll ID’ in your payroll software. If you are a paper filer, form RT2 also contains a field for such information.

Where used, your employee's payroll ID should appear on any ‘HMRC output’ –tax coding notices, student loan start and stop notices SL1 and SL2s, etc.

While it is not essential that you assign a payroll ID for your employee and/or complete such a field, where you do, the ID must be unique. This means you must always use a different payroll ID each time you employ someone, otherwise you could create a duplicate record within HMRC’s systems. Even if you take on someone who has previously worked for you, you should give them a new payroll ID.

Choosing a pay period

There are no hard and fast rules on choosing a pay period. Employers can essentially choose which pay period is most suitable for them.

Monthly and weekly pay periods are the two main options. We talk about each of these and associated considerations below.


If you are an online filer, a monthly pay period means that you only have to run payroll and submit information to HMRC once per month. It is a simple system which helps everybody involved avoid problems with things like ‘week 53’ payments (explained further below under the heading, ‘Week 53 payments’).

However, being paid monthly could sometimes put a financial strain on employees, as they only get paid once per month (and this will often be on the last working day of the month). As a result, some might find it difficult to manage their income and expenses over the longer period. Some employers allow employees to take an advance on their wages to help with short term cash flow problems.

Universal Credit (UC) is based on a monthly assessment period so if your employee is paid monthly, then per this GOV.UK guidance on pay periods and UC, this is typically the best fit as their monthly net payments should fall into each UC assessment period.


Some employees prefer getting paid weekly because it can help them to manage their cash flow needs. It is quite usual to find hourly workers paid weekly – usually on a Friday.

On the other hand, as you will probably have to submit information to HMRC every time you pay your employee if you are an online filer, paying people weekly could mean you spend a lot of time on payroll administration. You might think this means there are more chances to make an error as you will need to make 52 regular submissions, which is significantly more than 12!

Sometimes weekly paid staff are asked to work a ‘week in hand’ – this isn’t about being paid cash in hand, but instead means a worker receives their week’s wage the week after it was earned. For example, if a worker begins a week’s work on 15 April 2024 (working Monday to Friday) and is paid weekly, they would get paid for that work on Friday 26 April 2024 not Friday 19 April. This system helps give employers some security (for example, it makes it less likely that an employee won’t just leave the job without giving notice etc). But it can be confusing and may create financial pressure for employees, particularly when they first start the employment and have no pay at the end of the first week. Some employers allow employees to take an advance on their wages to help with short term cash flow problems. If you decide to use this system then when your employee leaves, you must remember to give them the week in hand in their final pay.

Week 53 payments

If you pay your employees weekly (or fortnightly, or every 4 weeks), the way dates fall mean that sometimes you will end up making one more payment than usual to your employees towards the end of the tax year.

If you pay your employees weekly, this would be a 53rd weekly payment – GOV.UK lists the numbers to put in your payroll software for the different pay periods affected, but they generally are known as ‘week 53 payments’.

If you use payroll software, such as HMRC’s Basic PAYE Tools, week 53 payments are handled automatically. Otherwise, guidance is available in the CWG2 Employer Further Guide to PAYE and NICs, under ‘week 53 payments’.

On these ‘week 53’ type occasions, HMRC allow employers to give the employee an extra amount of personal allowance (the amount a person can earn before they start to pay tax) so that the employee’s take home pay is not adversely affected. But this means that over the tax year, the employee receives more tax-free pay than the standard personal allowance for the year. Once the tax year ends, HMRC may take steps to recover the tax underpaid as a result of the extra personal allowance given to the employee, by sending them a P800 calculation. The resulting underpayment of tax is then collected through an adjustment in the tax code allowing the underpayment to be paid in smaller, more manageable instalments across the tax year.

When this happens employees often complain to HMRC and the employer is accused of failing to operate PAYE correctly even though they have deducted tax in accordance with the PAYE regulations.

HMRC are aware of this long-standing problem. If you expect that you will be making an extra ‘week 53’ type payment in the tax year, it may be helpful if you explain the situation to your employees.

Back to top