Hiring your first employee is one of the most exciting — and quietly terrifying — things you'll do as a founder. When you decide to hire first employee UK, you're suddenly responsible for payroll, contracts, compliance, and someone's livelihood, usually without an HR team or legal counsel on hand. This checklist exists to make that process concrete, not overwhelming.
Get Your Legal and Employer Obligations Sorted First
Before you post a single job ad, you need to be set up as an employer in the eyes of HMRC. This is non-negotiable and has a hard deadline: you must register before your new hire's first payday.
- Register as an employer with HMRC. You'll get a PAYE reference number, which you need to run payroll. You can do this online via gov.uk.
- Check your employee's right to work in the UK. This is a legal obligation, not a courtesy. You must see and record original documents before they start. A failed check can result in a civil penalty.
- Set up Employers' Liability Insurance. If you have even one employee, this is a legal requirement in most cases. It covers claims from staff who are injured or become ill because of their work.
- Confirm whether you need to auto-enrol them into a workplace pension. Eligibility depends on age and earnings, but you need to know your obligations from day one, not month three.
Getting this foundation right protects you legally and sets a professional tone with your first hire.
Write a Contract That Actually Protects Both Parties
In the UK, employees are entitled to a written statement of employment particulars on or before their first day. This isn't just bureaucracy — a clear contract prevents expensive misunderstandings later.
Your contract should cover:
- Job title, start date, and location (including any remote working arrangements)
- Salary, pay frequency, and how expenses are handled
- Working hours and holiday entitlement (the statutory minimum is 28 days including bank holidays for full-time employees)
- Notice periods on both sides
- Confidentiality and IP ownership — especially important for a startup where your new hire may touch your core product or code
- Probationary period terms, if applicable
Don't copy a free template without reading every line. If your hire is a developer who will be writing code, your IP assignment clause matters enormously.
Write a Job Description That Attracts the Right Person
Early-stage hires wear many hats, but vague job descriptions attract poor-fit candidates. Be honest about the stage you're at, the size of the team, and what "success in six months" actually looks like.
- Lead with the problem you're hiring to solve, not a list of perks
- Be specific about must-have skills versus nice-to-haves
- Include a realistic salary range — hiding it wastes everyone's time and signals a lack of transparency
- State whether the role is remote, hybrid, or in-person, and where the office is
The UK talent market for early-stage roles is active, especially in London, Manchester, Bristol, and Edinburgh. Candidates in these markets see a lot of job posts; specificity makes yours stand out.
Run a Structured Interview Process (Even a Lightweight One)
Informal coffee chats feel fast but lead to gut-feel decisions that often go wrong. Even with one or two rounds, a light structure gives you consistent data across candidates.
- Write down the three or four things you actually need to evaluate (technical ability, communication, comfort with ambiguity, etc.)
- Assign a short, paid task if it's relevant to the role — this respects candidates' time and produces real signal
- Have the same core questions for every candidate so you can compare fairly
This is where many early-stage founders spend too much time on admin — scheduling, tracking candidates, and re-reading CVs in email threads. Penroll is built specifically for this stage: it uses AI to screen applicants and surface the most relevant candidates, so you're spending your limited time on the people who actually fit the role, not wading through every application manually.
Set Up Payroll Before Day One
Running payroll manually through HMRC's Basic PAYE Tools is possible for a tiny team. If you're already using accounting software like Xero or FreeAgent, most have payroll modules built in.
Whatever you use, make sure you're clear on:
- Your payroll run date and how it aligns with your bank
- National Minimum Wage rates — they update annually and vary by age band
- How to handle student loan deductions if applicable
Getting payroll wrong in the first month is a fast way to undermine trust with a new hire.
Onboard Intentionally — the First 30 Days Set the Tone
A great hire can turn into a bad outcome if onboarding is chaotic. You don't need a 100-page handbook, but you do need a plan.
- Send equipment, access credentials, and a first-week schedule before they start
- Set clear 30-day goals so they know what good looks like early
- Schedule regular check-ins — weekly in month one is not too much
- Introduce them to everyone they'll actually work with, even if it's a five-person Slack call
The energy you put into onboarding directly correlates with how quickly your first employee becomes genuinely useful and how likely they are to stay.
First hires shape your culture more than any policy document ever will. Get the fundamentals right and you create a foundation that makes every subsequent hire easier. See Penroll's live demo — no signup.