The Pay As You Earn (PAYE) system is the way by which an employer makes certain deductions from employees. These include deductions for the employees liability to income tax and national insurance contributions (NICs), as well as other deductions such as student loan repayments.
PAYE is a system for collecting income tax and NIC from employees on a regular basis rather than relying on every individual having to complete a tax return in order to inform HMRC of their liability.