Making the offer and getting set up: what to sort before day one
This is part 3 of Employing people: a small business guide — a plain-English series on taking on staff. See the full guide.
You've been through the interviews, weighed it up, and settled on the person you want. It's a good feeling — and it's tempting to just ring them, say "you've got the job", and sort the details later.
Hold on just a moment, though. Between "you're hired" and their first morning sits a short list of things that need to be in place. None of them is difficult on its own, but several are legal requirements, and a couple carry real penalties if you skip them. The good news is that once you've done this the first time, you've built a routine you'll reuse for every hire after. Let's go through it in the order you'd actually do it.
If you've landed here without seeing the earlier parts, the recruitment guide covers how to choose the right person in the first place.
Start with the offer
The first step is making the offer properly. A phone call to share the good news is lovely, but follow it up in writing with an offer letter. It doesn't need to be a grand document — it sets out the job, the pay, the hours, the start date, and anything the offer depends on.
That last part matters. Most offers are best made conditional — meaning the job depends on a few things checking out, such as satisfactory references and, crucially, proof that the person can legally work in the UK. Making the offer conditional means that if something doesn't stack up, you can withdraw it cleanly rather than being stuck. Keep it warm in tone, but be clear about what's still to be confirmed.
Give them a contract — on or before day one
Every employee has a legal right to a written statement of employment particulars — in plain terms, a written contract setting out their main terms. Since April 2020 this has been a "day-one right", which means it must be given on or before their first day, not weeks later once things settle down.
The main document has to include, from day one:
your business name and the employee's name, and the start date
their pay — how much, how it's worked out, and how often it's paid
their working hours, and whether these can vary
holiday entitlement and holiday pay
their job title or a short description of the role
where they'll be working
notice periods — how much notice each of you must give
any probationary period, and how long it lasts
sick leave and pay, any other paid leave, and any other benefits
any training you require and whether you'll pay for it
A few further details — pension scheme information, any collective agreements, and your disciplinary and grievance procedures — can follow within two months, though many employers simply put everything in one document to keep it tidy.
You don't have to draft all of this from scratch. A sound template, tailored to your business, does the job for most small employers — and getting the contract right from the start heads off a surprising number of the disputes that crop up later.
Check their right to work
Before your new starter does a single hour's work, you must check they're legally allowed to work in the UK, and keep a record of that check. This isn't just for big companies, and it isn't optional — the penalties are steep, up to £45,000 per worker for a first breach and £60,000 for a repeat one.
There are three approved ways to check: a manual check of original documents, the Home Office online checking service, or a certified digital identity provider (used for British and Irish passport holders). Whichever you use, do the check before employment starts, keep a clear copy or record, and — this bit matters — carry it out for everyone you take on, in the same way. Only asking certain people, based on how their name sounds or where you assume they're from, is itself discrimination. Done correctly, the check gives you what's called a "statutory excuse", which protects you if it later turns out the person wasn't entitled to work.
Register for PAYE and set up payroll
To pay someone properly, you'll usually need to run PAYE — the system for deducting Income Tax and National Insurance from wages and passing them to HMRC. That means registering as an employer with HMRC before your new starter's first payday.
Don't leave this to the last minute. Registration can't be backdated, and it takes a little time for HMRC to issue the reference numbers you need, so allow a couple of weeks before the first payment. Once you're set up, you report each employee's pay and deductions to HMRC on or before payday, every time you pay them.
This is the point where many small business owners decide they'd rather not wrestle with payroll themselves — and it's a very reasonable place to hand it to a bookkeeper or payroll service. Whether you run it yourself or pass it on, the key thing is to have the scheme in place before that first payday.
Sort the workplace pension
If your new employee qualifies, you're legally required to put them into a workplace pension and contribute to it — this is called automatic enrolment, and your duties begin on their very first day.
Broadly, you must automatically enrol anyone aged between 22 and State Pension age who earns over £10,000 a year, and pay a minimum contribution — currently a total of 8% of their qualifying earnings, of which at least 3% comes from you. Even taking on a single employee triggers these duties, so it's not something only big employers deal with. Your employee can choose to opt out afterwards, but you still have to enrol them first and can't encourage them to leave. There's also a short bit of admin — a "declaration of compliance" — to complete with The Pensions Regulator once you've done it.
Take out employer's liability insurance
As soon as you become an employer, you're legally required to hold employer's liability insurance, with at least £5 million of cover from an authorised insurer. It covers you if an employee is injured or becomes ill because of the work they do for you. Being caught without it can cost up to £2,500 for every day you're uninsured, so this is one to arrange before day one, not after. Keep the certificate somewhere your staff can see it — displaying it electronically is fine.
While you're at it, it's worth a quick look at whether your other insurances — public liability, and any tools or vehicle cover — still fit now that you've got someone working for you.
What's changing — and why it matters now
The set-up itself is stable, but one part of it is moving. From October 2026, right to work checks are expanding to cover more kinds of working arrangement, including some contractors and gig or platform workers. If you take people on in anything other than a standard employee role, it's worth making sure you know exactly who now needs checking — the direction of travel is towards more checking, not less, and the penalties aren't getting any smaller.
It's also worth remembering the bigger shift we've flagged throughout this series: from January 2027, employees gain protection from unfair dismissal after six months rather than two years. That makes a well-drafted contract and a clear probationary period — both sorted at this stage — more valuable than ever.
Your getting-set-up checklist
Make the offer in writing, and make it conditional on references and right to work.
Prepare the contract (written statement of particulars) ready for day one.
Check their right to work before they start, and keep the record — the same check for everyone.
Register for PAYE with HMRC in good time, and decide who's running payroll.
Set up the workplace pension and assess your new starter for automatic enrolment.
Arrange employer's liability insurance, and display the certificate.
Double-check the pay meets at least the minimum wage for their age.
The bottom line
This stage is really just a checklist — a handful of jobs done once, in the right order, before your new starter walks through the door. Do them properly and you've not only stayed on the right side of the law, you've given your new employee the strong first impression of a business that has its act together. That impression matters more than you'd think, which is exactly where we're headed next: induction — how to welcome someone well and set them up to do their best work from the start.
More in this series
← Part 2 — Recruitment: finding the right person
→ Part 4 — Induction: a good first few weeks
Getting set up is easier with someone in your corner
Getting set up is really just a checklist — a handful of jobs done once, in the right order, before your new starter walks through the door. It's fiddly the first time, but once it's done you've built a routine you'll reuse for every hire after.
At HiThrive, we're business consultants first and foremost — we help owners build better, more resilient businesses, and that includes getting the practical groundwork of employing people right so nothing important gets missed. We'll think it through for your situation and point you towards specialist HR or legal advice when that's what's needed. And if you'd rather hand the payroll and pension side over entirely, that's something we can run for you.
If you'd like help putting the pieces in place, or just a plain-English chat about what's involved, we'd love to help. Get in touch and let's talk it through.
Summary: getting a new employee set up
What do I need to do before a new employee starts?
Make the offer in writing (conditional on references and right to work), prepare a written contract for day one, check their right to work, register for PAYE with HMRC, set up a workplace pension, and take out employer's liability insurance — all before their first day.
Do I have to give an employee a written contract?
Yes. Every employee has a legal right to a written statement of their main terms, and since April 2020 it must be given on or before their first day.
Can I let someone start before I've checked their right to work?
No. The check must be done before they begin working, and it protects you from penalties that reach £60,000 per worker. Carry it out the same way for everyone you hire.
When do I need to register for PAYE?
Before your new employee's first payday. It can't be backdated and takes a little time to process, so allow around two weeks.
Do I really need a pension for one employee?
If they qualify for automatic enrolment — broadly, aged 22 to State Pension age and earning over £10,000 a year — then yes. Even a single employee triggers the duty, and it starts on their first day.
What insurance do I legally need?
Employer's liability insurance, with at least £5 million of cover, as soon as you employ anyone. Being uninsured can cost up to £2,500 for every day without it.
