PAYE Deadlines & Employer Tax Obligations: Complete UK Guide 2026/27

Introduction

For every UK employer, PAYE — Pay As You Earn — is the mechanism through which Income Tax and National Insurance Contributions (NICs) are collected from employees and paid to HMRC. Getting PAYE right is not optional: late payments, missed submissions, and incorrect filings can all result in financial penalties and unwanted attention from HMRC.

The 2026/27 tax year brings no let-up in the obligations facing employers. The employer NIC rate remains at 15% — the rate introduced from April 2025 — and the Employment Allowance stays at £10,500 per year. Understanding your deadlines, your RTI submission requirements, and your year-end obligations is essential to running a compliant payroll.

This guide covers every key aspect of PAYE for UK employers in 2026/27: monthly and quarterly payment deadlines, Real Time Information (RTI) submissions, employer NIC rates, Employment Allowance, P60 and P11D obligations, late payment penalties, and an overview of the Construction Industry Scheme. Whether you are a new employer or running a growing business, this is your complete reference.

What Is PAYE?

PAYE is HMRC's system for collecting Income Tax and National Insurance Contributions from employees as they earn, rather than requiring them to settle a lump sum at the end of the year. As an employer, you are responsible for operating the PAYE system correctly for all employees who are paid above the Lower Earnings Limit (£6,500 per year for 2026/27).

What Employers Must Deduct

• Income Tax: Deducted from employee pay using their tax code, which HMRC issues based on personal allowances and other income adjustments
• Employee National Insurance Contributions: Deducted at 8% on earnings between the Primary Threshold (£12,570 per year) and the Upper Earnings Limit (£50,270 per year), and at 2% on earnings above that
• Student Loan repayments: Deducted for employees repaying student loans under Plan 1, Plan 2, Plan 4, or the Postgraduate Loan, depending on their circumstances

What Employers Must Pay

In addition to remitting the deductions made from employee pay, employers must pay their own employer National Insurance Contributions on top of the gross wages they pay. For 2026/27, this is 15% of each employee's earnings above the Secondary Threshold of £5,000 per year. This is a cost to the employer — it does not come out of the employee's pay.

PAYE Monthly Deadlines

Most employers pay PAYE monthly. The tax month runs from the 6th of one calendar month to the 5th of the next — so the tax month for May 2026 runs from 6 May to 5 June 2026, for example.

Payment must reach HMRC by:

• 22nd of the following month — if paying electronically (Faster Payments, BACS, or CHAPS)
• 19th of the following month — if paying by cheque through the post

For example, for the tax month ending 5 June 2026, your electronic PAYE payment must clear HMRC's account by 22 June 2026. If a deadline falls on a weekend or bank holiday, you must ensure payment clears on the last working day before that date — HMRC will not accept a late payment simply because the deadline fell on a non-working day.

Key PAYE Dates for 2026/27

Note: dates shown as 19/22 mean 19th for postal cheques and 22nd for electronic payments.

Real Time Information (RTI) Submissions

Real Time Information (RTI) is the system HMRC uses to receive payroll information from employers. Under RTI, you must report pay and deductions to HMRC on or before each payday — not at the end of the month or tax year. There are two main types of submission:

Full Payment Submission (FPS)

An FPS must be submitted every time you pay an employee. It tells HMRC:

• Employee details (name, NI number, payroll ID)
• Gross pay for the period
• Income Tax deducted
• Employee and employer NIC
• Student loan deductions
• Statutory payments (e.g. Statutory Maternity Pay, Statutory Sick Pay)
• Year-to-date totals

The FPS must be submitted on or before the date on which you pay your employees. If you pay weekly, you submit a weekly FPS. If you pay monthly, you submit a monthly FPS. There is no grace period — an FPS submitted even one day late can trigger a penalty notice.

Employer Payment Summary (EPS)

An EPS is submitted separately from the FPS and is used to make adjustments to what HMRC expects you to pay. You would submit an EPS to:

• Claim Employment Allowance at the start of the tax year
• Recover statutory payments (e.g. the employer portion of Statutory Maternity Pay you have reclaimed)
• Report CIS deductions suffered (for contractors in the Construction Industry Scheme)
• Notify HMRC of a period during which no employees were paid (a nil return)
• Report that your PAYE scheme is no longer active (a final submission)

An EPS must be submitted by the 19th of the following tax month to affect the current month's liability.

RTI Penalties

HMRC charges automatic penalties for late or missing FPS submissions. The penalty amounts depend on the number of employees in your scheme:

There is generally a one-month grace period for new employers in their first year. After that, penalties are automatic for any month in which an FPS is not received on time. An additional penalty of 5% of the tax and NIC that should have been reported applies if submissions are more than three months late.

Employer NIC Rates for 2026/27

One of the most significant changes affecting UK employers in recent years was the increase in employer National Insurance Contributions that took effect from 6 April 2025. These rates continue unchanged into 2026/27.

2026/27 Employer NIC Summary

Worked Example

An employee earns £30,000 per year. Employer NIC is calculated on earnings above the Secondary Threshold of £5,000:

• Earnings above ST: £30,000 – £5,000 = £25,000
• Employer NIC: £25,000 × 15% = £3,750 per year

Under the old rate (13.8% on earnings above £9,100), the same employer would have paid: (£30,000 – £9,100) × 13.8% = £2,884.20. The 2026/27 rules cost the employer an extra £865.80 per year for this employee alone.

Other Employer NIC Rates

Different employer NIC rates apply in certain circumstances:

• 0% employer NIC: Applies to employees aged under 21 on earnings up to the Upper Secondary Threshold (£50,270 per year); also applies to apprentices under 25 on earnings up to the Apprentice Upper Secondary Threshold (£50,270 per year)
• Freeport and Investment Zone relief: Employers operating in designated Freeport or Investment Zone tax sites may be eligible for 0% employer NIC on the earnings of qualifying employees up to the relevant secondary threshold for those zones
• Veterans relief: 0% employer NIC applies in the first year of a qualifying veteran's first civilian employment after leaving the armed forces, on earnings up to the Upper Secondary Threshold

Employment Allowance 2026

Employment Allowance is a relief that allows eligible employers to reduce their employer NIC liability by up to £10,500 per tax year for 2026/27. It was increased from £5,000 to £10,500 in April 2025, partly to offset the impact of the employer NIC rate increase for smaller businesses.

Who Can Claim Employment Allowance

• Businesses and charities that pay employer NIC
• Employers whose total employer NIC bill in the previous tax year was less than £100,000

Who Cannot Claim Employment Allowance

• Single-director companies with no other employees: If the only person on the payroll is a director, Employment Allowance is not available — even if the director receives a salary
• Employers with a total employer NIC bill over £100,000 in the prior tax year
• Public bodies: Employers classed as public authorities under the Employment Allowance rules
• Domestic employers: Those who only employ someone for personal or household work (e.g. a cleaner or nanny), unless the employee is a care or support worker

How to Claim Employment Allowance

Employment Allowance is claimed by submitting an Employer Payment Summary (EPS) through your payroll software at the start of the tax year. You must claim it each year — it does not carry over automatically. Once claimed, the allowance is offset against your employer NIC liability each month until the full £10,500 has been used, or the tax year ends.

Year-End Employer Obligations

The end of the tax year on 5 April triggers a series of deadlines that employers must meet. Here is a summary of the key year-end obligations for the 2025/26 tax year (which ended 5 April 2026) and for the 2026/27 tax year:

Final Full Payment Submission

Your final FPS for the tax year must include an indicator marking it as the last submission for that year. This tells HMRC that the payroll year has ended and allows them to reconcile the year's figures. If you make an error in your final FPS, you can correct it using an additional FPS or, in some cases, an Earlier Year Update (EYU).

P60 — By 31 May

You must provide a P60 to every employee who is still employed by you on the last day of the tax year (5 April). The P60 summarises the employee's total pay and deductions for the year. The deadline is 31 May — so for the 2025/26 tax year, P60s must be issued by 31 May 2026.

• P60s can be provided electronically (if the employee has agreed to receive them in this way) or as a paper form
• You do not send P60s to HMRC — they are for the employee only
• Employees need their P60 to complete a Self Assessment tax return, apply for tax credits, or claim back overpaid tax

P45 — When an Employee Leaves

A P45 must be given to any employee who leaves your employment. It shows the employee's total pay and tax deducted for the tax year up to their leaving date. The P45 is used by the employee's next employer to set up their tax code correctly, and also by HMRC to update the employee's tax record.

P11D and Benefits in Kind

If you provide employees with benefits or expenses that are not covered by a PAYE Settlement Agreement (PSA) and are not payrolled, you must report them to HMRC using P11D forms. Benefits in kind (BiKs) are non-cash perks provided to employees or their families that have a taxable value.

Common Examples of Benefits in Kind

• Company cars and vans
• Private medical or dental insurance
• Beneficial loans (loans at below-market interest rates)
• Living accommodation provided by the employer
• Non-business travel and entertainment expenses
• Assets transferred to an employee at below market value

P11D Deadlines

Class 1A National Insurance

Employers pay Class 1A NIC at 15% on the value of most benefits in kind reported on P11D forms. This is charged at the employer NIC rate (15% for 2026/27) and is paid in a single annual payment — unlike regular employer NIC, which is paid monthly or quarterly. Class 1A NIC is not deducted from employees; it is an additional cost to the employer.

Payrolling Benefits

As an alternative to P11D reporting, employers can elect to payroll most benefits in kind. This means the taxable value of the benefit is added to the employee's gross pay each month, and tax is collected through PAYE in real time. Payrolling eliminates the need to submit P11D forms for payrolled benefits and gives employees a more accurate tax position throughout the year. You must register to payroll benefits before the start of the tax year through HMRC's online service.

PAYE Late Payment Penalties

HMRC charges automatic penalties when PAYE payments are made late. The penalty regime is percentage-based and escalates the more frequently you pay late within a single tax year.

In-Year Late Payment Penalties

These penalties are applied to the total amount that was paid late across all late payments in the year — not just to the most recent one. HMRC generally does not charge a penalty for a first, minor late payment, but repeated late payments will attract the full penalty regime.

Interest on Late Payments

In addition to the percentage penalty, HMRC charges interest on overdue PAYE from the date the payment was due to the date it is received. The interest rate is the Bank of England base rate plus 2.5%. Interest is charged daily and there is no de minimis threshold — it applies to any amount outstanding after the deadline.

Payments Not Made at All

If PAYE is not paid at all by 6 April following the end of the tax year, HMRC charges an additional penalty of 5% of the amount outstanding. A further 5% penalty applies if the amount remains unpaid after six months, and again at twelve months.

Quarterly PAYE for Smaller Employers

Smaller employers whose average monthly PAYE and NIC liability (including student loan deductions) is less than £1,500 per month may be eligible to pay PAYE quarterly rather than monthly. This can simplify cash flow management for small businesses.

Quarterly Payment Deadlines

The four PAYE quarters and their payment deadlines are:

Important: RTI Obligations Still Apply

Paying quarterly does not change your RTI obligations. You must still submit a Full Payment Submission (FPS) on or before each payday, regardless of whether you pay PAYE monthly or quarterly. Quarterly payment is purely a cash payment arrangement — the reporting requirements remain the same.

HMRC will usually notify you if you are eligible for quarterly payment. If you believe you qualify and have not been notified, you can contact HMRC's Employer Helpline to request quarterly payment status. If your average monthly liability rises above £1,500, you will need to revert to monthly payments.

Construction Industry Scheme (CIS) Overview

The Construction Industry Scheme (CIS) is a separate tax regime that applies to businesses in the construction sector. If you are a contractor who pays subcontractors for construction work, you are required to operate CIS alongside (or instead of) PAYE for those workers.

How CIS Works

• Contractors must register for CIS with HMRC before taking on subcontractors
• Before making any payment to a subcontractor, the contractor must verify the subcontractor with HMRC to determine their deduction rate
• Contractors deduct tax at either 20% (for registered subcontractors) or 30% (for unregistered subcontractors) from the labour portion of the subcontractor's invoice
• Contractors with gross payment status have deductions made at 0% — they receive payments gross and settle their own tax

CIS Monthly Returns

Contractors must submit a monthly CIS return to HMRC by the 19th of each month, reporting all payments made to subcontractors in the previous tax month. This return confirms the deductions made and is submitted through HMRC's online system or payroll software.

CIS deductions made are paid to HMRC as part of the contractor's overall PAYE payment — the CIS deductions are offset against the contractor's total PAYE, NIC, and student loan liability for the month. If CIS deductions exceed the total PAYE liability, the contractor can claim a refund from HMRC.

CIS Deduction Statements

Contractors must provide each subcontractor with a deduction statement (also called a CIS voucher) showing the gross payment, the deductions made, and the net amount paid. Subcontractors use these statements to offset the deductions against their own tax and NIC liability when filing their Self Assessment return.

Conclusion

PAYE is one of the most deadline-intensive areas of UK tax compliance for employers. Monthly (or quarterly) payment deadlines, RTI submissions on every payday, year-end P60s and P11Ds, Employment Allowance claims, and CIS returns all have specific dates that must be met — and the penalty regime for missing them is well-established and automatic.

The 2026/27 tax year continues with the employer NIC rate of 15% on earnings above the £5,000 Secondary Threshold — a significant cost increase compared to the pre-April 2025 regime. Employment Allowance at £10,500 provides important relief for eligible smaller employers, but it must be actively claimed each year via an EPS submission.

The best defence against PAYE penalties is a well-organised payroll process: use compliant payroll software that submits RTI on time, set payment reminders for the 19th and 22nd of each month, and keep on top of your year-end obligations in the spring. If cash flow becomes a problem, contact HMRC before the deadline — Time to Pay arrangements are available, and approaching HMRC proactively is always better than missing a payment without notice.

Use the TaxOnTime Deadline Generator to create a personalised employer tax calendar with all your key PAYE, RTI, P60, and P11D dates — with reminders sent directly to you so nothing is missed.