Getting the right-to-work check wrong can be a costly mistake: employing someone without a valid check can mean a civil penalty of up to £45,000 per illegal worker for a first breach, and up to £60,000 for a repeat. There is no grace period, either. The check has to be completed before the first day of work, and a correct check gives the employer a "statutory excuse" that protects the employer if the worker later turns out not to have permission. A common version of the mistake is post-Brexit: accepting an EU national's passport on its own, which no longer proves the right to work. UK onboarding is otherwise fairly light on bureaucracy, but a few steps have hard timing, so here is the order that keeps an employer out of trouble.
Before the first payday: register with HMRC, insure, set up a pension
Three things need to exist before the first payday.
The employer has to register with HMRC as an employer and get a PAYE reference. This can take up to 15 working days, and payroll cannot be filed without the PAYE reference, so this registration is the item to start early. Registration should happen before the first payday and no more than two months ahead.
The employer needs employers' liability insurance, which is legally required with a minimum of £5 million of cover; operating without it means a fine of up to £2,500 a day.
And the employer needs a qualifying pension scheme in place for automatic enrolment, because the enrolment duty applies from the employee's first day.
The right-to-work check, and the penalty for skipping it
The right-to-work check must be completed before employment begins. For most people the check is done online, using a share code the worker generates through the Home Office service; for British and Irish citizens it can be a document check. A correctly performed check, completed before the start date, gives the statutory excuse. The employer keeps a copy of the check for the whole employment and for two years after it ends.
If the role needs a visa holder, the employer must hold a sponsor license and assign a Certificate of Sponsorship before the worker applies for the visa. The post-Brexit point is worth repeating, because it is the most frequent error: an EU, EEA, or Swiss national now needs to evidence settled or pre-settled status through the online service, not just a passport. Irish citizens remain exempt under the Common Travel Area.
Collect the new starter's details and set the tax code
Before the first payday the employer collects the worker's personal details, their National Insurance number, and bank details. Then it sets the tax code, the PAYE code that tells payroll how much of the worker's pay is tax-free and therefore how much income tax to deduct. The code comes from one of two places. If the worker hands over a P45 from their previous employer, its tax code and year-to-date figures transfer across. If there is no P45, the worker completes a Starter Checklist, and their answer (statement A, B, or C) sets a temporary code until HMRC issues the right one. An incorrect code is not a disaster, because HMRC corrects it, but it does mean the first payslip or two can be off.
Report the new starter to HMRC on or before the first payday
The UK runs payroll reporting in real time. Every payment is reported to HMRC through a Full Payment Submission (FPS), and for a new hire that submission includes the starter details, so the old P45/P46 paper flow to HMRC is gone. The deadline is strict and worth committing to memory: the FPS must reach HMRC on or before the day the employee is paid. There is a narrow easement that allows filing within a few days in limited cases, but the safe rule is on or before payday. Late FPS filing means monthly penalties that scale with headcount.
Give the written statement of terms on day one
Since April 2020, the written statement of employment particulars is a day-one right, owed to employees and workers alike, on or before their first day. The statement has to cover the essentials: the parties, the start date, pay and hours, holiday entitlement, job title or description, place of work, notice periods, any probationary period and its conditions, and sick-pay terms. The statement is not the same thing as the full employment contract, which is usually broader, but the statement is the piece the law puts on a day-one deadline, so it cannot wait.
Assess and auto-enrol the worker into a pension
The pension duty is one of the easier UK obligations to overlook, and it applies to every new hire. The employer assesses the worker and automatically enrols any "eligible jobholder," meaning someone aged between 22 and State Pension age earning more than £10,000 a year. The minimum contribution is 8 percent of qualifying earnings, of which at least 3 percent comes from the employer, on the band of earnings between £6,240 and £50,270. Workers outside the eligible band can ask to join. Enrolment can be postponed by up to three months, but the worker has to be told within six weeks, and the employer files a declaration of compliance with The Pensions Regulator within five months of its duties start date.
Set the payroll figures: tax code, National Insurance, minimum wage, holiday
A few values complete the payroll setup. The default tax code for 2026/27 is 1257L. The National Insurance category is usually A, with special categories for under-21s and young apprentices. The National Living Wage for workers aged 21 and over is £12.71 an hour from April 2026, and lower age bands have their own rates. Statutory holiday is 5.6 weeks a year, which is 28 days for someone working a five-day week. Statutory Sick Pay also applies, and from April 2026 it is payable from the first day of sickness rather than after waiting days.
What automation handles, and what still needs a person
UK onboarding does not have Germany's sequence of registrations or Mexico's per-state filings, but it does have two unforgiving deadlines (the right-to-work check before day one and the FPS on or before payday), a pension duty that applies to every eligible hire, and a set of thresholds that change every April. Done by hand, the failures are the quiet kind: a share code nobody checked, an FPS filed a day late, a worker who should have been auto-enrolled and was not. Flux keeps this current. We file the FPS on or before payday, apply the correct PAYE code and National Insurance category, and run the auto-enrolment assessment on each new hire. The National Living Wage and pension thresholds stay up to date automatically, so a new starter is reported on time and their first payslip is right. That leaves the payroll team free for the work that actually helps a new hire, like answering their questions about pay, tax code, and pension, instead of chasing a filing deadline.
Niko Nurmentaus
Product Lead
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