Payroll calculates how much to pay your employees. It then submits your information to HMRC.

When you start employing staff, you need to register as an employer with HMRC (opens in new tab).  Next, set up an account with HMRC’s online services.

Once you’ve set up your account, you can sign up for PAYE for Employers. You get your PAYE and Accounts Office references, and an activation code. Requesting a username and password from HMRC can take up to seven days and you must activate it within 28 days.

When you first log into payroll, you have options to set up your company and payroll information.

Choose one of the following options: 

Migrate payroll data

Select if you’re transferring from another system part-way through the current tax year.

• Use the Migrate payroll data option

Import Employees

If you've used another payroll system and would like to import an FPS file. This creates your employee records.

• Use the Import Employees option

New Company

If transferring your existing company at the beginning of a tax year, or haven’t yet paid your employees.

• Use the New Company option 

HMRC PAYE Details

Payroll expects your PAYE Reference and Accounts Office Reference as a first step. You can't enter employee details otherwise.

Until you get your genuine details from HMRC, you can use the following dummy details:

1. Select the Settings tab, then Payroll Settings.
   • PAYE Reference: 168 A168
   • Accounts Office Ref: 168PA1234567X
   • HMRC Reporting Frequency: Monthly 
   • HMRC Payment Method: Cheque
2. Select Save.
3. Complete your Payroll Settings.

 CAUTION: You must replace these details with genuine HMRC details. Do this before running your first payroll. 

Once you’ve completed the steps, you’re ready to Process your first pay run.