PAYE basics - Register a Company UK

Employer's responsibility for PAYE

If you employ people, including any directors of a limited company, you will need to deduct income tax and National Insurance contributions (NICs) from their pay before they receive it.

As an employer, you need to know how to calculate the correct income tax deductions, taking account of the various rates, allowances and limits that exist. For more information, see our section on your tax bill, payments, deadlines, corrections and refunds.

Payments to HMRC

By the 19th of each month - or, if you make electronic payments, by the 22nd of each month - you must ensure that the most recent amounts you have deducted from all your employees' pay has reached HM Revenue & Customs (HMRC).

If your average monthly payments are likely to be less than £1,500 you may be able to pay them quarterly.

If you pay too little or too late, you may incur interest on these amounts and/or have to pay a fine.

Download the employer further guide to PAYE and NICs from the HMRC website (PDF, 517K) - Opens in a new window.

Taxation of benefits-in-kind

Employees and directors are also taxed on benefits in kind, such as a company car or medical insurance.

As an employer you will have to pay Class 1A NICs on such benefits. However, you do not have to pay these contributions under the PAYE (Pay As You Earn) system - you do so at the year end.

See our section on expenses and benefits for employers.

Filing PAYE returns

You can manage your PAYE online using PAYE Online for Employers. Once registered, you can complete form P11D using either third-party software or the free HMRC Online Return & Forms - PAYE product.

Alternatively, you can download form P11D from the HMRC website (PDF, 149K) - Opens in a new window and make a paper return.

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