Setting up payroll for domestic staff.
PAYE registration, employer National Insurance, pensions auto-enrolment, payslips and P60s — a practical starting point for a household hiring its first employee.
A household engaging staff must decide the person's employment status from the real working arrangement. Where the person is an employee, the household normally has the same PAYE, payslip, pension and employment-document duties as another employer. This guide is general information, not tax or legal advice.
Step 1: Register as an employer with HMRC
HMRC says employers must register before the first payday and cannot register more than two months before they start paying people. HMRC then issues the references needed to operate PAYE.
If the first payday arrives before the PAYE reference, HMRC's published route is to run payroll, keep the Full Payment Submission and send it as a late submission after the reference arrives. Check the current HMRC instructions or use a payroll professional.
Step 2: Decide who runs the monthly payroll
You have three options, in roughly increasing order of household effort.
- Payroll bureau. Ask what is included: RTI submissions, payslips, starter and leaver processing, pension files, year-end work and support for corrections.
- HMRC Basic PAYE Tools. HMRC provides free software for employers with fewer than ten employees. Check whether its features suit the household before relying on it.
- Accountant or family office. An existing adviser may run payroll or coordinate a bureau, but the scope and fees should be confirmed in writing.
Step 3: Set up the pension
For 2026/27, The Pensions Regulator publishes an automatic-enrolment earnings trigger of £10,000 a year. Eligible jobholders are generally aged from 22 to State Pension age and working in the UK. Other workers may have a right to opt in or join, so assess each person rather than relying only on the headline trigger.
You need to:
- Choose a qualifying pension scheme that accepts the household as an employer.
- Calculate contributions using the scheme's basis. The statutory minimum is normally 8% in total, including at least 3% from the employer, often calculated on qualifying earnings rather than the whole salary.
- Give the required enrolment information and complete the declaration of compliance. Opt-out and refund rules must be followed without encouraging the worker to leave the scheme.
The Pensions Regulator can use compliance, fixed-penalty and escalating-penalty notices where duties are not met. The household remains legally responsible even when a bureau or adviser performs the administration.
Step 4: Provide a contract and payslip
Employees and workers are generally entitled to the principal written statement of employment particulars from the first day of work, with some wider information permitted later. Refined Staff records agreed placement terms but does not supply legal advice or promise a solicitor-drafted contract.
Employees and workers are generally entitled to an itemised payslip on or before payday. It must show pay before and after deductions, and deductions that may change each pay period; additional information can be required where pay varies by time worked.
What you pay each month
For 2026/27, HMRC publishes a standard employer National Insurance rate of 15% above the £417 monthly secondary threshold. On gross monthly pay of £4,000, that is about £537 of employer National Insurance before considering any reliefs or special category rules. Pension cost depends on the scheme and contribution basis.
| Item | Amount | Direction |
|---|---|---|
| Gross salary | £4,000 | To staff (less deductions) |
| Income tax and employee NI | Payroll calculation | Deducted from gross and paid to HMRC |
| Employee pension | Scheme calculation | Deducted or relieved under the scheme method |
| Net pay | Payroll calculation | Paid to employee |
| Employer National Insurance | About £537 | Household pays in addition |
| Employer pension | Scheme calculation | Household pays in addition |
The exact net pay and employer cost depend on the tax code, National Insurance category, pay frequency, pension basis, benefits, reliefs and the worker's circumstances. Use payroll software or a professional calculation rather than this illustration for payment.
The annual cycle
Two dates matter.
- 31 May: give a P60 to each employee still employed on 5 April.
- 6 July: report relevant expenses and benefits for the previous tax year where P11D reporting is required, and give employees the required information.
If you're hiring a maternity nurse
A maternity nurse may work on an employed or self-employed basis depending on the actual working arrangement. The label in an agreement is not decisive. The household should check employment status and PAYE obligations for the specific engagement and take professional advice where the position is unclear.
Regular hours, control, substitution rights, financial risk and the wider facts of the relationship can all affect employment status. HMRC's Check Employment Status for Tax service can support the assessment, but complex cases may need professional advice.
The Refined Staff way
Refined Staff does not run payroll. The placement handoff records the information agreed for the hire. The household remains responsible for choosing and instructing any payroll bureau, completing PAYE and pension duties, and taking professional advice where needed.
Refined Staff records the placement handoff.
Available vetting evidence is reviewed at the relevant stage. Paloma or Adam handles recruiter decisions and exceptions; the household remains the employer and instructs its own payroll or legal adviser.