PAYE and payroll for employers

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Introduction to PAYE

As an employer, you normally have to operate PAYE as part of your payroll. PAYE is HM Revenue and Customs바카라 사이트� (HMRC) system to collect Income Tax and National Insurance from employment.

This guide is also available聽in Welsh (Cymraeg).

When you must register

You must register for PAYE if any of the following applies to an employee in the current tax year (since 6 April):

  • they바카라 사이트檙e paid 拢96 or more a week
  • they get expenses and company benefits
  • they바카라 사이트檙e getting a pension
  • they바카라 사이트檝e had another job
  • they바카라 사이트檝e received Jobseeker바카라 사이트檚 Allowance, Employment and Support Allowance or Incapacity Benefit

If you do not need to register, you바카라 사이트檒l still need to keep payroll records.

Payments and deductions

When paying your employees through payroll you also need to make deductions for PAYE.

Payments to your employees

Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay.

Deductions from their pay

From these payments, you바카라 사이트檒l need to deduct tax and National Insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions.

Reporting to and paying HMRC

Reporting pay and deductions

If you run payroll yourself, you바카라 사이트檒l need to report your employees바카라 사이트� payments and deductions to HMRC on or before each payday.

Your payroll software will work out how much tax and National Insurance you owe, including an employer바카라 사이트檚 National Insurance contribution on each employee바카라 사이트檚 earnings above 拢96 a week.

You바카라 사이트檒l need to send another report to claim any reduction on what you owe HMRC, for example for statutory pay.

Paying HMRC

You바카라 사이트檒l be able to view what you owe HMRC, based on your reports. You then have to pay HMRC, usually every month.

If you바카라 사이트檙e a small employer that expects to pay less than 拢1,500 a month, you can arrange to pay quarterly - contact HMRC바카라 사이트檚 payment enquiry helpline.

Other things to report

As part of your regular reports, you should tell HMRC:

You have to run annual reports at the end of the tax year - including telling HMRC about any expenses or benefits.

Choose how to run payroll

If you have to operate PAYE, you can choose how to run your payroll.

View a printable version of the whole guide

Part of Get your business ready to employ staff: step by step

  1. Step 1 Decide what type of employee you need

    1. Check whether you need full time or part time staff
    2. Check the different types of employment status

  2. and Check you can afford to take on employees

    1. Check how much the National Minimum Wage is
    2. Find out how much National Insurance you need to pay for your employees
    3. Check how much sick pay your employees are eligible for
    4. Check how much you need to pay towards your employee's pension
    5. Check how much Maternity Leave you need to pay your employees
    6. Check how much Paternity Leave you need to pay your employees

  3. Step 2 Make your workplace safe and accessible for employees

    1. Prevent discrimination
    2. Make your workplace accessible for employees with disabilities or health conditions
    3. Keep employee information and data safe
    4. Fire safety

    You also need to make checks when you recruit and employ someone.

    1. Find out what you need to check when you employ someone

  4. Step 3 Register as an employer and set up PAYE

    You need to register with HMRC so you can pay tax and national insurance for your employees.

    1. Register as an employer and set up PAYE
    2. Choose how to run payroll
    3. If you decide to run payroll yourself, choose payroll software

  5. Step 4 Check your responsibilities around workplace pensions

  6. Step 5 Get Employers' Liability insurance

    1. Find out about Employers' Liability insurance

  7. Step 6 Recruit and employ staff

    1. Employ someone