If you've reached the point where you need to hire someone for the first time, congratulations, it usually means the business has grown beyond what you can manage alone. It also means a genuine step change in responsibility: you're no longer just running a business, you're an employer, with legal obligations attached to that word whether you hire one person or ten.
This guide covers what you actually need to do, in order, with real figures rather than vague reassurance. It won't tell you how to write the advert itself or where to post it, we cover those separately, linked below. This is about getting the legal and practical groundwork right first, so that by the time you're ready to advertise the role, the boring but essential parts are already sorted.
Before you hire: the decisions that shape everything else
A few decisions early on save considerable admin later.
Employee or self-employed contractor? This isn't a matter of preference. HMRC and employment tribunals look at the actual working relationship, not what the contract calls it. If you control when, where and how someone works, provide their equipment, and they can't send a substitute in their place, they're very likely an employee or worker, regardless of what you label them. Getting this wrong is one of the more common, and expensive, first-time employer mistakes, since it can mean backdated tax, National Insurance and holiday pay if HMRC or a tribunal later disagrees with your original classification.
Full-time, part-time, or casual? Sussex's economy has a strong seasonal and hospitality element, particularly along the coast, so many first hires genuinely are part-time or variable-hours roles. That's fine, but the contract still needs to reflect the real pattern, not a nominal one.
Fixed-term or permanent? If the need is genuinely temporary, for a specific project or a busy season, say so in the contract. If you're not sure, default to permanent with a probation period rather than repeatedly renewing short fixed terms, which can create its own legal complications.
The legal steps, in the order you'll actually need them
1. Register as an employer with HMRC
You must register before your first payday, but not more than two months before you start paying anyone. Register too early and HMRC won't process it; register late and you risk penalties and a scramble to catch up on payroll submissions. The safe window is roughly two to six weeks before your new hire's first payday. Registration is done online through GOV.UK's employer registration service, and HMRC will post your PAYE reference and Accounts Office reference, allow up to two weeks for this to arrive.
2. Sort out employers' liability insurance
This one is non-negotiable and often overlooked by first-time employers who assume their existing business insurance covers it. It doesn't, automatically. UK law requires a minimum of £5 million employers' liability cover as soon as you have even one employee, from an insurer authorised by the FCA. Trading without it can mean fines of up to £2,500 for every day you're uninsured. It typically costs a genuinely modest amount for a single small-business employee, but it needs to be in place from day one, not arranged retrospectively once someone's already started.
3. Check right to work
By law, you must check that anyone you employ has the right to work in the UK before they start, and keep a copy of the evidence. This applies to every new hire, not just those who look like they might need a visa, checking everyone consistently is also what protects you from a discrimination claim. GOV.UK provides the current list of acceptable documents and an online checking service.
4. Write a contract (and get it right)
Employees are legally entitled to a written statement of employment particulars from day one of their employment, covering pay, hours, holiday entitlement, notice periods and where they'll be working. A verbal agreement and a handshake isn't sufficient, and scrambling to produce a contract after a dispute has already started is a considerably worse position to be in than having one ready in advance.
5. Get pay right, including the current legal minimums
From 1 April 2026, the National Living Wage for workers aged 21 and over is £12.71 an hour, £10.85 for 18 to 20 year olds, and £8.00 for under-18s and most apprentices. These are legal minimums, not benchmarks, you cannot pay below them regardless of what's agreed in a contract. Rates change every April, so it's worth checking GOV.UK directly each year rather than relying on a figure from a previous cycle.
6. Understand your workplace pension duty
Almost every employer has automatic enrolment duties from an employee's first day, even for a single member of staff. For the 2026/27 tax year, you're generally required to automatically enrol staff who are aged between 22 and State Pension age and earning above £10,000 a year (£768 every four weeks). Minimum contributions are calculated on qualifying earnings between £6,240 and £50,270 a year, with a combined employer and employee minimum of 8%, typically at least 3% from you as the employer. There are genuine exemptions and staging details depending on your circumstances, so it's worth checking directly with The Pensions Regulator rather than assuming a blanket rule applies.
What it actually costs to hire your first employee
Beyond the salary itself, first-time employers are often surprised by the additional costs layered on top. As a rough guide, on top of gross pay, budget for:
- Employer National Insurance contributions, a percentage on earnings above a set threshold
- Minimum pension contributions, at least 3% of qualifying earnings once someone is enrolled
- Employers' liability insurance, a modest but mandatory annual cost
- Paid holiday, statutory minimum of 5.6 weeks a year (pro-rated for part-time staff), which is a real cost even though it doesn't appear as a separate line on a payslip
- Any equipment, uniform, or training specific to the role
None of this is meant to discourage hiring, it's simply the honest picture, so that the number you first had in mind for a salary isn't the number you actually need to have available.
A first-time employer checklist
- Confirmed the role is genuinely employment, not self-employment
- Registered as an employer with HMRC (not more than two months before the first payday)
- Arranged employers' liability insurance, minimum £5 million cover
- Have a process to check right to work before the start date
- Prepared a written statement of employment particulars
- Confirmed the role's pay meets the current National Minimum Wage or National Living Wage
- Understood your workplace pension auto-enrolment duty
- Set up a way to run payroll, whether that's software, an accountant, or HMRC's own basic tools
- Worked out the genuine total cost, not just the headline salary
Once the groundwork is done: actually finding the right person
Everything above gets you ready to employ someone legally and properly. It doesn't get you a candidate. That's a separate job, and one that Sussex employers often underestimate, particularly outside Brighton & Hove, where the pool of active jobseekers for any given role can be genuinely smaller than in a big city, and where a candidate in rural West Sussex or a small East Sussex town may be weighing up a longer commute against a role closer to home.
If this is your first hire, it's also worth reading our guide on writing a job advert that actually gets applications, since a poorly worded first advert is a common reason first-time employers struggle to attract anyone suitable at all. If you're taking on the whole process yourself without dedicated HR support, our guide to hiring in Sussex without an HR team covers the practical side of interviewing and deciding, once applications start coming in.
FAQ
Do I need to register as an employer if I'm only hiring one person part-time?
Yes. The obligation to register with HMRC applies regardless of hours or whether it's your only member of staff, including if you're a company director paying yourself a salary.
Can I avoid pension auto-enrolment if I only have one employee?
Not generally. Automatic enrolment duties apply from your first employee, based on their age and earnings, not the size of your business. Certain circumstances create exemptions, so check directly with The Pensions Regulator for your specific situation.
What happens if I pay below the National Living Wage by mistake?
HMRC can require repayment of arrears and can also fine employers who underpay, regardless of intent. If you're unsure which rate applies, check the employee's exact age and status against GOV.UK's current rates before setting pay, rather than after.
Do I need a written contract for a casual or zero-hours worker?
Yes. Workers, not just employees, are still entitled to a written statement of their main terms from day one, even where hours are variable.
How long does it typically take to hire a first employee in Sussex?
This varies significantly by role and location. Roles in Brighton & Hove generally attract a broader pool of applicants than similar vacancies in smaller towns or rural parts of East or West Sussex, where advertising specifically to a local audience tends to matter more for getting relevant applications at all.
Is it cheaper to use an umbrella company or agency instead of employing directly?
It can reduce your administrative burden, but agency and umbrella arrangements come with their own fee structures, and you lose direct control over who represents your business day to day. For an ongoing, permanent role, direct employment is usually more cost-effective over time, even accounting for the setup steps above.