Employee Starter Pack Checklist

Step-by-step checklist for hiring your first employee. PAYE, insurance, pension, contract, induction and payroll.

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Employee Starter Pack Checklist

Hiring your first employee is one of the biggest steps you will take as a beauty business owner. There are legal requirements you must meet, and getting them wrong can mean fines. This checklist walks you through everything, step by step.

Before Their First Day

• Register as an employer with HMRC for PAYE - do this at least 2 weeks before their first payday. Register at gov.uk/register-employer.
• Get employer's liability insurance - this is a legal requirement, minimum cover of £5 million. Your existing public liability and professional indemnity policies do not cover employees. Check with your insurer or get a separate policy.
• Choose a workplace pension scheme - you must enrol eligible employees automatically. NEST (nestpensions.org.uk) is free to set up and designed for small employers.
• Complete a right-to-work check - you must see original documents (passport, visa, etc.) before they start. You cannot accept photocopies. Keep a dated copy on file. See gov.uk/check-job-applicant-right-to-work for the full list of acceptable documents (List A or List B).
• DBS check - required if the employee will work with children or vulnerable adults (e.g. in a salon that takes under-16s or care home mobile work). Not required for standard salon roles with adult clients.
• Write an employment contract - you must give every employee a written statement of terms on or before their first day. This must include: job title, start date, pay rate, working hours, holiday entitlement, notice period, pension, and workplace location.
• Set up payroll - either use payroll software (e.g. FreeAgent, Xero, BrightPay) or ask your accountant. You need this to calculate tax, NI, and pension contributions and report them to HMRC.
• Agree working hours, pay rate, and holiday entitlement - statutory minimum is 5.6 weeks (28 days including bank holidays for a full-time worker, pro-rated for part-time).
• Prepare an induction plan - even a simple one-page checklist of what you will cover on day one.
• Order uniform or PPE if applicable - e.g. branded tunic, apron, gloves.

On Their First Day

• Give them their written statement of terms (employment contract). They should have a copy to keep.
• Run through health and safety:
  • COSHH - where Safety Data Sheets are kept, how to handle chemicals safely, where gloves and PPE are stored.
  • Fire exits and fire evacuation procedure.
  • First aid kit location and who is the first aider (if applicable).
  • Accident book location.
• Show them where everything is - products, tools, cleaning supplies, towels, stock room, staff area, bins (including clinical/hazardous waste if applicable).
• Explain your booking, till, and payment systems - show them how to use your booking software, card machine, and any other systems they will need.
• Introduce salon standards:
  • How to greet clients.
  • Timekeeping expectations.
  • Phone and personal device policy.
  • Social media rules (what they can and cannot post about the business, clients, and treatments).
  • Dress code.
• Set up their payroll details - collect their bank account details, National Insurance number, and either their P45 (from a previous employer) or a starter declaration (if they do not have a P45).
• Enrol them in your workplace pension scheme - or explain the postponement period if you are using one (maximum 3 months).
• Give them your employee handbook if you have one - this is not a legal requirement, but it is useful for setting expectations on things like sickness, lateness, and conduct.

Within the First Month

• Submit your first Full Payment Submission (FPS) to HMRC via Real Time Information (RTI) - this must be done on or before each payday. Your payroll software handles this.
• Pay their first wages and issue a payslip - payslips are a legal requirement. They must show gross pay, deductions (tax, NI, pension), and net pay.
• Send the auto-enrolment letter to the employee - this confirms they have been enrolled in the workplace pension, how much is being contributed, and their right to opt out.
• Complete a first probation review - even an informal chat about how they are settling in. Note anything discussed and any areas for development.
• Check National Minimum Wage compliance - rates differ by age. As of April 2025: 21+ = £12.21/hr, 18-20 = £10.00/hr, Under 18 = £7.55/hr, Apprentice = £7.55/hr. Check gov.uk for current rates.

Ongoing Responsibilities

• Run payroll each pay period - calculate pay, tax, NI, pension, and student loan deductions. Submit FPS to HMRC on or before each payday.
• Pay HMRC what you owe - by the 22nd of the following month (electronic payment) or 19th (cheque). This includes PAYE tax, employer and employee NI contributions.
• File an Employer Payment Summary (EPS) - if you are reclaiming statutory payments (e.g. SMP) or have no employees to pay in a tax month. Submit by the 19th of the following month.
• Track holiday taken versus entitlement - and make sure they are actually taking their holiday. You cannot pay them to skip it (except when they leave).
• Renew employer's liability insurance annually - and display the certificate or make it available to employees.
• Re-enrol any staff who previously opted out of the workplace pension - you must do this every 3 years from your staging date. The Pensions Regulator will write to you when it is due.
• Keep employment records up to date - contract changes, pay rises, disciplinary notes, training records.

Key Contact Numbers and Websites

Common Mistakes to Avoid

• Not registering as an employer before they start. You must register with HMRC before their first payday, not after.
• Forgetting employer's liability insurance. This is a legal requirement from day one. Fine for not having it: up to £2,500 per day.
• Treating an employee as self-employed to avoid PAYE. If they work set hours, use your tools, and you tell them what to do, they are almost certainly an employee. HMRC can (and does) investigate this.
• Not giving a written contract on day one. Since April 2020, every employee and worker has the right to a written statement of terms from day one - not after a qualifying period.
• Forgetting workplace pension. Auto-enrolment applies from day one of employment for eligible workers. The Pensions Regulator issues fines for non-compliance.

How to use this template

• Work through this checklist in order. Most steps take between 10 and 30 minutes each.
• Your accountant can handle payroll, PAYE registration, and RTI submissions for a modest monthly fee (typically £30-£80/month depending on your area). This is usually worth it for your first employee.
• Budget 2-4 weeks to get everything set up before your new person starts. Do not leave it until the week before.
• Print this checklist and tick items off as you complete them. Keep it in your employment file for that employee.
• If in doubt about any employment law question, call ACAS on 0300 123 1100 - it is free, confidential, and they deal with exactly these kinds of questions every day.