Adding Employees – Basic Information Step 2

After setting up your first Company you will be guided through the process of entering your first Employee. The first step of the setup process asks for basic information like the Employee Name and Join Date.
KashFlow Payroll needs to know if the employee is an actual new starter (also called a joiner) or if you’ve paid them before using some other payroll system.  To find employee details; new starters usually have a P45 from their previous employer whereas employees that you have paid before will have details in your previous payroll system.

Starter Declaration

If you are entering an actual new starter then HMRC needs to know what kind of starter they are; please select A, B, C or ‘unknown’ if the employee has not given you enough information.  The following factors determine exactly what Tax code you need to use for the new starter:

  • Do they have a P45
  • Does the P45 relate to this year, last year or an even old year
  • Is the Tax Code on the P45 BR, 0T or D0
  • Is the employee starting on or before 24th May or after 24th May

It is up to you to enter the correct Tax Code on one of the other tabs below, but KashFlow Payroll will set a default for you as best it can.  Full HMRC guidance on setting the Tax code of a new starter can be found here


If the employee is, or has been, a director since 6th April then KashFlow Payroll needs to know the date that the directorship started (and ended if in the current Tax Year) and the NIC Calculation Method (National Insurance Contributions).  A director can chose to have their NICs calculated in one of two ways:

  • As Director: NICs are calculated cumulatively, that is to say on a Year To date basis like Tax normally is.
  • Like Employee: NICs are calculated non-cumulatively; which is the way NICs are normally calculated for employees.  However, in the last payment for the year (or the directorship itself) KashFlow Payroll will automatically recalculate NICs on a cumulative basis as required by HMRC.

See how IRIS KashFlow works with your business and your books