What Payroll Information Do I Need to Give a New Employee

Understanding Payroll Information

Payroll information refers to the data exchanged between you and your employees to ensure pay and tax are calculated and reported correctly. For new hires, it’s the foundation of accurate record keeping and a legal requirement under UK employment law.

As an employer, your responsibility is twofold: gather the right details from your employee, and provide them with clear, accurate information about how they’re paid.

Information You Must Give to a New Employee

When onboarding a new employee, several payroll documents and pieces of information must be shared to comply with HMRC regulations and employment law.

Written Statement of Employment Particulars

Every employee is entitled to a written statement that sets out key terms and conditions of their job. This must be provided on or before their first working day. It should include:

• The rate and frequency of pay

• Hours of work

• Holiday entitlement

• Notice periods

• Job title and responsibilities

This document helps avoid misunderstandings and forms the basis of your employee relationship.

Payslips

Employees must receive a payslip every time they’re paid. This can be electronic or printed but must show:

• Gross pay before deductions

• Deductions such as tax, National Insurance, and pensions

• Net pay (the amount actually received)

• Variable pay items such as overtime, bonuses, or commission

Payslips must be given on or before payday, and they’re a legal entitlement for all employees and workers.

Pension Information

If your business operates a workplace pension scheme, you must tell new employees how auto-enrolment applies to them. Most employees over 22 earning above the threshold will be automatically enrolled. You should provide details about:

• The pension provider and contribution rates

• Opt-out procedures

• How contributions are deducted

This transparency helps staff understand their long-term savings and how much they’re contributing each month.

Tax and National Insurance Information

Accurate tax information is vital to avoid incorrect deductions. Ideally, new employees should provide a P45 from their previous employer, which contains their tax code and pay-to-date figures. If they don’t have one, you’ll need them to complete HMRC’s “Starter Checklist,” which replaces the old P46 form.

This checklist helps determine the right tax code and ensures income tax is correctly calculated from the first payment.

Payroll Frequency and Payment Details

Clearly explain how and when your employees will be paid. Common options include weekly, fortnightly, or monthly pay schedules. Confirm the following:

• Pay date each period

• Method of payment (usually bank transfer)

• Any processing or cut-off dates for changes to timesheets or overtime

Consistency here builds trust and prevents confusion about paydays.

Holiday and Sick Pay Entitlement

Although not part of PAYE submissions, this information is crucial for payroll calculations. Employees must know how much paid holiday they receive and how statutory sick pay works. If your business offers enhanced benefits, make these clear from the outset.

Information You Must Collect from a New Employee

To pay a new employee correctly, you also need to collect certain information from them. Without it, you risk delays, incorrect deductions, or HMRC penalties.

Personal and Bank Details

You’ll need the employee’s full name, address, date of birth, and National Insurance number. You’ll also require their bank account details for payment. Ensure these are kept securely and comply with data protection laws.

Tax Information (P45 or Starter Checklist)

As mentioned, a P45 is the simplest way to transfer payroll data from the employee’s previous job. If unavailable, the Starter Checklist must be completed before their first payday. This ensures the correct tax code is applied and avoids emergency tax deductions.

Student Loan and Postgraduate Loan Details

If your employee has a student or postgraduate loan, HMRC needs to know so the correct repayment deductions can begin. The Starter Checklist asks for this information and should be submitted as part of the new starter process.

Right to Work Documentation

Before adding an employee to your payroll, you must verify their right to work in the UK. Acceptable documents include a British or Irish passport, biometric residence permit, or proof of settled or pre-settled status. Keep a copy of these records as required by law.

How Payroll Setup Works for New Employees

Once you have collected and provided all necessary information, you must add the new employee to your payroll software. Most UK businesses use HMRC-recognised systems that automatically handle tax, National Insurance, and Real Time Information (RTI) submissions.

You must send an FPS (Full Payment Submission) to HMRC on or before each payday. This report includes pay, tax, and National Insurance details for every employee. If a new starter is included in that submission, HMRC automatically updates their records.

Legal and Compliance Considerations

UK payroll law is strict, and non-compliance can result in fines or reputational damage. Employers must:

• Provide written employment particulars by day one

• Issue payslips on or before payday

• Report payroll data to HMRC through RTI

• Enrol eligible staff in a workplace pension

• Keep records for at least three years

Data protection is also vital. Personal and payroll information must be stored securely under the UK GDPR framework. Only authorised staff should have access to sensitive employee data.

Real-World Example

Imagine you hire a new employee in July. They hand over their P45, and you input their details into your payroll software. You confirm their start date, salary, and pension eligibility, and they receive their first payslip at the end of the month. Because you’ve filed your RTI submission on time, HMRC updates their tax record automatically, and everything runs smoothly.

Contrast that with a case where no P45 is provided, and the Starter Checklist is overlooked. The employee may be taxed at an emergency rate, receiving less pay than expected. You’d then need to issue a payroll correction later and resubmit reports to HMRC, which can cause frustration and extra admin.

Common Payroll Mistakes When Onboarding Staff

Many payroll errors arise from incomplete or incorrect starter information. Some of the most common issues include:

• Forgetting to request a P45 or Starter Checklist

• Using the wrong tax code

• Missing RTI submissions

• Incorrectly calculating pension contributions

• Failing to issue payslips or employment particulars

Regular internal checks and up-to-date payroll software can prevent these problems before they occur.

Practical Tips for Employers

To make payroll setup smooth and compliant:

• Collect all employee information before their first day

• Double-check National Insurance numbers and tax codes

• Issue payslips and contracts promptly

• Use HMRC-compliant payroll software

• Keep communication clear with new employees about pay and deductions

Automation can make a big difference too. Many accounting platforms integrate payroll functions with employee records, helping ensure nothing is missed.

Summary

When onboarding a new employee, clear payroll information is essential. You must provide payslips, employment particulars, pension details, and explain how pay and deductions work. At the same time, you must collect personal, tax, and banking information from the employee to set up accurate PAYE reporting.

Getting payroll right from the start builds trust, avoids costly mistakes, and ensures compliance with HMRC rules. It also helps your new staff settle into their role confidently, knowing their pay is handled correctly and transparently.