Ongoing Payroll Tasks
Certain tasks need to be carried out on an ongoing basis
This guidance is only for those operating online RTI. If you are operating a manual payroll system (paper) 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, a FPS.
The FPS is the main submission that must be received by HMRC under RTI and is generated by the payroll software used by the employer.
Once you have used your payroll software to record your employee’s pay, calculate deductions from their pay, like tax and National Insurance and calculate any employer’s National Insurance contributions (NIC) that you will need to pay on their earnings, you will need to report this information to HMRC in a FPS.
In addition to pay, tax and NIC information, certain employer information must be reported including the HMRC Office number and PAYE reference number. Information must also be included regarding employee identity such as the employee’s full name, date of birth, address, National Insurance number, payroll ID (if any).
The FPS must contain details in relation to all employees. This includes payments to employees who earn less than the lower earnings limit. (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 send the FPS 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 as provided by HMRC. This prevents HMRC seeking to apply penalties in respect of the late FPS.
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 which can be accessed from the GOV.UK website.
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, including the following:
- 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 Full Payment Summary (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 tax and National Insurance you owe in your online account.
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 the employer actually owes 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. If the employer has 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 a tax month an EPS will need to be submitted rather than an FPS, indicating that no payments have been made (although some software may send a ‘nil’ FPS rather than an EPS for this purpose).
If you do not file an EPS when you have made no payments at all, 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 which can be accessed from GOV.UK.