HMRC: What is PAYE?

In a nutshell

PAYE is HMRC’s system to collect Income Tax and National Insurance from employment.

As an employer, you typically have to operate PAYE so that you tell HMRC about:

• Payments to your employees – wages, bonuses, sick pay etc.
• Deductions from their pay – tax, National Insurance, student loan repayments, pension contributions, etc.

What are my responsibilities as an employer?

You need to report your employee’s payments and deductions to HMRC on or before each payday.

You can use payroll software to work out how much tax and National insurance you owe based on the payments and deductions you reported.

How do I pay HMRC?

You can use PAYE Online to:

• View how much you owe based on your reports.
• Pay your bill (usually pay every month).
• See your payment history
• Setup alerts for late payments.

Sources

• PAYE for employers – Gov.uk
• PAYE Online – Gov.uk