Ongoing payroll tasks
Certain tasks need to be carried out on an ongoing basis
This guidance is only for those operating online Real time Information (RTI). If you are operating paper process RTI, see our paper filing section.
As an employer operating RTI online, you need to complete certain tasks during each tax month. This runs from the 6th of one month to the 5th of the next.
For example, you will need to report your employee's pay and deductions to HMRC in a Full Payment Submission (FPS).
You may also need to use your payroll software to send an Employer Payment Summary (EPS) as well as, or instead of, an FPS.
The FPS is the main submission that must be received by HMRC under RTI.
Once you have used your payroll software to record your employee’s pay, calculate deductions from their pay like tax, National Insurance (NIC) or student loan repayments and calculate any employer’s NIC that you will need to pay on their earnings, you will need to submit this information to HMRC in an FPS (this will be generated and sent by your payroll software).
In addition to pay and deductions information, certain employer information must be reported including the HMRC Office number and PAYE reference number. Information must also be included regarding the employee’s identity such as the employee’s full name, date of birth, address, National Insurance number, payroll ID (if any) and start/leave date (if this is the first/last time you are paying them).
The FPS must contain details in relation to all employees. This includes payments to employees who earn less than the Lower Earnings Limit – £118 per week 2019/20. (Remember that a PAYE scheme is only required to be set up where at least one employee earns at or above the Lower Earnings Limit (or has another job or pension), so if all employees earn below this amount and have no PAYE income from elsewhere, there is no requirement to establish a PAYE scheme.)
Most employers should submit the FPS to HMRC on or before their employees’ pay day (although there are some exceptions to this – see GOV.UK for more information). The FPS includes a special field to identify if an exception applies, using letters codes as provided by HMRC. This may help prevent HMRC from seeking to apply a penalty in respect of the late FPS.
One of the main exceptions is the non-banking day exception. This essentially says that where employees are paid a day early because their regular pay day falls on a non-banking day (for example, weekend or bank holiday), their employer should not use the earlier pay day in the payment date field, but should use the contractual pay date. This is set out clearly in their HMRC’s further Guide to PAYE and NIC CWG2 at paragraph 1.8 where examples are given.
It is important for employers to use the correct date in the payment field, especially where their employees are claiming universal credit, as putting in the wrong date can cause a ‘two monthly wages in one assessment period’ problem for them, as explained further on our main LITRG site.
To complete and send the FPS, follow your payroll software’s instructions. If you need help, HMRC have guidance on what to put in each field on an FPS on GOV.UK.
Users of HMRC’s Basic PAYE Tools (BPT) should check the user guide which contains step-by-step help on the most common functions of BPT, including how to input the relevant FPS data each pay day and how to submit it to HMRC online – note that you will need to enter your Government Gateway User ID and Password at this stage of the process. Actions to take if you receive an error message when submitting payroll information using BPT can be found on GOV.UK.
Please note that there has been some confusion as to the purpose of the ‘Irregular Payment Pattern Indicator’ field and when and how it should be used. HMRC have therefore confirmed the position as follows:
- If an individual is paid irregularly, but is always paid at least once every three months, or is reported on each regular FPS, then you do not need to set the irregular payment indicator.
- If your employee is paid on an irregular basis and is unlikely to be reported on an FPS for three months or more, you need to set the irregular payment indicator to ‘Yes’ on the FPS.
- Unless you set the irregular payment indicator or the appropriate pay frequency field, HMRC will assume that an employee who has not been reported on the FPS for a period of time has left that employment.
Sometime after you have sent your FPS, you should be able to view your submitted FPS and how much you owe to HMRC in your PAYE for Employers online account. Exactly when, will depend on when you send the FPS in. For more information on viewing your online account and what to check if it is not as expected, see GOV.UK. Your payroll software should also show you the payment due to HMRC for any tax month period.
For guidance on what to do if you make a mistake on an FPS, for example, you need to correct and under-reported amount of pay or deductions, see our getting things wrong page.
The amounts recorded on the FPS will be used by HMRC to work out what payments to expect from the employer. But the amount that you actually owe may be affected by matters not mentioned in the FPS such as recovery of statutory payments made to employees (such as statutory maternity pay).
In these situations, an EPS must be created and submitted to inform HMRC of amendments to a liability calculated from the FPS (this will be done by your payroll software). If you have no adjustments to report for any pay period, no EPS is required.
An EPS is also used to claim the employment allowance.
In addition, if an employer does not pay any employees in whole tax month (6th of one month to the 5th of the next) an EPS will need to be submitted to HMRC indicating that no payments have been made. Please note that this is different to the situation where you do not pay your PA for a week say, but you pay them for the rest of the tax month as normal – you do not need to submit an EPS for the unpaid week (it is not really necessary but you could send a ‘nil’ FPS for this purpose if you wanted to).
If you do not file an EPS when you have made no payments at all in a tax month, HMRC may assume that you have simply forgotten to file and may estimate how much you should pay.
You should make sure that you send the EPS by the 19th of the following tax month.
To complete and send the EPS, follow your payroll software’s instructions. If you need help, HMRC has guidance on what to put in each field on an EPS on GOV.UK.
Users of HMRC’s Basic PAYE Tools (BPT) should check the user guide which contains step-by-step help on the most common functions of BPT, including how to tell HMRC that you did not pay any staff wages in a whole tax month – note that you will need to enter your Government Gateway User ID and Password to submit the EPS. Actions to take if you receive an error message when submitting payroll information using BPT can be found on GOV.UK.