PAYE, or Pay As You Earn, is the system HMRC uses for employers to deduct Income Tax and National Insurance from employees' wages before they are paid. It applies to most employees and to company directors who take a salary.
Registering as an employer
A business must register as an employer with HMRC before the first payday, then run payroll each period to calculate deductions and report pay and tax details in real time. Late or incorrect PAYE reporting can lead to penalties.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.