If you run payroll in the UK, you’re not just calculating salaries—you’re also reporting pay details to HMRC. That’s where PAYE and RTI UK payroll rules come in. Many payroll issues happen not because employers can’t pay people, but because they miss submissions, use the wrong pay date, or don’t keep clean payroll records.
This guide explains PAYE and RTI UK payroll reporting in simple terms, what FPS and EPS submissions are, the biggest mistakes employers make, and how to keep your payroll process compliant and stress-free.
What is PAYE in UK payroll?
PAYE (Pay As You Earn) is the system used to collect Income Tax and National Insurance through payroll. Each time you pay an employee, payroll calculates deductions based on things like tax codes and earnings, and these figures must be reported correctly.
In short, PAYE is the deduction and taxation framework that sits behind most employee payroll in the UK. Getting PAYE right is essential because it impacts:
what your employee takes home
what you owe HMRC
your year-end documents and records
If you want the official overview, GOV.UK has a clear employer guide.
What is RTI and why does it matter?
RTI stands for Real Time Information. Under PAYE and RTI UK payroll rules, RTI means you report pay and deductions to HMRC every time you run payroll (instead of waiting until the end of the year).
RTI matters because it keeps HMRC’s records accurate and up to date. It helps ensure:
employees’ tax records are correct
benefits and entitlements are calculated using up-to-date earnings data
year-end summaries are consistent with what was reported during the year
FPS: Full Payment Submission (the main RTI report)
The most common RTI submission is the FPS (Full Payment Submission). You typically send an FPS every time you pay employees.
The key FPS rule
Your FPS should be submitted on or before the date you pay your employees. If the FPS is late or the payment date is wrong, that’s where many compliance issues start.
EPS: Employer Payment Summary (when it’s used)
The EPS (Employer Payment Summary) is another RTI submission, used in specific situations—for example, when you need to report certain adjustments or tell HMRC that you have not paid anyone in a period (depending on your circumstances).
Not every employer uses EPS every month, but it’s important to know it exists and ensure your payroll process can handle it when needed.
PAYE and RTI UK payroll: the most common mistakes
Here are the mistakes that cause the most trouble for employers—and how to fix them.
1) Submitting FPS after payday
Problem: FPS goes late because payroll is “finalised” after wages are already paid.
Fix: Make the FPS part of the payroll run—finalise payroll, submit RTI, then pay employees.
This is one of the biggest practical improvements you can make for PAYE and RTI UK payroll compliance.
2) Using the wrong payment date
Problem: Payroll is paid on Friday, but the system says it was paid on Monday (or vice versa).
Fix: Set and follow a consistent payday and make sure the payroll payment date matches the actual bank payment date.
3) Poor payroll recordkeeping
Problem: You can’t easily explain what was paid, why deductions changed, or what happened last month.
Fix: Keep payroll reports, payslips, and submission confirmations organised.
This is also where a lot of payroll disputes come from—employees want clarity, and you want a simple audit trail.
4) Payslip issues and unclear deductions
Problem: Employees don’t understand deductions, and queries become recurring.
Fix: Ensure payslips clearly show gross pay, tax, National Insurance, pension deductions (if applicable), and net pay. A clean payslip reduces confusion and builds trust.
A simple monthly workflow to stay compliant
If you want a stable PAYE and RTI UK payroll process, your monthly (or weekly) workflow should look like this:
Confirm employee changes (starters/leavers, salary changes, hours changes)
Run payroll calculations and validate totals
Submit RTI (FPS; and EPS if applicable)
Pay employees
Reconcile payroll totals and store records (reports, payslips, submissions)
This approach reduces last-minute surprises and keeps payroll consistent.
What about year-end tasks like P60?
Year-end tasks sit on top of your regular payroll routine. While RTI reporting happens during the year, you still need year-end documentation in the UK. If your RTI and payroll records are clean throughout the year, year-end becomes much smoother.
If your payroll process has been inconsistent, year-end becomes stressful—because you may need to correct payroll records and explain discrepancies.
How payroll services reduce RTI risk
Many businesses outsource payroll because it’s easier to stay consistent when a dedicated team handles:
payroll calculations
RTI submissions
payslips and reporting
payroll records and employee query handling
If you’re scaling, hiring multiple roles, or just want fewer compliance headaches, outsourcing is often the cleanest way to strengthen your PAYE and RTI UK payroll process.
Final thoughts
PAYE is the structure behind deductions, and RTI is the reporting system that keeps HMRC updated each time you pay people. If you want strong PAYE and RTI UK payroll compliance, focus on the basics: submit FPS on time, use the correct payment date, keep clean records, and make payroll a repeatable workflow.
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