Taking On Your First Employee: What It Actually Costs a Stove Installation Business

You know you're past the point of "maybe next year" when you're turning down jobs in October because you can't get a flue liner in before the customer's gas boiler breakdown leaves them without heat, and you've already got three installs booked that week. That's the moment most sole-trader installers start asking whether to take someone on, and most of them put it off for another year because the sums look scarier than they are.

They're not as scary as they look, but they're not nothing either. Here's what actually changes once you go from subcontracting the odd mate-rate labourer to properly employing someone.

Employee, apprentice, or subcontractor: they're genuinely different decisions

If you've read our piece on CIS and whether it applies to your subcontractor work, you'll know subcontracting another HETAS-registered installer for overflow work is the easy option: no PAYE, no employer National Insurance, no ongoing commitment. It's the right call for covering a busy fortnight.

Taking someone on as an employee is a different commitment, and it's the one that actually grows the business, because you're training someone into your way of working rather than handing jobs to someone who already runs their own van and their own rules. An apprentice is a third option again: lower pay while they train, but you're the one responsible for their competence sign-off until they're qualified enough to register with HETAS in their own right, which typically takes two to three years depending on the training route.

What an employee costs you beyond their wage

The headline number, the hourly rate, isn't the number that catches people out. It's everything stacked on top of it.

From April 2026, the National Living Wage for anyone 21 or over is £12.71 an hour. If you're taking on someone 18 to 20, it's £10.85. An apprentice, or anyone under 18, is paid the apprentice rate of £8.00 an hour for the first year of their apprenticeship (after that, they move to the rate for their age).

On top of gross pay, you're liable for employer National Insurance once their earnings go above £5,000 a year, charged at 15% of everything above that threshold. For a full-time employee on £12.71 an hour, that's a meaningful chunk. Most small installation businesses don't actually pay it in practice, though, because the Employment Allowance wipes out the first £10,500 of employer NI liability each year. For a one or two-person team, that allowance typically covers employer NI on roughly the first £70,000 of pay above the threshold, which is most of what a small installer business will pay in a year. It's not automatic, though: you claim it through your payroll software via an Employer Payment Summary, and it's easy to miss if your accountant hasn't flagged it.

Then there's the one that genuinely is compulsory and genuinely does get enforced: Employers' Liability insurance. The moment you have anyone working for you, even a part-time apprentice, you're legally required to hold at least £5 million of cover under the Employers' Liability (Compulsory Insurance) Act 1969. Miss it and the fine is up to £2,500 a day, not a one-off penalty. It's usually a cheap add-on to your existing public liability policy, but it has to be in place before they start, not sorted out in their first week.

The apprentice route changed in August 2026

If you're thinking about training someone from scratch rather than hiring someone already competent, the funding landscape shifted this year. Previously, employers with fewer than 50 staff got apprenticeship training fully funded regardless of the apprentice's age. From August 2026, that small-employer waiver was replaced with an age-based rule: non-levy-paying employers (which covers almost every stove installer) get full government funding for training costs when the apprentice is between 16 and 24 at the start of their apprenticeship, whatever the size of the business. Outside that age bracket, you'd be expected to contribute towards the training cost yourself.

That's worth knowing because it changes who's worth taking on. A 22-year-old with a construction background and an interest in heating systems costs you their wage and nothing towards the HETAS-recognised training; a 27-year-old career-changer with the same enthusiasm would mean a co-investment conversation with your training provider first.

In practice, the apprentice route works best when you've got enough steady work to keep someone busy on prep, stripping out old appliances, running materials, and shadowing installs, while you handle the technical sign-off and HETAS paperwork yourself. It's slower than hiring someone already registered, but it's the only way to build loyalty to your way of doing things rather than inheriting someone else's habits.

Setting up payroll is the boring bit, but don't skip it

Once you've decided to employ rather than subcontract, you need to register as an employer with HMRC before the first payday (allow a couple of weeks for your PAYE reference to come through), run payroll through either software or an accountant, and auto-enrol them into a workplace pension if they're eligible: earning over £10,000 a year and aged 22 to State Pension age. None of this is optional once you've got someone on the books, and the penalties for getting auto-enrolment wrong tend to come as a surprise letter from The Pensions Regulator months after the fact rather than anything immediate.

What actually changes day to day

The thing that catches installers out isn't the cost, it's the scheduling. The moment you have a second person on site, you need to know who's where, what each job needs them to bring, and whether the HETAS paperwork and completion photos for yesterday's job actually got filed before today's starts. It's no longer all living in your head. That's usually the point where a shared system for tracking jobs from enquiry to completion stops being a nice-to-have and starts being the thing that stops two people turning up to the same address, or a flue liner warranty registration slipping through the gap between you and whoever you've just taken on. If that's the stage you're at, it's worth a look at how BurnerCRM handles job assignment and compliance records across a team, rather than just one installer's diary.