What you need to know before hiring your first employee
Our checklist guides you through the steps of hiring your first employee. In the beginning you’ll need to ensure your business is registered for employer taxes and you’re up to date with employer and workplace responsibilities. Then once you’ve hired employees, you’ll need to operate a payroll system. We take you through everything you need to know in between deciding you want to employ staff to making your crucial first hire.
As a business owner or a Limited Company, you are considered an employer once you’ve registered for employer’s PAYE tax. There are rules and regulations around being an employer and it’s important that you are aware of your responsibilities before you hire any staff. We have mentioned good resources to expand your knowledge of hiring employees below.
1. Consider what type of employee you need to hire for your Startup
Think about the type of work you would like your employee to do. Does this person need to be qualified and trained or can they receive training on the job? Write a list of requirements for the role and determine the type of person you need to fulfil these duties. You can hire an intern, work experience or work trial placement, full, part-time or casual employee. There are many different options for hiring staff depending on the amount and complexity of work.
2. Register for the correct employers’ taxes
You need to register for employer’s taxes before you employ staff. Both Sole Traders and Limited Companies can be employers and operate payroll to pay your staff. Employers need to register for Pay As You Earn (PAYE) using Revenue’s online eregistration facility or you can outsource tax registration and payroll to a professional. You may need to apply for Relevant Contracts Tax (RCT) if you hire sub-contractors in the construction, forestry or meat-processing industry. If you’re unsure about what taxes you need to pay as an employer, get in touch with our Client Services Team today.
3. Understand employer and workplace rules
Before you decide who you want to employ, you need to understand the legal obligations you have as as an employer. For example, if you consider hiring an intern, work experience or work trial placement, you are still legally required to pay them the national minimum hourly rate of pay (€10.10 as of February 2020). Exceptions to this include hiring family relatives, work experience schemes and registered industrial apprenticeships. The Workplace Relations Commision (WRC) is a great resource for more information on employer obligations in Ireland.
4. Do you need employers liability insurance?
Employers liability insurance is not a legal requirement in Ireland, but as an employer, you are responsible for the health and safety of your employees. When you’re hiring employees, you should consider the risk involved with your work or workplace. This insurance helps you meet the compensation if an employee makes a claim whilst working for you. For example, manufacturing, construction or agriculture industries usually have employers liability insurance because of the risk of injury or workplace accidents.
5. Research how internship programmes can benefit your company
If you’re a bootstrapping Startup, you may not have funds to hire someone or perhaps you need help with administration tasks. As mentioned, it’s illegal to hire unpaid interns or work experience people. However, if you get involved with a student programme, you can source interns through this training programme. Student programmes, such as Intern Plus and ADC College, organise their students from countries outside of Ireland to come here for work experience and to improve their English language. Many higher education institutions also offer Erasmus for students who want to study or undertake a traineeship at a host company. You can take on an Erasmus Intern by creating a company profile on Erasmus Intern’s website.
6. Research grants before hiring employees
JobsPlus Scheme
JobsPlus is available for employers who hire people that have been out of work for a long period of time. This is a government funded scheme that pays the employer in arrears over the period of two years. You will receive a grant of €7,500 or €10,000 over the period of two years. The level of payment depends on the type of person you are employing. Employers need to apply for this scheme before you recruit someone who has been out of work for a long period of time. You can apply for this scheme on the JobsPlus Employer Registration page.
Youth Employment Support Scheme (YESS)
The YESS scheme provides people aged between 18 – 24, three to six months work placement. During this time, those on the work placement will provide training on basic work and social skills by a host company. This scheme is co-funded by the Irish Government, the European Social Fund and the Youth Employement Initative. Employers don’t have to pay those on this type of work placement as the participants receive a weekly payment of €229.20 from the Department of Employment Affairs and Social Protection (DEASP). You can find more information and apply to the YESS scheme on the DEASP website.
Acumen Programme
The Acumen programme supports your company find and fund full and part-time employees to help increase your cross-border export sales, in North or South Ireland. Acumen provides funding of up to £15,000/€18,750 to help you source professional people for cross-border sales roles. They also help you with development and finding new customers. Find out if you’re eligible for this funding on the InterTrade Ireland website.
FUSION Programme
The FUSION programme helps fund a high calibre science, engineering or technology graduate and partners you with a third level institution with specific expertise. This graduate is employed by your company and will be based in your company for 12 – 18 months. Details on funding amounts are also available on the Intertrade Ireland website.
7. Advertise your available positions
When you’re starting up, it may be hard to articulate exactly what you want your first employee to help with. It may be a mixture of roles, skills and responsibilities. For this reason, it’s important to be specific yet open minded. You could consider hiring for potential rather than experience or attitude over qualification. You can do this by promoting your company’s values and the type of value you want your new employee to bring to your company.
Free or free trial job advertising platforms
- Gumtree
- AngelsList
- Indeed
- Glassdoor
- Twitter hashtag #jobfairy
- Advertise on your website
Paid job advertising platforms
8. Develop employer contracts and employee procedures
When you’re hiring your first employee, think about developing clear processes to help you hire and train your new employee. For example, start with an interviewing procedure so you can ensure all the candidates are treated the same. Once you’ve chosen a successful candiate, create an induction and training and development process so you can integrate your new employee quickly and easily. There are lots of resources and best practices available online and if you need professional help, we recommend calling HR Team, who we’ve worked with in the past.
9. Outsource payroll processing
Hiring your first employee means you need to pay them a salary. All payments to an employee needs to be reported to Revenue on or before the employee is paid (check out our post on PAYE modernisation in Ireland). You need certain employee personal information, complete records of working hours and ensure the correct taxes are paid to Revenue. If you’re unsure about payroll processing, you can outsource this task to a professional.
Our Client Services Team are happy to discuss your tax registration and payroll requirements so you know how to start hiring employee. Talk to us today about how we can help.
Kiera is the Head of Cloud Services at Kinore, leading the Bookkeeping, VAT, and Payroll Teams. Kiera has worked in the financial services industry for over 18 years. She is passionate about helping businesses to get their finances in order so they can get back to what’s important: running your business. Kiera holds a part-qualified accountant qualification from ACCA.