As an employer, you normally have to operate PAYE as part of your payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment.
When paying your employees through payroll you also need to make deductions for PAYE.
Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay.
From these payments, you’ll need to deduct tax and National Insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions.
Reporting pay and deductions
If you run payroll yourself, you’ll need to report your employees’ payments and deductions to HMRC on or before each payday.
If you’re a small employer that expects to pay less than £1,500 a month, you can arrange to pay quarterly.