# How to Hire Your First Employee as a Bootstrapped Founder

> How to hire your first employee as a bootstrapped founder: when you can afford it, which role first, true UK and US employer costs, EOR prices and the paperwork.

- Canonical: https://zeroraised.com/blog/how-to-hire-your-first-employee-as-a-bootstrapped-founder
- Published: 2026-11-09T15:30:00Z
- Author: ZeroRaised Team (https://zeroraised.com/blog/authors/zeroraised)
- Publisher: ZeroRaised (https://zeroraised.com/)
- Section: Building
- Tags: hiring, operations, payroll, bootstrapping

**Short answer:** Hire your first employee when you can list about 20 hours a week of repeatable work for one role and your revenue covers the fully loaded cost, not just the salary, with several months of that cost in the bank. For most bootstrapped software businesses the first hire is a support and operations generalist, not an engineer. Start with a paid trial and get the legal paperwork done before day one.

Every rate, threshold and price below comes from gov.uk, the IRS or the vendor's own page, checked on 9 Nov 2026. The advice in between is ours and is marked as such. This is not legal or tax advice.

## TL;DR

- **Timing:** Brian Casel's bootstrapper rule is about 20 hours a week of repeatable tasks: "I think a good rule of thumb is 20 hours" ([Brian Casel](https://briancasel.com/hiring-your-first-employee)).
- **UK costs 2026-27:** employer NI is 15% above a secondary threshold of £5,000 a year ([gov.uk rates and thresholds](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027)). Employment Allowance is up to £10,500 ([gov.uk](https://www.gov.uk/claim-employment-allowance)). Minimum employer pension is 3% ([gov.uk](https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay)).
- **US costs:** employer FICA is 6.2% plus 1.45% ([IRS Topic 751](https://www.irs.gov/taxtopics/tc751)), and FUTA is 6.0% on the first $7,000, or 0.6% after the full credit ([IRS Topic 759](https://www.irs.gov/taxtopics/tc759)).
- **Hiring abroad:** employer of record platforms start at $599 per employee per month (Deel, Remote) and $699 (Oyster).
- **Paperwork:** in the UK, check right to work before the start date and give the principal written statement on the first day.

**Disclosure:** ZeroRaised publishes this guide and is a launch site for bootstrapped products. ZeroRaised has no commercial relationship with any company named here and earns nothing if you use them. Facts come from the linked sources as checked on 9 Nov 2026.

## Employee or contractor first?

This guide is about a real employee on your payroll, full-time or part-time. If you have not worked with anyone yet, a contractor is usually the better first step, and our guide on [how to hire your first contractor as a solo founder](https://zeroraised.com/blog/how-to-hire-your-first-contractor-as-a-solo-founder) covers briefs, platforms, fees and contracts.

Our read: a contractor still wins when the work is a project with a finish line, may not exist in six months, or would be a fixed cost you cannot carry through a bad quarter. An employee wins when the work repeats every week and the value grows as the person learns your customers. Brian Casel, whose bootstrapper hiring post we lean on below, also says "Start with contractors" ([Brian Casel](https://briancasel.com/hiring-your-first-employee)).

## When can you afford your first employee?

### Enough work: the 20-hour rule

Casel's post (dated June 23rd, 2014) suggests listing every repeatable task you would hand over, things the person "can do week after week", and says: "I think a good rule of thumb is 20 hours." Once your list reaches that, you are "about ready to fill that role, at least on a part-time basis" ([Brian Casel](https://briancasel.com/hiring-your-first-employee)).

He is also candid that "My first hiring experience was a failure", and puts it down to his business not being ready. If you cannot fill 20 hours with specific, written tasks, the hire will spend their first month waiting on you.

### Enough money: our rule of thumb

This part is ours, not a published standard. Work out the **fully loaded cost** of the role (salary plus employer taxes, pension or benefits and software; the worked examples below show how), your **trailing monthly profit before your own pay** averaged over three to six months, and your **cash** after paying yourself.

Hire when the fully loaded monthly cost is no more than about a third of that trailing profit and you hold at least six months of it in cash. That covers a slow quarter and the ramp-up months while still paying yourself. If you are not paying yourself yet, fix that first; our guide on [how to get to $10k MRR](https://zeroraised.com/blog/how-to-get-to-10k-mrr) is the better use of your time until then.

## Which role to hire first

Our read, for a software or SaaS business run by a technical founder:

| First hire | Hire it first when | Watch out for |
|---|---|---|
| Support and operations generalist | Support, onboarding, billing questions and admin take most of your week | Needs clear docs and saved replies, or they will escalate everything to you |
| Engineer | Product work is the bottleneck and customers are waiting on features you cannot ship | You become a manager and reviewer overnight; the most expensive role to get wrong |
| Marketer or content person | You have product-market fit and a channel that works, but no time to feed it | Hard to judge results in the first three months |

For most bootstrapped founders, the generalist comes first: it is the easiest role to fill with 20 hours of repeatable tasks, and it frees you for the sales and product work only you can do. Casel's own first hire fits: "I hired my first virtual assistant" ([Brian Casel](https://briancasel.com/hiring-your-first-employee)). If you are technical, hiring an engineer first usually turns you into a reviewer without freeing the support and admin hours that were really slowing you down.

If support is the main load, set it up before you hand it over. Our guide on [how to handle support as a solo founder](https://zeroraised.com/blog/how-to-handle-support-as-a-solo-founder) covers the help desk, saved replies and docs a new hire will need.

## What a first employee really costs in the UK

Rates for the 2026-27 tax year, which runs 6 April 2026 to 5 April 2027, from gov.uk:

| Item | Figure | Source |
|---|---|---|
| Employer (secondary) Class 1 NI rate | 15% | [gov.uk rates and thresholds](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027) |
| Secondary threshold | £96 a week, £417 a month, £5,000 a year | [gov.uk rates and thresholds](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027) |
| Employment Allowance | Up to £10,500 off your annual employer NI | [gov.uk Employment Allowance](https://www.gov.uk/claim-employment-allowance) |
| Minimum pension contribution | 8% total, at least 3% from the employer | [gov.uk workplace pensions](https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay) |
| Pensionable earnings band | £6,240 to £50,270 a year | [gov.uk workplace pensions](https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay) |

**Employment Allowance and the single director.** Many solo founders run a limited company where they are the only person on payroll. Gov.uk says: "If your company has only one director, they must not be the only employee liable for secondary Class 1 National Insurance" ([gov.uk eligibility](https://www.gov.uk/claim-employment-allowance/eligibility)). A first employee earning above the threshold can therefore make the company eligible, which can wipe out employer NI on a single hire. Check the other conditions on that page.

**Auto-enrolment.** You must enrol staff who are aged between 22 and State Pension age, "earn at least £10,000 a year" and normally work in the UK ([gov.uk workplace pensions for employers](https://www.gov.uk/workplace-pensions-employers)).

### Worked example: a £40,000 UK hire

Illustrative arithmetic from the rates above. It ignores benefits, equipment and any pension contributions above the minimum.

| Line | Calculation | Annual cost |
|---|---|---|
| Salary | | £40,000.00 |
| Employer NI | (£40,000 - £5,000) x 15% | £5,250.00 |
| Employer pension (minimum) | (£40,000 - £6,240) x 3% | £1,012.80 |
| **Total before Employment Allowance** | | **£46,262.80** |
| Employment Allowance, if eligible | covers the full £5,250 of NI | -£5,250.00 |
| **Total with Employment Allowance** | | **£41,012.80** |

Add payroll software. Xero UK's Grow plan is £39 a month excluding VAT after the introductory offer and includes "Payroll for 1 person", with extra people at £1.50 each ([Xero UK pricing](https://www.xero.com/uk/pricing-plans/)); your own director salary would make two. BrightPay's desktop product "will be discontinued after 5th April 2026", and its cloud version is priced through a calculator rather than a list price ([BrightPay pricing](https://www.brightpay.co.uk/pricing/)).

## What a first employee really costs in the US

Federal payroll taxes from the IRS:

| Tax | Employer rate | Wage base | Source |
|---|---|---|---|
| Social Security | 6.2% | First $184,500 of wages in 2026 | [IRS Topic 751](https://www.irs.gov/taxtopics/tc751) |
| Medicare | 1.45% | No limit | [IRS Topic 751](https://www.irs.gov/taxtopics/tc751) |
| FUTA | 6.0%, or 0.6% after the maximum 5.4% credit | First $7,000 per employee | [IRS Topic 759](https://www.irs.gov/taxtopics/tc759) |

The IRS notes the FUTA credit can be reduced in credit reduction states. State unemployment insurance and any state or local payroll taxes come on top and vary by state.

### Worked example: a $70,000 US hire

Illustrative arithmetic, assuming the full FUTA credit. It excludes state unemployment tax, health insurance, retirement contributions and payroll software.

| Line | Calculation | Annual cost |
|---|---|---|
| Salary | | $70,000 |
| Social Security | $70,000 x 6.2% | $4,340 |
| Medicare | $70,000 x 1.45% | $1,015 |
| FUTA | $7,000 x 0.6% | $42 |
| **Total** | | **$75,397** |

Our read: health insurance is often the biggest extra in the US, so get a quote before you set the salary. Gusto's pricing page blocked our checker today, so we have not listed a US payroll price.

## Hiring outside your country: employer of record

If the best candidate lives somewhere you have no company, an employer of record (EOR) employs them locally and handles payroll, tax and local contracts. List prices checked today:

| Provider | EOR list price | Source |
|---|---|---|
| Deel | From $599 per employee per month | [Deel pricing](https://www.deel.com/pricing/) |
| Remote | From $599 per employee per month, for annual contracts | [Remote pricing](https://remote.com/pricing) |
| Oyster | $699 per employee per month, annual discounts available | [Oyster pricing](https://www.oysterhr.com/pricing) |

At $599 a month, the platform fee alone is $7,188 a year before salary and local employer costs. Our read: that is a large overhead on one person, so compare it with a long-term contractor arrangement and ask for a full quote including local taxes and statutory benefits.

## The UK paperwork before day one

- **Right to work.** "You must check that a job applicant is allowed to work for you in the UK before you employ them" ([gov.uk](https://www.gov.uk/check-job-applicant-right-to-work)). Getting it wrong can mean "a civil penalty (fine) of up to £60,000 for each illegal worker" ([gov.uk penalties](https://www.gov.uk/penalties-for-employing-illegal-workers)).
- **Written statement.** "The employer must provide the principal statement on the first day of employment", with the wider statement due within 2 months ([gov.uk written statement](https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars)). The principal statement covers job title, start date, pay, hours, holiday, place of work and any probation period, among other things.
- **Payroll and pension.** Register as an employer with HMRC, set up payroll and choose a pension scheme for auto-enrolment.

## How to run the hire

A process we would use, in order:

1. **Turn the task list into a job description.** What they do each week, what good looks like after 90 days, salary range, hours, time zones and how to apply. Ask for a written answer to a real scenario, such as an anonymised support ticket.
2. **Post where your people are.** Your customers, newsletter and social audience come first; they already know the product. For a public listing, Wellfound says "Post jobs free", with optional promoted ads "From $200 / ad" ([Wellfound pricing](https://wellfound.com/recruit/pricing)).
3. **Run a paid trial.** A few hours to a week of real, paid work. Our read: it tells you more than any interview.
4. **Offer with a written probation period**, set out in the written statement. Casel's advice: "Start with part-time. Most of my employees start at 25 hours and increase over time" ([Brian Casel](https://briancasel.com/hiring-your-first-employee)).
5. **Plan the first two weeks.** Access, docs, saved replies, a short check-in call each morning for the first fortnight, then weekly, and a written list of what they own.

## Equity, profit share or neither?

Our read: equity in a bootstrapped company that may never sell is worth little to an employee and is costly to set up. A profit share or bonus tied to revenue is easier to understand and costs nothing in a bad year. Put the formula and payment timing in writing, and pay a fair salary first; a profit share is a bonus, not a substitute for market pay.

## Frequently asked questions

### When should a bootstrapped founder hire their first employee?

When you can write down roughly 20 hours a week of repeatable work for one role, which is Brian Casel's rule of thumb, and when your revenue covers the fully loaded cost of the hire on top of your own pay, with several months of that cost in the bank. Our rule of thumb is to keep the fully loaded cost at or below about a third of trailing monthly profit before your own pay, and to hold six months of it in cash.

### How much does a first employee really cost in the UK?

More than the salary. For 2026-27, employer National Insurance is 15% on earnings above £5,000 a year, and auto-enrolment requires at least a 3% employer pension contribution on qualifying earnings. In our worked example, a £40,000 hire costs about £46,263 a year before Employment Allowance, or about £41,013 if you can claim the full allowance, plus payroll software.

### How much does a first employee cost in the US?

Employers pay 6.2% Social Security (on wages up to $184,500 in 2026) and 1.45% Medicare, plus FUTA. FUTA is 6.0% on the first $7,000 of wages, or 0.6% after the maximum 5.4% credit. In our worked example, a $70,000 hire costs about $75,397 in salary and federal payroll taxes, before state unemployment tax, benefits and payroll software.

### Should my first hire be an employee or a contractor?

Start with a contractor if the work is a defined project with a finish line, if you are not sure the work will last, or if you cannot yet cover months of a fixed salary. Move to an employee when the work is ongoing, you want to direct how and when it is done, and you want the person to build knowledge of your customers over years.

### Can I hire an employee in another country without setting up a company there?

Yes, through an employer of record, which employs the person locally on your behalf. On today's list prices Deel's EOR starts at $599 per employee per month, Remote's at $599 for annual contracts and Oyster's at $699. Ask for a full quote that shows local employer taxes and benefits as well as the platform fee.

## Grow without giving up equity

ZeroRaised is a launch directory for products built without institutional VC. If you are hiring because customers are paying, [launch your product on ZeroRaised](https://zeroraised.com/submit) for free and put it in front of more of them. For more guides on running a company funded by customers, [join the ZeroRaised newsletter](https://zeroraised.com/newsletter).

## Sources

- [Brian Casel, A Bootstrapper's Formula For Hiring Your First Employee](https://briancasel.com/hiring-your-first-employee), last checked 9 Nov 2026
- [gov.uk, Rates and thresholds for employers 2026 to 2027](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027), last checked 9 Nov 2026
- [gov.uk, Employment Allowance](https://www.gov.uk/claim-employment-allowance), last checked 9 Nov 2026
- [gov.uk, Employment Allowance eligibility](https://www.gov.uk/claim-employment-allowance/eligibility), last checked 9 Nov 2026
- [gov.uk, Workplace pensions: what you, your employer and the government pay](https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay), last checked 9 Nov 2026
- [gov.uk, Workplace pensions for employers](https://www.gov.uk/workplace-pensions-employers), last checked 9 Nov 2026
- [gov.uk, Check a job applicant's right to work](https://www.gov.uk/check-job-applicant-right-to-work), last checked 9 Nov 2026
- [gov.uk, Penalties for employing illegal workers](https://www.gov.uk/penalties-for-employing-illegal-workers), last checked 9 Nov 2026
- [gov.uk, Written statement of employment particulars](https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars), last checked 9 Nov 2026
- [IRS Topic 751, Social Security and Medicare withholding rates](https://www.irs.gov/taxtopics/tc751), last checked 9 Nov 2026
- [IRS Topic 759, Form 940 FUTA tax return](https://www.irs.gov/taxtopics/tc759), last checked 9 Nov 2026
- [Deel pricing](https://www.deel.com/pricing/), last checked 9 Nov 2026
- [Remote pricing](https://remote.com/pricing), last checked 9 Nov 2026
- [Oyster pricing](https://www.oysterhr.com/pricing), last checked 9 Nov 2026
- [Xero UK pricing](https://www.xero.com/uk/pricing-plans/), last checked 9 Nov 2026
- [BrightPay pricing](https://www.brightpay.co.uk/pricing/), last checked 9 Nov 2026
- [Wellfound recruiting pricing](https://wellfound.com/recruit/pricing), last checked 9 Nov 2026

## Frequently asked questions

### When should a bootstrapped founder hire their first employee?

When you can write down roughly 20 hours a week of repeatable work for one role, which is Brian Casel's rule of thumb, and when your revenue covers the fully loaded cost of the hire on top of your own pay, with several months of that cost in the bank. Our rule of thumb is to keep the fully loaded cost at or below about a third of trailing monthly profit before your own pay, and to hold six months of it in cash.

### How much does a first employee really cost in the UK?

More than the salary. For 2026-27, employer National Insurance is 15% on earnings above £5,000 a year, and auto-enrolment requires at least a 3% employer pension contribution on qualifying earnings. In our worked example, a £40,000 hire costs about £46,263 a year before Employment Allowance, or about £41,013 if you can claim the full allowance, plus payroll software.

### How much does a first employee cost in the US?

Employers pay 6.2% Social Security (on wages up to $184,500 in 2026) and 1.45% Medicare, plus FUTA. FUTA is 6.0% on the first $7,000 of wages, or 0.6% after the maximum 5.4% credit. In our worked example, a $70,000 hire costs about $75,397 in salary and federal payroll taxes, before state unemployment tax, benefits and payroll software.

### Should my first hire be an employee or a contractor?

Start with a contractor if the work is a defined project with a finish line, if you are not sure the work will last, or if you cannot yet cover months of a fixed salary. Move to an employee when the work is ongoing, you want to direct how and when it is done, and you want the person to build knowledge of your customers over years.

### Can I hire an employee in another country without setting up a company there?

Yes, through an employer of record, which employs the person locally on your behalf. On today's list prices Deel's EOR starts at $599 per employee per month, Remote's at $599 for annual contracts and Oyster's at $699. Ask for a full quote that shows local employer taxes and benefits as well as the platform fee.