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The Legislation

PAYE

PAYE (Pay As You Earn) is a system by which Income Tax, National Insurance, Pension etc are withheld from payments to employees and paid directly from the employer to HMRC.

The Legislation

As an employer, you normally have to operate PAYE as part of your payroll. You'll need to complete HMRC's Full Payment Submission (FPS) to submit payroll records to HMRC

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Reporting Pay & Deductions 

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  • You need to report your employees’ payments and deductions to HMRC (via FPS) on or before each payday

  • Your payroll software will work out how much tax and National Insurance is owed, including an employer’s National Insurance contribution on each employee’s earnings above £169 a week

  • You’ll need to send another report to claim any reduction on what you owe HMRC, for example for statutory pay

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Paying HMRC

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You will be able to view what you owe HMRC, based on your reports. You then will usually have to pay them on a monthly basis.

If you’re a small employer that expects to pay less than £1,500 a month, you can arrange to pay quarterly.

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You must pay your PAYE bill to HM Revenue and Customs (HMRC) by:

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  • The 22nd of the next tax month if you pay monthly

  • The 22nd after the end of the quarter if you pay quarterly - for example, payment by the 22 July for the quarter 6 April to 5 July

How can we help?

  • Register you for PAYE

  • Help with selection of payroll software or using one of the software packages we use

  • Run PAYE (payroll) through HMRC approved accounting software

  • Record sums paid to employees and deductions made

  • Create employee payslips

  • Pay deductions to HMRC

  • Maintain accurate payroll and PAYE tax records

  • Manage PAYE submission deadlines

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