PAYE & Payroll
Learn employer registration, payroll records, PAYE, employee and employer National Insurance, RTI and year-end duties.
PAYE & Payroll explained
PAYE payroll is the employer process for calculating pay, deducting Income Tax and employee National Insurance, calculating employer liabilities and reporting pay information to HMRC through Real Time Information.
This learning path covers UK rules and ReturnDeck’s UK form set. Check the effective period and official source before using a rule for a live filing.
Learn it in stages
Beginner · Employer setup and worker data
Register as an employer when required, obtain accurate starter information, use the correct tax code and National Insurance category, and establish a reliable payroll record for each employee.
Intermediate · Gross-to-net payroll
Move from gross pay through taxable pay, PAYE Income Tax, employee National Insurance and other deductions to net pay. Separately identify employer National Insurance and any other employer liabilities rather than deducting them from the employee.
Advanced · RTI and corrections
Understand the Full Payment Submission, Employer Payment Summary where applicable, pay-period reporting, corrections, leavers and year-end responsibilities. Payroll records and submissions should reconcile to the amounts paid and reported.
Benefits and wider employer duties
Some benefits and expenses create separate reporting or Class 1A National Insurance consequences. Payroll tax also interacts with pensions, student/postgraduate loans, statutory payments and the Apprenticeship Levy in relevant cases.
Example: one payroll period
Start with an employee’s contractual gross pay and taxable benefits processed through payroll. Apply the tax code and NI category using payroll software, derive PAYE and employee NI, then identify employer NI separately. Reconcile the payslip, FPS values and employer payment position before marking the period complete.
Apply this in Practice Mode →Common mistakes to avoid
- Using the wrong starter declaration or tax code
- Confusing employee NI with employer NI
- Submitting payroll after payment without checking RTI timing rules
- Failing to process leavers correctly
- Not reconciling payroll reports to HMRC liabilities and actual payments
Records and preparation checklist
Before calculating or filing, assemble the evidence that supports the position. This makes the return easier to complete and easier to explain later.
- Employee starter and identity details
- Tax code and NI category
- Gross pay, benefits and deductions
- Pension/student-loan/statutory-payment data where relevant
- FPS/EPS submission records
- Payroll-to-HMRC and payroll-to-bank reconciliation
Key terms
Pay As You Earn — the system for collecting Income Tax through payroll.
Real Time Information — payroll reporting to HMRC.
Full Payment Submission, normally reporting employee pay and deductions.
National Insurance liability borne by the employer, distinct from employee deductions.
Follow the lesson into the form
ReturnDeck’s 1,139 mapped UK fields connect form codes to plain-English meaning, applicability, source figures, calculation notes, examples, common mistakes, interactions and HMRC sources.
Calculate and check
Use the related ReturnDeck calculator or checker to turn the lesson into a practical result where the verified rules support deterministic calculation.
Open related tool →Practice what you learned
Move from learning into a fictional case file, source documents, return completion, validation and a worked answer. Practice Mode never submits anything to HMRC.
Continue to practice →Official HMRC / GOV.UK sources
These are the primary official sources for this learning path. ReturnDeck summarises them for learning; the official material remains the authority.
Source set reviewed for ReturnDeck’s 2026 UK learning layer. Tax rules change; verify the effective date for a live decision.