Payroll operations

Correct PAYE errors

How to fix mistakes in your payroll submissions and HMRC records.

UK-wide
Guide summary

Fix PAYE errors quickly to avoid penalties. Update your payroll records and submit corrected information to HMRC. For current year errors, correct within 14 days of the tax month end. For previous years, submit a further FPS with corrected figures.

  • Correct current year errors within 14 days of tax month end
  • Submit a further FPS with corrected year-to-date figures
  • Use correct reason codes when updating submissions
  • Final deadline for corrections is 19 April after tax year end
  • For previous years (2020/21 onwards), submit further FPS not EYU
  • Issue corrected P60 if employee's figures change
  • Refund overpaid tax through payroll or HMRC claim
  • Collect underpayments via future pay or tax code change
  • Maximum £3,000 per year can be collected through tax code
  • Keep records for 6 years
On this page
UK-wide

Related guides in Tax & Finance

Pay PAYE to HMRC

How and when to pay your PAYE tax and National Insurance to HMRC.

Payroll errors happen. Whether you have used the wrong tax code, miscalculated pay, or submitted incorrect information to HMRC, this guide explains how to put things right.

Types of PAYE errors

  • Wrong tax code used: Employee over or under-taxed
  • Incorrect pay reported: Wrong gross or net pay on FPS
  • Missing employee: Employee not included on FPS
  • Wrong NI category: Incorrect National Insurance calculated
  • Duplicate submission: Same employee reported twice
  • Wrong payment date: FPS shows incorrect payday

Correcting errors in the current tax year

For errors discovered in the current tax year:

  1. Correct your payroll records: Update employee file with correct information
  2. Submit corrected FPS: Include year-to-date corrected figures
  3. Within 14 days: Corrections within 14 days of month end counted in that month
  4. Late reporting reason: Select appropriate reason code (e.g., H - Correction to earlier submission)
Current year corrections
Submit additional FPS with corrected year-to-date figures
Correction window
14 days after tax month end to count in same month
Final deadline
19 April following tax year end
Previous year corrections
Submit further FPS (not EYU) for 2020/21 onwards

Correcting previous tax years

For tax years 2020/21 onwards, submit a further Full Payment Submission (FPS) with corrected year-to-date figures for the previous year.

Note: The Earlier Year Update (EYU) is no longer used for corrections from 2020/21 onwards.

Employee refunds and underpayments

If employee overpaid tax:

  • Refund through payroll in next pay period
  • Or employee can claim directly from HMRC after tax year end

If employee underpaid tax:

  • Collect underpayment through future pay (with employee agreement)
  • HMRC may adjust their tax code to collect
  • Maximum collection through code change: £3,000 per year