PAYE & RTI: What Every UK Employer Must Know

Sep 22, 2025

PAYE & RTI Explained: A Director’s Guide to Payroll Compliance in the UK

Introduction: Understanding PAYE & RTI Compliance

Running payroll is one of the most important responsibilities for UK directors. HMRC requires employers to deduct income tax and National Insurance Contributions (NICs) through the Pay As You Earn (PAYE) system, and to report payments in real time using RTI (Real Time Information).

For many directors, this process can feel unnecessarily complex — but mistakes can result in penalties, late payment interest, and unnecessary HMRC scrutiny. In this guide, we explain PAYE and RTI in plain English, highlight your key responsibilities, and show how expert support can help you stay compliant without stress.

PAYE: The Basics for Employers

What PAYE is: HMRC’s system for collecting Income Tax and NICs from employees’ pay.
Who it applies to: All employers, including limited companies paying directors.
What’s deducted: Income Tax, employee NIC, student loans, and sometimes pension contributions.

PAYE ensures tax is collected as earnings are paid, rather than in a lump sum at year-end.

Real Time Information (RTI): HMRC’s Reporting Standard

RTI requires employers to send HMRC payroll information “on or before” each payday.

Key submissions include:

Full Payment Submission (FPS): Sent every payday showing gross pay, deductions, and NIC.
Employer Payment Summary (EPS): Used to claim statutory payments (e.g., SMP, SSP) or adjustments like Employment Allowance.

Missing RTI deadlines can trigger automatic penalties.

PAYE & RTI Deadlines Employers Must Meet

Monthly PAYE/NIC payments: By the 22nd of the following month (if electronic).
Quarterly payments: Available for smaller employers (if under £1,500 PAYE/NIC per month).
Year-end forms:
- P60 for all employees by 31 May.
- P11D & P11D(b) for benefits by 6 July.
- Class 1A NIC on benefits by 22 July (if electronic).

Common Payroll Mistakes & Penalties

Directors often fall into traps such as:

Missing RTI filing deadlines.
Incorrect tax codes applied.
Forgetting EPS submissions for adjustments.
Late PAYE/NIC payments.

Penalties include:

Late filing fines starting at £100 per month (depending on headcount).
Interest on late payments.
Increased HMRC scrutiny for repeated failures.

How Wexley & Associates Supports Employers

PAYE and RTI compliance can be deceptively complex, particularly for directors balancing multiple obligations. At Wexley & Associates, we help clients:

File RTI submissions accurately and on time.
Avoid penalties by staying on top of deadlines.
Optimise director pay between salary and dividends.
Manage PAYE/NIC obligations without unnecessary admin burden.

Call-to-Action: Keep Payroll Stress-Free

Payroll doesn’t have to be a headache. With the right support, directors can stay compliant, protect their business from penalties, and free up time to focus on growth.

Contact Wexley & Associates today for expert payroll management and tailored PAYE advice.

References

PAYE & RTI Explained: A Director’s Guide to Payroll Compliance in the UK

Introduction: Understanding PAYE & RTI Compliance

PAYE: The Basics for Employers

What PAYE is: HMRC’s system for collecting Income Tax and NICs from employees’ pay.
Who it applies to: All employers, including limited companies paying directors.
What’s deducted: Income Tax, employee NIC, student loans, and sometimes pension contributions.

PAYE ensures tax is collected as earnings are paid, rather than in a lump sum at year-end.

Real Time Information (RTI): HMRC’s Reporting Standard

RTI requires employers to send HMRC payroll information “on or before” each payday.

Key submissions include:

Full Payment Submission (FPS): Sent every payday showing gross pay, deductions, and NIC.
Employer Payment Summary (EPS): Used to claim statutory payments (e.g., SMP, SSP) or adjustments like Employment Allowance.

Missing RTI deadlines can trigger automatic penalties.

PAYE & RTI Deadlines Employers Must Meet

Monthly PAYE/NIC payments: By the 22nd of the following month (if electronic).
Quarterly payments: Available for smaller employers (if under £1,500 PAYE/NIC per month).
Year-end forms:
- P60 for all employees by 31 May.
- P11D & P11D(b) for benefits by 6 July.
- Class 1A NIC on benefits by 22 July (if electronic).

Common Payroll Mistakes & Penalties

Directors often fall into traps such as:

Missing RTI filing deadlines.
Incorrect tax codes applied.
Forgetting EPS submissions for adjustments.
Late PAYE/NIC payments.

Penalties include:

Late filing fines starting at £100 per month (depending on headcount).
Interest on late payments.
Increased HMRC scrutiny for repeated failures.

How Wexley & Associates Supports Employers

PAYE and RTI compliance can be deceptively complex, particularly for directors balancing multiple obligations. At Wexley & Associates, we help clients:

File RTI submissions accurately and on time.
Avoid penalties by staying on top of deadlines.
Optimise director pay between salary and dividends.
Manage PAYE/NIC obligations without unnecessary admin burden.

Call-to-Action: Keep Payroll Stress-Free

Payroll doesn’t have to be a headache. With the right support, directors can stay compliant, protect their business from penalties, and free up time to focus on growth.

Contact Wexley & Associates today for expert payroll management and tailored PAYE advice.

References

PAYE & RTI Explained: A Director’s Guide to Payroll Compliance in the UK

Introduction: Understanding PAYE & RTI Compliance

PAYE: The Basics for Employers

What PAYE is: HMRC’s system for collecting Income Tax and NICs from employees’ pay.
Who it applies to: All employers, including limited companies paying directors.
What’s deducted: Income Tax, employee NIC, student loans, and sometimes pension contributions.

PAYE ensures tax is collected as earnings are paid, rather than in a lump sum at year-end.

Real Time Information (RTI): HMRC’s Reporting Standard

RTI requires employers to send HMRC payroll information “on or before” each payday.

Key submissions include:

Full Payment Submission (FPS): Sent every payday showing gross pay, deductions, and NIC.
Employer Payment Summary (EPS): Used to claim statutory payments (e.g., SMP, SSP) or adjustments like Employment Allowance.

Missing RTI deadlines can trigger automatic penalties.

PAYE & RTI Deadlines Employers Must Meet

Monthly PAYE/NIC payments: By the 22nd of the following month (if electronic).
Quarterly payments: Available for smaller employers (if under £1,500 PAYE/NIC per month).
Year-end forms:
- P60 for all employees by 31 May.
- P11D & P11D(b) for benefits by 6 July.
- Class 1A NIC on benefits by 22 July (if electronic).

Common Payroll Mistakes & Penalties

Directors often fall into traps such as:

Missing RTI filing deadlines.
Incorrect tax codes applied.
Forgetting EPS submissions for adjustments.
Late PAYE/NIC payments.

Penalties include:

Late filing fines starting at £100 per month (depending on headcount).
Interest on late payments.
Increased HMRC scrutiny for repeated failures.

How Wexley & Associates Supports Employers

PAYE and RTI compliance can be deceptively complex, particularly for directors balancing multiple obligations. At Wexley & Associates, we help clients:

File RTI submissions accurately and on time.
Avoid penalties by staying on top of deadlines.
Optimise director pay between salary and dividends.
Manage PAYE/NIC obligations without unnecessary admin burden.

Call-to-Action: Keep Payroll Stress-Free

Payroll doesn’t have to be a headache. With the right support, directors can stay compliant, protect their business from penalties, and free up time to focus on growth.

Contact Wexley & Associates today for expert payroll management and tailored PAYE advice.