Reporting PAYE in real time
"Real time information" (RTI) is a system of payroll reporting which sees employers having to report payroll data to HM Revenue & Customs (HMRC) on or before their employees pay day.
What is RTI?
Why was RTI introduced?
Universal Credit/tax credits and RTI
Where can I get further help?
As explained in our filing options section, under Real Time Information (RTI), most employers and pension providers tell HM Revenue and Customs (HMRC) about an employee’s pay and deductions ‘on or before’ the time the employee is paid (be that weekly, monthly or otherwise), rather than after the end of the tax year, which is what happened before 6 April 2013.
The information is submitted automatically to HMRC online via payroll software – our ‘RTI software’ section tells you more about the software (some of which is free) that is available to run your payroll, and which is suitable for RTI.
The main submissions that you make to HMRC under RTI using your payroll software are:
Full Payment Summary (FPS)
You report your payroll information by sending Full Payment Submissions. An FPS tells HMRC the amount of tax and National Insurance contributions (NICs) that you have deducted from your employees' pay. This is the amount HMRC will expect you to pay in full on the normal monthly/quarterly due date.
Employer Payment Summary (EPS)
Some employers are able to submit their RTI information on paper rather than online. See our paper filing section for more details about who qualifies for paper filing.
HMRC introduced RTI in order to modernise the Pay As You Earn (PAYE) system. RTI should improve the way the PAYE system works for both employers and employees in light of modern working patterns (people having more than one job, changing jobs frequently, etc).
For example, for employers, it should simplify the process when an employee starts or leaves and the end of year reporting requirement as this information is included as part of the regular RTI submission rather than sent in separately. For employees, it should mean that HMRC have more up to date information about them, which should ultimately improve the accuracy of tax collected throughout the tax year. It will also help support the introduction of Universal Credit – see below.
RTI was not only introduced to improve the operation of PAYE but also to support Universal Credit.
Universal Credit is a new benefit that will eventually replace the following existing benefits:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income support
- Child tax credit
- Working tax credit
- Housing benefit.
Universal Credit payments will be calculated by the Department for Work and Pensions (DWP) using information provided by HMRC from the RTI PAYE reporting system where possible.
In addition, as the changeover to Universal Credit will not be complete for some time, HMRC may use the information you provide on your PAYE submissions to calculate and pay any tax credits your employees are entitled to in the meantime. You can find out more about RTI and tax credits on our sister site RevenueBenefits.
If you, as their employer, report the information late to HMRC or send in wrong information, it could therefore affect the amount of Universal Credit or tax credits your employee receives.
The rest of this section of the site guides you through the main RTI processes. Use the links below to see more detailed information.
For information on penalties under RTI, for example for not doing payroll tasks at the correct time, or not doing them accurately, go to our getting things wrong section.