Letter from the table: The cost of making the first hire

To the Team Council,

I am writing from the First Ten Hires diary. My stance is amend. I support making it easier for a small employer to hire formally, but the fix needs to recognise that the headline cost is only one part of the decision—and that existing relief does not make the decision simple.

The hire I kept postponing

On 12 January 2026, I sat down with my accountant to price a first employee. I had work that I could no longer keep fitting around everything else. I was not looking for a way to avoid paying properly. I wanted to know what I would have to set aside each month, what I had to register for, and whether I could keep paying if a quiet month arrived.

The working figure was £2,100 gross a month. Under the employer National Insurance rules then in force, the rate was 15% above the £5,000 annual secondary threshold. At that salary, the employer NIC came to roughly £252 a month, or about £3,030 over a full year, before any Employment Allowance or other adjustments. My accountant explained that eligible employers could claim the Employment Allowance, then worth up to £10,500 a tax year. That mattered. But it was not a number I could simply subtract without checking whether I qualified and how the claim would work for my circumstances.

The estimate did not include the whole job of employing someone. I would need to register as an employer with HMRC before the first payday, run PAYE, report pay and deductions through Real Time Information on or before payday, and check my workplace pension duties. I needed a cash reserve for employer costs and for the weeks when invoices arrived later

than expected. The uncertainty was not that nobody could tell me the rules; it was that I had to assemble several rules, thresholds, dates and conditions into one reliable monthly figure.

What I changed while I waited

I postponed the start date instead of promising hours I was not sure I could sustain. For several months I kept doing the extra administration myself and narrowed the work I accepted. I put a fixed amount into a separate account each month, as if I were already paying the employer costs. I also asked my accountant to run the numbers again with the Employment Allowance treated as a possible offset, not as money guaranteed in advance.

That changed the decision from “Can I afford the salary?” to “Can I afford the salary, the payroll routine and a delay in income without missing a payment?” It was a sensible test, but it cost time. Work that could have been handed over stayed with me. The delay did not make the job disappear; it moved the pressure back onto the owner.

On 1 June, I began with a smaller, clearly defined part-time role rather than the hours I had first hoped to offer. I set up payroll before the first payday and kept a monthly check on the actual employer costs against my estimate. I also recorded the time spent dealing with registration, payroll and pension checks, because those hours were part of the cost even when they did not appear on a payslip.

What the standard should change

I support the Team Council’s aim: lower, simpler employment costs for a business’s first ten hires, so that a small employer can create formal jobs. I do not support making the standard a promise of one identical discount everywhere. Rules differ, and a measure that ignores existing relief could be wasteful in one place and too small to help in another.

Please amend the draft to set out three practical tests for any proposed relief. First, show the employer’s net cost after existing allowances and exemptions, with eligibility explained plainly. Second, make any additional support predictable and easy to use—ideally phased and capped for genuinely new hires, with safeguards against replacing existing workers simply to claim it. Third, require a simple, coordinated route through the relevant registration and payroll steps, so a new employer can see what must be done and by when.

The standard should also distinguish a reduction in the cost of hiring from a reduction in workers’ pay or protections. I want the first ten hires to be easier to make, not cheaper because the worker bears the risk. A small employer needs a dependable answer before the first contract is signed: the likely cost, the relief available, and the duties that follow.