How to Register for PAYE as an Employer
HMRC's Real Time Information system tracked 30.2 million payrolled employees across the UK in April 2026 [1]. Every employer behind those payrolls began by registering a PAYE scheme, the formal arrangement that authorises a business to deduct income tax and National Insurance contributions from employee wages and remit them to HMRC [2].
PAYE registration is a legal requirement once a business starts paying anyone at or above the Lower Earnings Limit of £129 per week in the 2026-27 tax year [3]. Failing to register on time can result in a penalty of up to £3,000 per tax year under the Taxes Management Act 1970. Registering promptly unlocks the reference numbers needed to file the first Full Payment Submission and operate a compliant payroll from the very first payday.
This guide covers who must register, when to do it, what information HMRC requires, and what happens after the registration is submitted.
Key takeaways
- Any employer paying a worker £129 or more per week must register a PAYE scheme before the first payday.
- Registration must happen no more than two months before the first payday and must precede the first wage payment.
- HMRC issues two distinct reference numbers: an Employer PAYE Reference and an Accounts Office Reference.
- Online registration typically takes up to 15 working days for HMRC to send the confirmation letter.
- Employers with nine or fewer employees may use HMRC's free Basic PAYE Tools; all others require HMRC-recognised payroll software.
Who needs to register for PAYE
An employer must register with HMRC as soon as the business hires someone and expects to pay them at or above £129 per week, the Lower Earnings Limit for the 2026-27 tax year [3]. This threshold applies equally to company directors paying themselves a salary through their own limited company. A sole director receiving £96 per week or more through the payroll is legally required to open a PAYE scheme and report that payment through Real Time Information [2].
The trigger for registration is gross pay level, not the amount of tax or National Insurance that will actually be deducted. A director on £12,570 a year, positioned exactly at the Primary Threshold, still needs a registered scheme because HMRC requires the employer to report the payment via RTI and to maintain NI contribution records by scheme reference [4].
When registration is not required
An employer does not need to register for PAYE if every worker engaged is paid below £129 per week, has no other employment, and receives no expenses or pension from the business [2]. In practice, this exception covers very few businesses. Most companies, including those with a single part-time employee, exceed the Lower Earnings Limit within their first payrun.
When to register
The window for registration is clearly defined: no more than two months before the first payday, and before the first wage payment is made [2]. HMRC sends the confirmation letter by post, which can take up to 15 working days to arrive [5]. An employer who registers in the week before the first payday risks not having the reference numbers in time to file the mandatory Full Payment Submission.
The practical approach is to register at least four weeks before the planned first payday. If the confirmation letter has not arrived by payday, the employer can still pay the employee, but must hold the FPS until the references arrive. Once received, all outstanding FPS submissions should be filed immediately with the relevant late-submission reason code [6].
What information HMRC requires
The online registration at gov.uk/register-employer asks for the following before the application can be submitted [2].
| Information required | Notes |
|---|---|
| Government Gateway user ID and password | A new ID can be created during the registration process |
| Legal business name and address | Must match the registered trading name |
| Date the business started or expects to start paying employees | Sets the scheme start date in HMRC records |
| Date of the first payday | Used by HMRC to determine when the first FPS is due |
| Nature of the business | Used for risk classification |
| Contact name and telephone number | |
| Business UTR or company registration number | Not always mandatory at registration stage |
The form takes around 15 to 20 minutes to complete and carries no fee [2]. Once submitted, HMRC processes the application and sends confirmation by post.
The two reference numbers HMRC issues
Once HMRC confirms the registration, it issues two reference numbers in the same letter. Both must be entered into payroll software before the first FPS is filed. A full explanation of what these references mean and how the scheme operates is in the guide to what a PAYE scheme is.
Employer PAYE Reference
The Employer PAYE Reference identifies the employer inside HMRC's system. It takes the format of a three-digit tax office code, a forward slash, and a tax office employer reference, for example `123/AB456` [7]. This reference appears on every FPS filed to HMRC, on all HMRC correspondence about the scheme, and on the P60 certificates issued to employees at the end of each tax year [7].
Accounts Office Reference
The Accounts Office Reference is used solely to allocate PAYE payments to the correct employer account. It is always 13 characters long: three digits, the letters PA, and eight further digits, for example `123PA00012345` [7]. This reference must appear on every PAYE payment made to HMRC [8]. Without it, payments may not be allocated correctly and the employer's HMRC account will show an outstanding balance.
| Reference | Format example | Used for |
|---|---|---|
| Employer PAYE Reference (ERN) | 123/AB456 | FPS filings, HMRC correspondence, employee P60s |
| Accounts Office Reference | 123PA00012345 | Allocating PAYE payments to the correct employer account |
What to do after registration
Once the reference numbers are in hand, three immediate steps put the employer on a compliant footing.
Set up payroll software
Employers with nine or fewer employees may use HMRC's free Basic PAYE Tools [2]. Larger employers must use HMRC-recognised UK payroll software capable of calculating income tax, National Insurance, student loan deductions and statutory pay, then transmitting the FPS on or before each payday [6]. HMRC recognition confirms that the software applies the correct 2026-27 rates and produces RTI submissions in the format HMRC's systems accept.
Collect a P45 or Starter Checklist from each employee
Before the first payrun, the employer collects either a P45 from the employee's previous employer or a completed HMRC Starter Checklist [9]. These documents supply the tax code and indicate whether the employer should apply cumulative or Week 1/Month 1 basis. Using the wrong basis from the outset leads to under- or over-deductions that HMRC's RTI matching will identify promptly [6].
Assess auto-enrolment obligations
Opening a PAYE scheme brings the employer within the Pensions Regulator's automatic enrolment framework from the outset [10]. Any employee aged between 22 and the State Pension age earning above £10,000 a year must be enrolled into a qualifying workplace pension without being asked to opt in. The employer must write to every eligible employee confirming enrolment and declare compliance to the Pensions Regulator within five months of the staging date. Modern HMRC-recognised payroll API software assesses auto-enrolment eligibility automatically at each payrun, removing the risk of a missed enrolment.
Running the first payroll
With the scheme open and the software configured, the employer runs the first payroll, calculates deductions, produces payslips and files the FPS. In the 2026-27 tax year, employer National Insurance applies at 15% on earnings above the Secondary Threshold of £5,000 per year [3]. Employee income tax is deducted at the rates applicable to the employee's home nation: up to 20% basic rate in England and Northern Ireland, or up to 48% top rate in Scotland [11].
The first FPS must include each employee's full identifying information: name, date of birth, National Insurance number and the starter declaration from the Starter Checklist [9]. Subsequent FPS submissions only need to report identifiers when they change. The first PAYE payment to HMRC falls due by the 22nd of the month following the first payrun [8]. For directors of one-person companies, the payroll for sole traders overview covers how a single-director structure interacts with the same PAYE obligations.
For accountants and payroll bureaux managing multiple employer schemes, each scheme carries its own reference numbers, its own FPS schedule and its own HMRC payment deadline. Bureau platforms built on an API-first payroll engine handle all schemes from a single dashboard without cross-contaminating reference numbers or scheme balances.
Conclusion
PAYE registration is the foundation of every compliant UK employment relationship. The process is simple: one online form, up to 15 working days for confirmation, and two reference numbers that sit at the centre of every subsequent payrun. The discipline it creates, filing on or before payday, paying by the 22nd, maintaining accurate employee records, runs uninterrupted for as long as the business employs anyone.
For any employer taking on a first employee, starting the registration at least four weeks before the intended first payday removes the risk of receiving the reference numbers after the FPS is already overdue. Late registration and late filing carry penalties that accumulate quickly, and HMRC's Real Time Information infrastructure gives the department near-immediate visibility of any gap between when a payment was made and when it was reported.
Frequently asked questions
How long does PAYE registration take with HMRC?
Online registration at gov.uk/register-employer can take up to 15 working days for HMRC to confirm and post the reference numbers [2]. Employers should allow at least four weeks between submitting the registration and the planned first payday to ensure the Employer PAYE Reference and Accounts Office Reference arrive in time to file the first Full Payment Submission on or before payday. If the reference numbers have not arrived by the first payday, the employer should pay the employee normally and file the overdue FPS as soon as the references are received.
Does a sole director of a limited company need to register for PAYE?
Yes, if the director pays themselves a salary at or above the Lower Earnings Limit of £129 per week through the company [3]. Many directors take a salary pitched at the Secondary Threshold of £5,000 per year or the Primary Threshold of £12,570 per year. Both levels require a registered PAYE scheme for RTI reporting purposes, even if no income tax or National Insurance is deducted at those earnings levels [4].
What is the difference between the Employer PAYE Reference and the Accounts Office Reference?
The Employer PAYE Reference (format: 123/AB456) identifies the employer in HMRC's records and appears on every FPS submission, on HMRC correspondence and on employee P60 certificates [7]. The Accounts Office Reference (format: 123PA00012345) is used exclusively when making PAYE payments to HMRC, ensuring each payment reaches the correct employer account [8]. Both references arrive in the same HMRC confirmation letter and both are required before payroll can begin.
What happens if an employer forgets to register for PAYE before the first payday?
An employer that operates payroll without a registered PAYE scheme risks a penalty of up to £3,000 per tax year. Once the oversight is identified, the employer should register immediately at gov.uk/register-employer [2]. Once the reference numbers arrive, all outstanding FPS returns should be filed promptly with the appropriate late-submission reason code. HMRC expects prompt correction, and voluntary disclosure of a registration delay is treated more favourably than non-compliance identified through audit.
