Payroll Compliance in the UK isn’t only about paying salaries on time. It’s a compliance process that includes deductions, reporting to HMRC, employee documentation, pensions, and year-end tasks. Whether you run payroll in-house or outsource it, this checklist helps you ensure you’re covering the essentials in 2026.
1) Confirm your PAYE setup is correct
Most UK employers run payroll using PAYE (Pay As You Earn), which is how Income Tax and National Insurance are collected through payroll. Make sure your payroll process is consistently applying tax codes, calculating deductions correctly, and keeping employee details up to date.
If you’re unsure about the PAYE basics, GOV.UK provides a clear overview of what employers must do when running payroll.
2) RTI submissions: submit FPS on or before payday
The UK uses RTI (Real Time Information) reporting, which means you report payroll information to HMRC each time you pay employees.
A key Payroll compliance rule is that your Full Payment Submission (FPS) should be sent on or before the date you pay your employees. Late submissions can cause issues for employee records and may trigger HMRC follow-ups.
3) Issue payslips and keep payroll records organised
Every pay run should include a clear payslip showing:
Gross pay
Deductions (tax, National Insurance, pensions where applicable)
Net pay
Pay period and payment date
Good recordkeeping isn’t just best practice—it supports compliance and helps you answer employee or HMRC queries quickly.
Internal link (inbound #1): Learn why this matters here:
https://eorservices.co.uk/why-payroll-records-matter/
4) Pay HMRC on time and reconcile payroll totals
After each payroll period, ensure:
totals deducted match what you’re reporting
payment schedules to HMRC are followed
payroll records reconcile with bank payments and employee payslips
This is where small mistakes can snowball—especially when a business grows and hires multiple employees, contractors, or a hybrid workforce.
5) Workplace pensions: keep auto-enrolment duties in check
Workplace pensions are one of the most common areas where payroll and HR overlap. Employers must follow auto-enrolment duties, assess eligibility, communicate properly with staff, and ensure contributions are processed.
Even if your payroll provider supports pensions, you still want a clear internal process for:
eligibility assessment
contribution calculations and deductions
handling opt-ins/opt-outs and deadlines
6) Statutory payments: confirm your payroll can handle them
Statutory payments (like sick pay and parental pay) often require payroll configurations and eligibility tracking. It’s important your payroll process can handle statutory rules correctly and reflect them on payslips and payroll reports.
Practical tip: make sure absence tracking and payroll communication are aligned, so statutory pay isn’t missed or miscalculated.
7) Year-end essentials: don’t miss the P60 deadline
One of the most important year-end tasks is issuing P60s to employees who are still employed on the last day of the tax year.
You must provide P60s by 31 May after the tax year ends. Missing this is a common Payroll compliance mistake.
8) Common UK payroll compliance mistakes to avoid (2026)
Here are the most common issues businesses run into:
FPS submitted late (after payday)
inconsistent employee records leading to reporting errors
poor payroll recordkeeping and missing documentation
pension duties not tracked properly
year-end deadlines missed (like P60s)
How payroll services help reduce Payroll compliance risk
A dedicated payroll provider can help you:
keep PAYE and deductions consistent
submit RTI on time every pay cycle
maintain payroll records and employee documents
support pensions and statutory pay handling
manage year-end tasks smoothly
If you want to outsource payroll, see: Payroll Services UK
Conclusion
In 2026, the safest payroll approach is a consistent process: correct PAYE setup, RTI reporting on time, proper records, pensions awareness, and year-end readiness. If your team is growing—or you want fewer payroll headaches—outsourcing payroll can be a practical way to stay compliant and save time.
