Real Time Information (RTI): payroll reporting for employers

Real Time Information (RTI) is how employers report payroll to HMRC. Since 2013, every payment to an employee has been reported to HMRC at the time it is made, rather than in an annual return. That data drives employees’ tax codes, Universal Credit payments and HMRC’s view of what each employer owes.

The two main RTI submissions

Full Payment Submission (FPS)

The FPS tells HMRC about each payment to each employee: gross pay, tax, National Insurance, student loan deductions, pension contributions, statutory payments and the employee’s details. You send it:

• on or before each payday, even if you run payroll weekly
• for every employee paid in that period, including those paid below the Lower Earnings Limit
• including new starters (with their starter information) and leavers (with their leaving date)

There are limited exceptions allowing a later FPS, for example when an employee is paid on the day of a one-off task and you cannot report in advance, or where payments are made in cash on the day.

Employer Payment Summary (EPS)

The EPS tells HMRC about adjustments to what you owe, or that you have not paid anyone. Send it by the 19th of the following tax month to:

• claim the Employment Allowance
• recover statutory payments such as Statutory Maternity Pay, Paternity Pay and Adoption Pay
• claim CIS deductions suffered, if you are a limited company subcontractor
• report the Apprenticeship Levy, if your pay bill is over £3 million
• tell HMRC you paid no employees in a tax month, to avoid an estimated charge
• report the final submission for the year, if not included on the last FPS

Payroll deadlines

Tax months run from the 6th of one month to the 5th of the next. Employers whose average monthly PAYE bill is less than £1,500 can pay quarterly.

Late filing penalties

HMRC charges a penalty if an FPS is late, or if you file fewer FPS returns than expected. The first late submission in each tax year does not attract a penalty. After that the monthly penalty depends on the number of employees:

A further penalty of 5% of the tax and NI that should have been reported can apply if a return is more than three months late. Late payment penalties and interest apply separately to PAYE paid late.

HMRC does not usually charge a penalty for an FPS that is late by up to three days, but persistent late filing can still be penalised. Set reminders and file before payday.

Correcting mistakes

• During the tax year: correct errors on your next FPS, using year-to-date figures.
• After the tax year: send an additional FPS for the year in question, or an Earlier Year Update (EYU) for years before 2020/21.
• Wrong payments: if you paid an employee the wrong amount, correct it in a later payroll and report the corrected figures.

Starters and leavers

• New starters: use the P45 from their previous employer or the starter checklist, and include the starter details on the first FPS. See emergency tax codes.
• Leavers: include the leaving date on the FPS and give the employee a P45. Payments made after a P45 has been issued are taxed using code 0T on a non-cumulative basis.

Payroll software

You must use payroll software that can submit RTI returns. HMRC offers Basic PAYE Tools free for employers with fewer than 10 employees, and many commercial products are available, often integrated with accounting software. Our payroll software guides compare the main options.

Frequently asked questions

When must I send a Full Payment Submission?

On or before each payday, every time you pay employees.

What is an EPS used for?

To claim the Employment Allowance or statutory payment recovery, report the Apprenticeship Levy or CIS deductions, or tell HMRC you paid no employees in a tax month. It is due by the 19th of the following month.

What is the penalty for a late FPS?

From £100 to £400 a month depending on the number of employees, after the first late submission of the tax year, which is not penalised.

When do I pay PAYE to HMRC?

By the 22nd of the following tax month if paying electronically, or by the 19th if paying by cheque. Small employers may pay quarterly.