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Pay As You Earn

Updating author: Vince Ashall

Summary

  • Employers are required to deduct income tax and national insurance contributions (NICs) where they operate a PAYE scheme for one or more employees. (See The PAYE system)
  • Employers must send the income tax and NICs that they collect, along with employer NICs, to HM Revenue and Customs, within certain time limits. (See Payment of tax and national insurance)
  • Employers may be able to claim the employment allowance to offset against their Class 1 NICs. (See Employment allowance)
  • Some employers must pay the apprenticeship levy via the PAYE system. (See Apprenticeship levy)
  • Leavers should be provided with a P45 showing their total tax and pay figures to date. (See Leavers and new employees)
  • All employees in employment on 5 April should be given a form P60 at the end of the tax year. (See The end of the tax year)
  • Real time information is the normal method of reporting deductions and requires employers to report deductions prior to, or at the time of, paying staff. (See Real time information)
  • Employees may be entitled to child tax credit or working tax credit paid direct to claimants by HM Revenue and Customs. (See Tax credits)
  • Employees can make donations before taxable pay is calculated to their nominated charities through the Payroll Giving Scheme. (See Payroll giving)

Sector resources

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