Pay PAYE to HMRC

After running payroll, you must pay the tax and National Insurance you have deducted to HMRC. This guide explains when to pay, how to pay, and what to do if you cannot pay on time.

PAYE payment deadlines

When to pay PAYE tax and National Insurance to HMRC.

Employers must pay PAYE tax, National Insurance contributions, student loan deductions, and CIS deductions to HMRC by specific monthly or quarterly deadlines.

Electronic payment deadline: 22nd of the month following the tax month
Cheque payment deadline: 19th of the month following the tax month
Quarterly payment option: Available if average monthly PAYE is under £1,500
Quarterly deadlines (electronic): 22 July, 22 October, 22 January, 22 April
Class 1A NIC deadline: 22 July (electronic) or 19 July (cheque) - for benefits in kind
Class 1B NIC deadline: 22 October (electronic) or 19 October (cheque) - for PSAs

What to pay

Your monthly or quarterly PAYE payment includes:

Income tax: Tax deducted from employee wages
Employee NI: Class 1 employee contributions
Employer NI: Class 1 employer contributions
Student loan deductions: Amounts deducted from employee pay
Less statutory payment recovery: SMP, SPP, etc. you can reclaim
Less Employment Allowance: If eligible and claimed

Payment methods

Direct Debit: Set up variable DD to pay automatically by 22nd
Online banking: Same-day or next-day payments accepted
CHAPS: Same-day transfer (may incur bank fees)
Bacs: Takes 3 working days - plan accordingly
Cheque: Must reach HMRC by 19th (allow postal time)

Pay employers' PAYE

What you owe HMRC

Your monthly or quarterly PAYE bill consists of:

Income tax deducted from employees
Employee National Insurance (Class 1 primary)
Employer National Insurance (Class 1 secondary)
Student loan deductions (if any employees repaying)
Postgraduate loan deductions (if any employees repaying)

Less:

Statutory payment recovery (SMP, SPP, SAP, ShPP, SPBP)
Employment Allowance (up to £10,500 if eligible)
CIS deductions suffered (for construction businesses)

Employment Allowance

Annual NI reduction of up to £10,500 for eligible employers.

Employment Allowance reduces your employer Class 1 National Insurance liability by up to £10,500 per tax year (from April 2025). It is claimed through your payroll software via EPS.

Maximum allowance 2025/26: £10,500 per year
Previous maximum (2022-2025): £5,000 per year
Eligibility change April 2025: No longer restricted to employers with NI liability under £100,000
How to claim: Via Employer Payment Summary (EPS) through payroll software
Claim deadline: By end of tax year (5 April) or up to 4 years retrospectively

Eligibility

You can claim Employment Allowance if:

You are a business or charity with Class 1 NI liability
Your NI liability is NOT wholly for personal, household, or domestic work (e.g., nannies, au pairs)
You are NOT a public body or company where more than 50% is publicly funded
You are NOT a service company where the worker would be subject to IR35 rules

Connected employers

If you are part of a group of connected companies or charities, only one employer in the group can claim Employment Allowance. It is up to the group to decide which employer claims.

Claim Employment Allowance

Quarterly PAYE payment option

When and how small employers can pay PAYE quarterly instead of monthly.

Small employers can pay PAYE to HMRC quarterly instead of monthly if their average monthly PAYE bill is below £1,500.

Eligibility threshold: Average monthly PAYE under £1,500
Quarter 1 (Apr-Jun): Pay by 22 July (electronic) or 19 July (cheque)
Quarter 2 (Jul-Sep): Pay by 22 October (electronic) or 19 October (cheque)
Quarter 3 (Oct-Dec): Pay by 22 January (electronic) or 19 January (cheque)
Quarter 4 (Jan-Mar): Pay by 22 April (electronic) or 19 April (cheque)

How quarterly payments work

Automatic eligibility: HMRC will notify you if you qualify based on your previous year payments
Still submit RTI each payday: You must still submit FPS on or before each payday
EPS still monthly if needed: Submit EPS monthly for claims or no-payment periods
Lose eligibility: If average monthly PAYE exceeds £1,500, you must switch to monthly

When quarterly is NOT available

You must pay monthly if:

Your average monthly PAYE is £1,500 or more
You are a new employer (until you have a full year of payment history)
HMRC has notified you to pay monthly due to late payments

How to pay

HMRC accepts payment through several methods. Allow time for payments to reach HMRC:

Direct Debit: Set up to pay automatically (collected by 22nd)
Online banking: Same-day or next-day (3 working days for Bacs)
CHAPS: Same-day transfer (may incur bank fees)
Debit card online: Same day through HMRC website
At your bank: With payslip booklet
Cheque by post: Must reach HMRC by 19th

Payment reference

Always use the correct reference number when paying:

Accounts Office reference: 13 characters (e.g., 123PA00012345)
Add period: For monthly payments add year and month (e.g., 2601 for January 2026)
Wrong reference: Payment may be allocated incorrectly or lost

PAYE late payment penalty rates

Penalty structure for late PAYE payments to HMRC.

First default in tax year: No penalty (first failure does not count)
Defaults 1-3: 1% of amount late
Defaults 4-6: 2% of amount late
Defaults 7-9: 3% of amount late
Defaults 10+: 4% of amount late
6 months late: Additional 5% penalty
12 months late: Further 5% penalty
Interest: Daily interest charged from due date to payment date

Late payment penalties for PAYE and National Insurance

If you cannot pay on time

If you are struggling to pay:

Contact HMRC early - Before the deadline if possible
Request Time to Pay: HMRC may agree a payment plan
Pay what you can: Partial payment reduces interest charged
Keep filing: Submit FPS and EPS even if you cannot pay

Warning: Directors can be personally liable for unpaid PAYE in certain circumstances.

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Pay PAYE to HMRC

What you owe HMRC

How to pay

Payment reference

If you cannot pay on time

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What you owe HMRC

How to pay

Payment reference

If you cannot pay on time

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