PAYE is how employers collect Income Tax and National Insurance from pay on behalf of HMRC. Most companies paying a salary — including to a sole director — need to register as an employer.

1. Check Whether You Need to Register

This generally applies once you pay any employee (including a director) above the relevant threshold, or provide certain benefits.

2. Register With HMRC

Ideally register before your first planned payday, since processing can take time.

3. Set Up Payroll and Report in Real Time

Payroll software reports pay and deductions to HMRC on or before each payday, under Real Time Information (RTI).

This guide provides general information only. Even a single-director company generally needs to register and run PAYE correctly.