What are PAYE and Real Time Information (RTI)?
PAYE, Pay As You Earn, is the UK system under which employers deduct income tax and National Insurance from employees' pay and pass it to HM Revenue and Customs. Real Time Information (RTI) is the way they report it: payroll software sends a Full Payment Submission on or before each payday, listing every employee's pay and deductions.
Also calledPay As You EarnReal Time InformationRTIFPSEPS
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- FPS due
- On or before payday
- PAYE payment
- By the 22nd of next tax month
- Country
- United Kingdom
How PAYE and RTI work
Each employee has a tax code that tells payroll how much tax-free pay to allow. Every pay run, payroll software calculates income tax, employee and employer National Insurance, student loan deductions and pension contributions, then sends a Full Payment Submission (FPS) with the details for each employee, on or before payday, even if the employer pays quarterly. An Employer Payment Summary (EPS), due by the 19th of the following tax month, reports reductions such as recovered statutory pay or the Employment Allowance, or tells the tax authority no employees were paid. The employer pays the PAYE due by the 22nd of the following tax month when paying electronically. RTI replaced annual year-end returns in 2013, so the tax authority sees pay as it happens and uses it for tax codes and benefits. Payroll software and bureaux file RTI submissions directly.
Common questions
What is a Full Payment Submission?+
The RTI report payroll software sends each pay run, giving every employee's pay, tax, National Insurance and other deductions. It must be sent on or before the date employees are paid.
What is an Employer Payment Summary?+
A monthly RTI report, due by the 19th of the next tax month, used to report reductions in what the employer owes, such as statutory pay recovered, or to confirm that no employees were paid.
What happens if an FPS is late?+
Employers can be charged late filing penalties based on the number of employees, and late payment penalties and interest if the PAYE itself is paid late.
Payroll software that files RTI
Part of Accountio’s accounting technology coverage · Glossary
