Run payroll and submit RTI

Guide summary

Record everyone you pay, including people who earn too little to pay tax or National Insurance
Send a Full Payment Submission even if you pay HMRC quarterly
Send a corrected Full Payment Submission as soon as possible if you find a mistake
Send a Full Payment Submission after payday only in situations HMRC lists, and put the reason on it
Do not stop student loan deductions because the employee asks; stop only on an SL2 or PGL2 notice
Late Full Payment Submission penalties run from £100 to £400 a month, depending on your number of employees
Send an Employer Payment Summary by the 19th after the tax month ends
Keep most payroll records for 3 years from the end of the tax year they relate to

These rules apply across the UK.

Every time you pay your employees, you record their pay, work out the deductions and report both to HMRC through Real Time Information (RTI). A pay run goes in this order:

Update your payroll records for starters, leavers and changes to pay.
Work out pay and deductions in your payroll software.
Produce payslips and check them.
Send the Full Payment Submission to HMRC on or before payday.
Pay your employees on payday.

Before the pay run

Update your payroll records for anything that has changed since the last run, such as starters and leavers, changes to pay, hours worked, overtime and other variable pay. Add any statutory sick pay or statutory parental pay that is due.

Record everyone you pay, including people who earn too little to pay tax or National Insurance. Treat bonuses, commission and holiday pay as normal pay. Do the same with tips paid into your till, including tips added to card payments.

Check that each employee's tax code and National Insurance category letter are up to date, because your software works out their tax and National Insurance from them.

Work out pay and deductions

Your software calculates the income tax and National Insurance to deduct, and your own employer's National Insurance on earnings above the secondary threshold. You may also need to deduct student loan repayments, pension contributions, Payroll Giving donations and child maintenance. Take pension deductions after National Insurance. They normally come off before tax, but check with your pension provider.

Student loan deductions depend on the employee's plan.

Student loan repayment thresholds

Deduction rates and annual thresholds for each student loan plan and the postgraduate loan, with who each plan covers and when deductions start and stop.

Employers deduct student loan repayments from an employee's earnings above the threshold for their plan. Use the same gross pay as for employer's secondary Class 1 National Insurance contributions. The thresholds below apply from April 2026.

Plan 1 threshold: £26,900 a year (£2,241.66 a month, £517.30 a week)
Plan 1 covers: Courses starting before 1 September 2012 (England and Wales); all Northern Ireland loans
Plan 2 threshold: £29,385 a year (£2,448.75 a month, £565.09 a week)
Plan 2 covers: England: courses starting 1 September 2012 to 31 July 2023; Wales: courses starting on or after 1 September 2012
Plan 4 threshold: £33,795 a year (£2,816.25 a month, £649.90 a week)
Plan 4 covers: Scottish loans (Student Awards Agency Scotland)
Plan 5 threshold: £25,000 a year (£2,083.33 a month, £480.76 a week)
Plan 5 covers: England: courses starting on or after 1 August 2023
Postgraduate loan threshold: £21,000 a year (£1,750 a month, £403.84 a week)
Postgraduate loan covers: Master's and doctoral loans

How deductions work

Plans 1, 2, 4 and 5: 9% of earnings above the threshold.
Postgraduate loan: 6% of earnings above the threshold.
An employee can repay a plan loan and a postgraduate loan at the same time.
If an employee has more than one plan, start with the plan that has the lowest threshold until you get a start notice (SL1).
If an employee cannot tell you their plan, use Plan 5 until you get an SL1; this default applies only where the loan is Plan 1, 2 or 4.

Starting deductions

Start from the next available payday when any of these applies:

The employee's P45 shows deductions should continue.
The employee tells you they have a loan, or a starter checklist shows a student or postgraduate loan.
HMRC sends an SL1 (student loan) or PGL1 (postgraduate loan) start notice.
HMRC sends a reminder through the generic notification service.

Do not make deductions in arrears.

Stopping deductions

Stop from the first available payday after the stop date when HMRC sends an SL2 or PGL2 stop notice, or tells you in writing. You cannot stop because the employee asks you to; they should ask HMRC or the Student Loans Company for a refund if they think they have overpaid.

Student loan and postgraduate loan repayment guidance for employers (opens in a new tab)

Student loan deduction tables (SL3) (opens in a new tab)

Give each employee and worker a payslip on or before payday. It must show gross pay, the deductions, net pay and, where pay varies with the time worked, the hours worked.

Send the Full Payment Submission on or before payday

Full Payment Submission (FPS) requirements

When and how to submit Full Payment Submissions to HMRC under Real Time Information.

A Full Payment Submission (FPS) is the main RTI report that employers send to HMRC on or before each payday. It reports what you have paid each employee and the deductions you have made.

When to submit: On or before each payday, even if you pay HMRC quarterly
Payday date to enter: Your usual payday, even if you pay earlier or later
Who to include: Everyone you pay, even if they earn less than £96 a week
Late submission: No penalty if every reported payment is within 3 days of payday
Final FPS of the tax year: On or before the last payday of the tax year (5 April)
Earliest for a new tax year: Not before March
Mistakes: Send a corrected FPS as soon as possible

What an FPS contains

Employer information, including your PAYE reference and Accounts Office reference
Employee information for the people you have paid
Pay and deductions, including tax, National Insurance and student loan repayments
National Insurance information

You also report extra information when an FPS includes a new employee, an employee leaves, you start paying someone a workplace pension, an employee changes address, or it is the last report of the tax year.

Reporting after payday

You can send an FPS after payday only in the situations HMRC lists, such as an ad hoc payment outside your regular payroll or a payday that falls on a non-banking day. Put the reason on the FPS, or HMRC may send a penalty warning and a penalty.

Running payroll: reporting to HMRC (FPS) (opens in a new tab)

If your software has a 'Final submission for year' field, enter 'Yes' on the last FPS of the tax year.

If you report late

RTI late submission penalties

Penalties for late or non-filing of FPS and EPS submissions.

HMRC charges a monthly penalty when a Full Payment Submission (FPS) is late, or when you do not send the expected number of FPSs or an Employer Payment Summary (EPS) for a month in which you paid nobody. The amount depends on how many employees you have, and HMRC sends penalty notices every quarter.

1 to 9 employees: £100 a month
10 to 49 employees: £200 a month
50 to 249 employees: £300 a month
250 or more employees: £400 a month
3-day rule: No penalty if every reported payment is within 3 days of payday
New employer: No penalty if the first FPS is sent within 30 days of paying an employee
First failure in a tax year: No penalty (annual schemes excepted)
Several PAYE schemes: Penalties can be charged for each scheme

When no penalty is charged

The FPS is late but all reported payments are within 3 days of payday, although employers who regularly file late may be contacted or considered for a penalty
You are a new employer and sent your first FPS within 30 days of paying an employee
It is your first failure in the tax year to send a report on time, unless you are an annual scheme
You sent an EPS to say you paid no employees in the month

Specified charges and appeals

If you do not send an FPS or the EPS, HMRC may raise a specified charge based on an estimate of what you should pay. Only sending the missing report replaces the charge with the amount actually due. You pay no interest on a penalty if you pay it within 30 days of the notice. You can appeal if the penalty is not due, the amount is wrong, or you had a reasonable excuse.

What happens if you do not report payroll information on time (opens in a new tab)

After the pay run

From the 10th of the next tax month you can see what you owe from your FPS in your HMRC online account. Tax months run from the 6th of one month to the 5th of the next.

PAYE payment deadlines

When to pay PAYE tax and National Insurance to HMRC.

You pay your PAYE bill to HMRC by the 22nd of the next tax month, or by the 22nd after the end of the quarter if you pay quarterly. A cheque must reach HMRC by the 19th. HMRC charges interest on late payments and may charge a penalty.

Monthly payment: By the 22nd of the next tax month; for the tax month 6 April to 5 May, by 22 May
Monthly payment by cheque: Must reach HMRC by the 19th
Quarterly payment: 22 July, 22 October, 22 January and 22 April (19th by cheque)
Quarterly option: Usually pay less than £1,500 a month
Class 1A National Insurance on benefits: 22 July after the tax year (19 July by cheque)
Class 1B National Insurance on a PAYE Settlement Agreement: 22 October after the tax year (19 October by cheque)
What your bill includes: Income Tax, Class 1 and 1B National Insurance, Class 1A on termination awards and sporting testimonials, student loan repayments, Construction Industry Scheme deductions and the Apprenticeship Levy, less reductions claimed on your EPS

Pay employers' PAYE (opens in a new tab)

Keep your payroll records

PAYE records retention periods

How long employers must keep PAYE and payroll records.

Standard retention period: 3 years from the end of the tax year they relate to
Records covered: Pay and deductions, reports to HMRC, payments to HMRC, leave and sickness absence, tax code notices, taxable expenses and benefits, Payroll Giving Scheme documents
Statutory Maternity Pay records: 3 years after the end of the tax year in which the maternity pay period ends
Other records: Different rules apply to records proving National Minimum Wage, statutory leave and holiday pay

When to send an Employer Payment Summary

Employer Payment Summary (EPS) requirements

When and how to submit Employer Payment Summaries to HMRC.

An Employer Payment Summary (EPS) is sent in addition to an FPS to claim reductions from your PAYE bill, or instead of an FPS in a tax month when you paid nobody.

Deadline: By the 19th after the tax month ends
Balance shown in your online account: Within 2 days, or by the 14th if sent before the 11th
No employees paid in the month: Send an EPS instead of an FPS
Period of inactivity: Tell HMRC in advance of 1 to 12 months with no payments

When to send an EPS as well as an FPS

You reclaim statutory maternity, paternity, adoption, neonatal care, parental bereavement or shared parental payments, even if HMRC advanced you the money
You claim Employment Allowance, once each tax year
You are a limited company reclaiming Construction Industry Scheme deductions
You pay the Apprenticeship Levy because you, or employers you are connected to, have an annual pay bill of more than £3 million

Send an EPS instead of an FPS if you paid nobody in a tax month.

If you do not send an EPS for a month with no payments

HMRC may send you a notice through PAYE Online, estimate how much you should pay and charge a penalty.

Running payroll: reporting to HMRC (EPS) (opens in a new tab)

Legal basis

Primary legislation and key regulations

Income Tax (Earnings and Pensions) Act 2003 Primary 2003 · UK-wide Teaching and Higher Education Act 1998 Primary 1998 · UK-wide SSCBA 1992 Primary 1992 · UK-wide Taxes Management Act 1970 Primary 1970 · UK-wide The Income Tax (Pay As You Earn) Regulations 2003 SI 2003 · UK-wide The Statutory Maternity Pay (General) Regulations 1986 SI 1986 · UK-wide

Browse UK legislation legislation.gov.uk

Official guidance

GOV.UK - Payroll: annual reporting and tasks (opens in a new tab)

GOV.UK

Running payroll (opens in a new tab)

HMRC

What happens if you do not report payroll information on time (opens in a new tab)

HMRC

Run payroll and submit RTI

Before the pay run

Work out pay and deductions

Send the Full Payment Submission on or before payday

If you report late

After the pay run

Keep your payroll records

When to send an Employer Payment Summary

Legal basis

Official guidance

Next steps

Growing your business

Start importing goods to the UK

Transfer ownership of your business

Related guides in Tax & Finance

Understand PAYE tax codes

Pay PAYE to HMRC

What a payslip must show

PAYE year-end tasks

Correct PAYE errors