PAYE

PAYE means Pay As You Earn. It’s the system employers use to take Income Tax and National Insurance from employees’ pay before they get it

Any employer who pays staff including part-time or casual workers must use PAYE if the employee earns at or above the tax or NI threshold

• Each time you pay an employee, you:
  • Work out their pay
  • Take off tax and National Insurance
  • Report it to HMRC through payroll software
  • Then pay the deductions to HMRC

You usually pay monthly, by the 22nd of the next month (or the 19th if paying by post). Smaller employers can sometimes pay quarterly