Your business is growing and you want to hire your first employee. A great step, but tax obligations come with it that you must arrange in advance. Many entrepreneurs underestimate this. This article gives a checklist of what to do as an employer.
What must you arrange before hiring someone?
Before hiring staff, you register as an employer with the tax authorities. You then get a payroll tax number with which you file payroll returns. In addition you record the employment contract and verify your employee's identity with a valid ID.
What is payroll tax?
As an employer you withhold payroll tax from your employee's salary and remit it to the tax authorities. Payroll tax consists of wage tax, national insurance contributions and contributions for employee insurances. You file periodic payroll returns for this.
What costs come with it?
Besides the gross salary you as employer pay extra charges, such as employer contributions and possibly holiday pay and pension. So calculate with an amount higher than just the gross salary. A rule of thumb is that the actual costs are considerably above the gross salary.
How do you arrange the payroll administration?
Correct payroll administration is mandatory and precise. You calculate the net salary, the deductions and the remittances, and provide payslips to your employee. Most entrepreneurs outsource this to a bookkeeper or payroll processor, because the rules are complex and mistakes can be costly.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
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