First Employee: Legal Checklist Before Day One

Table of Contents

Who should read this?

Ideal for Irish startup founders, solopreneurs, and small business owners hiring their first employee and needing to navigate employment law compliantly.

This article provides a step-by-step checklist to set up employer obligations correctly, prevent penalties, ensure smooth onboarding, and build strong legal foundations from day one.

Key Takeaways

Hiring first employee activates employment law, PAYE, health/safety, data protection from day one; prepare beforehand.
Register as employer with Revenue via ROS before first pay for PAYE Modernisation compliance.
Collect PPS, notify Revenue for RPN to avoid emergency tax on first payslip.
Issue core terms within 5 days; full contract best before start; set up payroll properly.
Mandatory policies: safety statement, dignity at work, protected disclosures; verify right to work, workstation assessment.

Why the First Hire Is Different

Going from a founder-only company to a company with one employee is one of the most significant legal transitions a startup makes, and it happens quietly, there is no formal trigger, no application to submit, and no approval required.

What changes is everything else. Employment law, health and safety law, PAYE obligations, data protection requirements, and statutory leave entitlements all activate at the moment your first employee starts. Most of these obligations cannot be satisfied retrospectively, which means that getting the groundwork in place before day one is not just good practice, it is a legal requirement in most cases.

Step 1: Register as an Employer with Revenue

Before your employee receives their first payslip, you must be registered as an employer with Revenue.

Employer registration is completed through Revenue's Online Service (ROS), and you will need your company's tax registration number to do so. Once registered, you will be set up to operate PAYE, PRSI, and USC through the payroll system.

Revenue operates a real-time reporting system called PAYE Modernisation under which payroll submissions must be made to Revenue on or before each pay date. This requires either payroll software that integrates with Revenue's systems or a payroll provider who handles the submissions on your behalf.

Failing to register before your employee's first pay date means you are operating outside the PAYE system from the start, which creates penalties and arrears that are both avoidable and unnecessary.

Step 2: Collect the Employee's Tax Details

Before processing the first payslip, you need the employee's Personal Public Service (PPS) number and must notify Revenue of the new employment through ROS.

Revenue will then issue a Revenue Payroll Notification (RPN) for the employee, which tells you what tax credits and cut-off points apply to their salary. Without an RPN, you are required to deduct tax on an emergency basis, at a higher rate, which is something most employees will notice and object to on their first payslip.

Notifying Revenue of the new employment as soon as the employee has confirmed their start date avoids emergency tax and demonstrates that you are operating the system correctly from day one.

Step 3: Set Up Payroll

Payroll for even one employee involves calculating PAYE income tax, PRSI contributions, USC, and any other deductions, submitting a payroll file to Revenue before each pay date, and issuing payslips to the employee.

For most early-stage companies, the practical choice is between using payroll software and outsourcing to a payroll provider. Both are valid approaches. What is not valid is running payroll manually, outside of Revenue's real-time reporting system, or paying an employee as though they were a contractor when they are not.

Payslips must be provided to employees on or before each pay date, and they must contain specific information including gross pay, all deductions, and net pay.

Step 4: Issue Written Employment Terms Within Five Days

The Employment (Miscellaneous Provisions) Act 2018 requires that certain core terms be provided in writing within five days of the employee's start date.

Those five-day terms are:

The full name of the employer and the employee
The address of the employer
The expected duration of the contract, or end date if fixed-term
The rate or method of calculating pay
The expected hours of work per normal working day and working week

The full set of contractual terms, job title, place of work, annual leave, notice periods, sick leave entitlements, pension details, and probation terms, must follow within one month.

In practice, issuing a complete signed employment contract before the employee starts is the cleanest approach. Splitting the process into a five-day statement and a one-month contract creates an unnecessary two-step process that is easy to miss.

Step 5: Set Up the Required Workplace Policies

Three policies are legally required from the moment you have an employee, and they must be in place before the employee starts, not introduced once the team grows.

Safety statement: required under Section 20 of the Safety, Health and Welfare at Work Act 2005. This must identify the hazards in your workplace, assess the risks, and set out the measures in place to manage them. For a small office-based team, this can be a concise document, but it must exist in writing and be brought to the attention of every employee.

Dignity at work policy: required under the Employment Equality Acts 1998–2015. This sets out the company's commitment to a workplace free from harassment and bullying, and provides a mechanism for raising complaints. Without it, the company has no defence if a harassment claim arises later.

Protected disclosures policy: formally required for companies with five or more employees under the Protected Disclosures (Amendment) Act 2022, but strongly advisable from the first hire given that individual whistleblower protections apply regardless of company size.

Beyond these mandatory policies, a basic disciplinary procedure and grievance procedure should also be in place before employment begins, as their absence will significantly weaken your position in any future WRC claim.

These policies should be provided to the employee at onboarding, ideally as part of a simple employee handbook, and their receipt should be acknowledged in writing.

Step 6: Register for Employer's PRSI

PRSI, Pay Related Social Insurance, is a contribution made by both employers and employees and forms the basis for entitlement to social welfare benefits.

Employer's PRSI is payable on top of the employee's gross salary and is currently charged at 11.05% for most employees earning above the weekly threshold. This is a cost that must be factored into the total employment cost from the outset, as it sits on top of gross salary and is not deducted from the employee's pay.

Employer PRSI registration is handled through Revenue as part of the employer registration process, so no separate step is required, but the cost must be planned for in the company's budget before the first hire is made.

Step 7: Check Right to Work

Before an employee starts, you must verify that they have the right to work in Ireland.

For EEA nationals, this is straightforward, a passport or national identity card is sufficient. For non-EEA nationals, you must verify that they hold a valid employment permit issued by the Department of Enterprise, Trade and Employment, or that they hold a status that entitles them to work without a permit.

Employing someone without the right to work exposes the company to significant penalties under the Employment Permits Acts, including fines of up to €250,000 and potential prosecution. Keeping a copy of the verification documents on file is important, if the issue is ever investigated, you need to be able to demonstrate that a check was carried out.

Step 8: Address Health and Safety Before the Employee Arrives

Health and safety obligations extend beyond the safety statement. Before your first employee starts, you should also:

Carry out a workstation assessment for any employee doing screen-based work, as required under the Display Screen Equipment Regulations 2007. This applies from the first day of screen-based work and can be conducted using a simple self-assessment form.

Ensure the workplace meets basic standards under the Safety, Health and Welfare at Work Act 2005, adequate lighting, ventilation, sanitary facilities, first aid provisions, and emergency procedures must all be in place.

Provide relevant safety information to the employee at induction, what the emergency procedures are, where the first aid kit is located, and who to contact if a safety concern arises.

For a remote-first company, health and safety obligations still apply, and the safety statement should address home working specifically, including workstation setup and display screen equipment.

The Day One Checklist

By the time your first employee starts, the following should be confirmed:

Employer registration with Revenue is complete
Employee's PPS number has been collected and Revenue notified
Payroll system is set up and an RPN has been received
Signed employment contract has been issued and returned
Safety statement has been prepared and provided to the employee
Dignity at work policy has been provided
Protected disclosures policy has been provided
Disciplinary and grievance procedures have been provided
Right to work has been verified and documented
Workstation assessment has been completed or scheduled

About the Author:

Connect:

Laura Ryan is a practising Barrister at the Bar of Ireland. She graduated from the Honourable Society of King’s Inns in 2024, having previously qualified and practised as a Chartered Accountant in a big four accounting firm.

Legal

March 2026

Hiring Your First Employee: Legal Checklist

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Frequently Asked Questions

How do I register as an employer with Revenue?

What tax details do I need from my first employee?

What core terms must be given in writing within five days?

What policies are required before the first employee starts?

How do I verify right to work in Ireland?

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