P49: Paying someone for the first time

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Contents

Introduction

This booklet will help to get you started and, in most circumstances, provide all the information that you need to pay your employee(s) the correct amount after taking off tax and NICs.

Running your payroll

You have several choices about how you run your payroll

You can:

  • use an intermediary such as a payroll bureau or an agent
  • use a payroll software package
  • operate the payroll yourself. This Helpbook and your Employer CD-ROM both give step by step advice to help you do this

Whatever option you choose, you are still responsible for your payroll even if you don't prepare the records yourself.

Once you have set up your payroll you may have to deal with Student Loan deductions, Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Stakeholder Pensions and Payroll Giving.

If you come across any of these phone the New Employer Helpline.

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What you have to do

How do I get started?

We recommend that you work your way through this booklet in the order that it has been written and return to it when you have carried out each instruction.

Once you take on an employee, you are responsible for calculating and deducting PAYE tax and NICs from their pay. Before you do this, you have to recognise who counts as an employee.

Who counts as an employee?

An employee is anyone you employ under a contract of service, and includes full-time, part-time and casual workers. If someone working for you says they are self-employed you must check that this is actually the case. This is because the tax and National Insurance rules for self-employed are different to the rules for employees.

You can check whether a person is self-employed by either:

Directors of limited companies are also employees of the company so you must deduct tax and NICs from their pay. There are special rules for directors – phone the New Employer Helpline for advice.

What counts as pay?

The main things that count as pay are:

  • wages
  • salary
  • overtime payments
  • bonuses

But there are others. Please phone the New Employer Helpline for advice if you:

  • pay expenses to your employee(s)
  • supply extras, such as a car or private medical insurance

National Minimum Wage

Most people working in the UK for an employer are entitled to be paid a minimum amount defined by law. This is called the National Minimum Wage. To find out more about the National Minimum Wage, including how much this is:

  • see National Minimum Wage
  • phone the National Minimum Wage helpline on Tel 0845 60 00 678, open from
    9.00 am - 5.00 pm, Monday to Friday

Identity Checks

The Home Office has introduced identity checks for all new employees in order to safeguard you from employing someone illegally.

For more information contact the Home Office, by:

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Information needed from your employee

Your employee's tax code, National Insurance number (NINO) and date of birth

Tax code

You will usually obtain this from item 6 of their form P45 (PDF 64K).

If your employee does not give you a form P45, you and your employee must complete a form P46 (PDF 44K), see Filling in a P46. You will be able to determine your employee's tax code from the details given on the completed P46.

If your new employee gives you a form P45, please read 'P11 - Taking on an employee with a form P45'

If your new employee does not have a form P45, see P11 - Taking on an employee without a form P45.

National Insurance number

You will normally obtain this from item 2 of their form P45, see 'P11 - Taking on an employee with a form P45'.

If your employee does not give you a form P45, you may need to send us a form P46, see see Filling in a P46. If you send us a form P46 we will automatically trace the NINO and let you know what it is.

If the P45 does not show the NINO, ask your employee if they can find the number on any other documentation they have, for example, their plastic NINO card (RD3) or a form P60 from their previous employer.

If you have been unable to obtain your employee's NINO you will need to complete a form CA6855 to enable us to trace the number for you. The CA6855 is available on your Employer CD-ROM or from the Employer Orderline. You will find an order form in your New Employer Starter Pack.

If your employee has never had a NINO they must contact their Jobcentre Plus office on Tel 0845 600 0643 to arrange an interview to obtain one.

Date of Birth (DoB)

You should always enter your employee's date of birth on the form P11 Deductions Working Sheet (or equivalent record) - see 'setting up your payroll' and 'preparing a form P11' for further information on completing the form P11.

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P11 Taking on an employee with a form P45

All new employees who come to you from another job, or from a period on state benefits, should bring with them a completed form P45.

The P45 provides details from your new employee's previous employment. Your employee must keep Part 1A of the P45 and give you Part 2 and Part 3.

When you are given a form P45 the first thing you must do is check that the information on the P45 is correct.

This diagram (PDF 94K) explains the form and gives details of the checks that you must make. You can find further help at what to do with Part 2 and 3 of the form P45.

Item 4

See which tax year the P45 is for. To check the year of the P45 look at the leaving date at item 4.

  • If the leaving date is in the current tax year – in the period 6 April 2008 to 5 April 2009– and after 24 May 2008, use the tax code on the P45.
  • If the leaving date is between 6 April 2008 and 24 May 2008 or in the last tax year, call the New Employer Helpline for advice.

Items 6 and 7

Check that the entries on both pages of the P45 at items 6 and 7 are the same. If they are not, call the New Employer Helpline.

Check tax

If the P45 is for the current tax year and there is an entry at item 7, 'Total tax to date', you must check this figure is correct. If you are using your Employer CD-ROM the 'P45 checker' in the Calculator Section will check this figure for you. Otherwise, call the New Employer Helpline and ask them to check the 'Total tax to date' figure for you.

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Continue Student Loan deductions

If there is a 'Y' an 'X' or a tick entered at item 5 either:

  • use the Student Loan Deductions Calculator on your Employer CD-ROM
  • call the New Employer Helpline for advice

Tax code

You will use either the tax code shown on the P45, or the tax code given to you by the New Employer Helpline (see item 4 above) when you set up your payroll record – form P11.

Codes D, K, NT

If the code number you are using starts with a D, K or is NT, call the New Employer Helpline for advice.

What to do with Parts 2 and 3 of form P45

Fill in Part 3 of the P45. Send it to the HMRC office that deals with you as an employer.

If you are registered for PAYE Online for Employers, you can complete the P45 online. See 'do it online' for more details or visit us online.

You must keep Part 2 of the P45 for at least three years after the end of the tax year it is for.

Once you have checked the form P45 and have your employee's tax code you are ready to set up your payroll and workout how much to deduct from your employee’s pay. Please go to 'setting up your payroll'.

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P11 - Taking on an employee without a form P45

There are various reasons why your employee may not be able to give you a form P45, for example:

  • they have lost their P45
  • this is their first job
  • they are continuing with their current job as well as working for you

If your employee does not give you a P45 you and your employee must complete a form P46 unless your employee

  • is a student working for you solely during their holidays
  • intends to work for you for one week or less, with no expectation of coming back in the current tax year

If your employee falls into either of these categories call the New Employer Helpline for further advice.

A P46 is the form you use to tell us about an employee who does not have a form P45 to give you.

The form P46 is available from:

  • your New Employer Starter Pack
  • the 'Forms & Helpbooks' section of your Employer CD-ROM
  • the Employer Orderline, see order form in your pack or Tel 0845 7 646 646

If you are registered for PAYE Online for Employers you can complete the P46 online. See 'do it online' for more details.

Filling in a P46

The P46 is divided into two sections.

Section one is for employee information and Section two for employer information.

From April 2009 you must show the DoB and gender on all forms P46. We strongly recommend that you start collecting this information from your employees now.

Section one

If you are not sending your form P46 online.

Your employee must complete Section one.

Ask your employee to:

  • enter their personal details. If your employee does not know their NINO we will automatically trace their number and let you know what it is
  • read statements A, B and C and tick the one that applies
  • read the Student Loan section and tick box D if it applies
  • sign and date Section one
  • return the completed form P46 to you before their first pay day

If you are sending your form P46 online

Your employee does not necessarily have to complete Section one of our forms P46.

  • You can obtain the information needed to complete Section one from your employee, either by email or on your own stationery, and complete Section one on your employee's behalf. You must keep an audit trail to confirm how this information was obtained. If your employee does not know their NINO we will automatically trace their number and let you know what it is.
  • You can decide whether you need a signature with that information for your own purposes.
  • Your employee must provide you with this information before their first pay day.

Section two

You must complete Section two:

  • enter your employer and your employee's details
  • in the Tax code used part, you should:
    • tick box A, B or C in line with the box ticked in Section one
    • refer to the table below to find out what tax code to use
    Which tax code to use?

    On the form P46

    Tax code to use

    Box A ticked

    543L cumulative

    Box B ticked

    543L week 1 or month 1

    Box C ticked

    BR cumulative

    No box ticked

    BR cumulative
    • write the tax code you have used in the Tax code used box. You will use this tax code when you set up your payroll records - form P11. (Don't worry if you do not understand the code numbers at the moment, these will be explained in detail later.) Exceptionally, if your employee has not completed the form P46 or provided you with the information to fully complete Section one (if you send your P46s online), in time for their first pay day you must complete Section one to the best of your knowledge on their behalf and enter your details in Section two. Use tax code BR on a cumulative basis and send the P46 to your HMRC office on the employee's first pay day, do not delay sending us the form
  • Send the P46 to your HMRC office on the first pay day. However, if the employee has ticked box A or box B do not send the form until their earnings are equal to the National Insurance Lower Earnings Limit or £90.00 per week/£390.00 per month.
  • If you need to make Student Loan deductions (see box D of form P46), phone the New Employer Helpline and they will tell you what you need to do.

Once you have determined your employee's taxcode you are ready to set up your payroll and work out how much tax and NICs to deduct from their pay.

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Setting up your payroll

Whether you are using a form P45 or a form P46, you will now need to set up your payroll.

When you pay someone for the first time you must keep a record of all the payments you make and calculate the tax and NICs to deduct from these payments. You must record this information each time you make a payment.

If you are going to operate your payroll yourself you will need to prepare and maintain a P11 Deductions Working Sheet (or equivalent record)when either:

  • you pay your employee:
    • *£90.00, or more in any week (NICs weekly LEL)
    • *£390.00, or more in any month (NICs monthly LEL), or

*(If your pay period is other than weekly or monthly please see the Employer Helpbook CWG2 Employer Further Guide to PAYE and NICs (PDF 443K))

  • your employee has given you a form P45 with a date of leaving in the current tax year
  • you have paid your employee and you have to operate tax code BR in accordance with the P46 procedures, see 'P11 - Taking on an employee without a form P45'
  • you have paid your employee and HMRC has sent you a tax code

If your employee has worked for you previously in the tax year you must complete a new form P11 for their latest spell of employment.

If you are not required to maintain a form P11 Deductions Working Sheet you must keep a record of the employee's name, address, and the amount of wages paid each pay period for example, weekly/monthly/four weekly.

You will find a copy of a form P11 in your New Employer Starter Pack.

The P11 is a double-sided form; the left-hand columns are used to record NICs and the right-hand columns to record tax deductions. You must use a separate form for each employee. See to prepare a new P11, fill in boxes A-L (PDF 107K)

If you are going to operate the payroll yourself there are three ways to complete a form P11.

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Using the P11 Calculator on your Employer CD-ROM

This is the easiest and quickest way to complete a form P11. The P11 calculator (PDF 1.86MB) will:

  • work out the tax deductions and NICs for you
  • complete the on-screen equivalent of the paper P11 Deductions Working Sheet
  • allow you to save the details on your computer and update the P11 each time you pay your employee

You must install your CD-ROM to use the P11 Calculator.

Using the PAYE tax and NICs calculator on your Employer CD-ROM and a paper form P11

If you are completing a paper form P11, you can use the PAYE tax and NICs calculators to work out the deductions for you. The calculators will tell you the figures you must enter in the tax and NICs columns on your P11.

Using the manual tax and NICs tables and a paper form P11

If you are completing a paper form P11 and are not using your Employer CD-ROM, you will need to calculate the tax and NICs using the tax and NICs tables.

If you have decided to use the P11 Calculator on your Employer CD-ROM please go to 'Using the P11 Calculator on your Employer CD-ROM'.

If you have decided to use either the

  • tax and NICs calculators on your Employer CD-ROM
  • the manual tax and NICs tables

please go to 'Using a paper form P11'.

Using the P11 Calculator

You can calculate and record PAYE tax and NICs using the P11 Calculator on the Employer CD-ROM.

What does the P11 Calculator do?

The P11 Calculator (PDF 1.86MB)

  • works out and records each employee's tax deductions and NICs
  • completes all relevant columns on the P11 Deductions Working Sheet for you
  • produces an up-to-date P11 summary
  • gives you the detail you will need to complete your end of year Returns
  • provides a summary of amounts of tax and National Insurance due to HMRC each month on the P32 Payment Record
  • can save your payroll data to a spreadsheet

Installing the Employer CD-ROM

Before you can use the P11 Calculator you must install the CD-ROM onto your computer. Installation and systems requirement details are on the back of your CD-ROM cover. Due to continuing improvements the screens on the CD-ROM may look different to those shown here.

Accessing the P11 Calculator

The easiest way to access the P11 Calculator (PDF 1.86MB) is from the Calculators section on the CD-ROM home page.

This will take you to the P11 Calculator menu page where you can access the:

  • P11 Calculator
  • Employer database
  • P45 Checker
  • how to back up data

If your employee has given you a P45 go to the P45 checker or otherwise continue from Employer Database

P45 checker

When you take on a new employee who gives you a P45, use the P45 checker (PDF 145K) to help you work out whether the total tax to date figure on the P45 is correct.

Once you have entered details from the P45, select 'calculate' and the P45 checker will tell you if the tax deducted is correct and tell you what to do next.

Employer database

The P11 Calculator uses the information held on the Employer database.

The database is in two sections, one that holds employer information and the other for employee details.

What details are needed?

You will need the following details to set up the database.

Employer details:

  • name and address
  • PAYE reference
  • Accounts Office reference

Employee details:

You will need to enter frequency of pay works/payroll number (if applicable) and employment start date (if they started after 6 April 2008) plus details of previous pay and tax if the new employee has given you a P45.

The following pages describe the process for setting up an employer and employee database. You can also view a demonstration on the CD-ROM. Select the 'Help' section then select 'How to use this CD-ROM'.

You can access the Employer Database from the first P11 Calculator page (PDF 125K).

Once you have entered the Employer Database for the first time you must enter your employer details by selecting 'Add'.

You will find your Employer PAYE reference and Database Accounts Office reference on the letter that we sent to you with your New Employer pack.

After entering your details (PDF 94K) select 'Save'. Once you have saved the details, you will be taken back to the Employer list that now displays the name of your business and your Employer PAYE reference number. If you have more than one Employer PAYE reference you can add other employer details by following the above process again.

You must now add details about the employee(s) (PDF 112K) you wish to use the P11 Calculator for. You do this by selecting 'Employee List' and then selecting 'Add'.

You must now add details about your employee.

Once you have entered these details select the orange P11 Calculator details tab at the top of the screen.

Select 'Yes' to use the employee in the P11 Calculator.

You must now add the following details about your employee.

Tax code

If your employee has just started to work for you, use the tax code:

If the tax code is followed by 'week 1', 'month 1' or 'X' you must highlight the week 1/month 1 box on-screen.

If you want more information about tax codes and how they work, go to 'Using a Tax Code'

How are NICs made up?

NICs are made up of two elements:

  • employee's contributions, which you deduct from your employee's pay
  • employer's contributions, which you must pay

National Insurance category

There are several different NICs categories. For most men aged 16 to 64 and most women aged 16 to 59 category A NICs apply.

If you are unsure about which NI category letter applies follow the link underneath the NI category box and follow the flowchart. If you are still unsure which letter applies phone the Employer Helpline.

Please note the NI category letter is not the check character at the end of the employee's NINO.

Is the employee a director

Indicate whether the employee is a director. If the employee was not a director at the start of the tax year enter the date appointed or joined the business as a director here.

Select NIC method (directors only)

If you have indicated 'Yes' to the previous question select either:

  • 'calculate NICs as a normal employee'

This method calculates NICs as a normal employee subject to the conditions set out on page 7 in the Employer Helpbook CA44 National Insurance for Company Directors. But if you use this method you need to carry out an Annual Earnings Period check when the last payment is made for the tax year, or when the directorship ceases.

  • 'directors Cumulative NICs' to calculate NI throughout the year using an annual or pro-rata annual earnings period.

You will find more information about NICs for directors in the Employer Helpbook CA44 National Insurance for Company Directors (PDF 851K).

Student Loan deductions

Select 'Yes' if you have received a form SL1 Student Loan – Start Notice, or for new employees who have given you a form P45 with an entry in box 5 'Continue Student Loan deductions'. If your new employee does not give you a form P45 they should complete a form P46. If they have ticked the Student Loan box select 'Yes'.

Date of birth

If not already pre-populated from the database, enter your employee's date of birth in the format DD/MM/YY or DD/MM/YYYY.

Employee is paid

Select the pay period for your employee, either weekly paid, two-weekly, four-weekly or monthly.

Start date

If your employee started to working for you on or after 6 April 2008, enter the date they started.

Details from previous employment

If your employee has given you a P45, use the P45 checker to check the figures are correct and enter the figures confirmed by the checker.

This is what the complete screen (PDF 56K) will look like.

You must now select the 'Save' button to add these details to the database.

If you want to use the P11 Calculator for additional employees select 'add' from the 'employee list' and work through this process again.

Once you have added all your employees select 'Return to P11' to close the database. You can return to the database at any time to amend the entries or add additional employer and employee details.

P11 Calculator

You will now be taken back to the P11 Calculator menu. From here you can access the P11 Calculator (PDF 1.86MB) by selecting 'Enter P11 Calculator'.

Select employee

Click 'Select Employee'. There are two other options here. The 'P32 Summary' option summarises all your employees tax and NICs each tax month and this is covered in more detail at 'Where to find the P32 Summary. 'In-Year Save' is covered at In-Year Save - saving data to a speadsheet.

Once you have entered the P11 Calculator section,select your employee.

Once you have highlighted the employee select (PDF 113K) 'next' to be taken to the main P11 Menu.

This is the main P11 menu. You will see your employer and employee details towards the top of the page.

Pay details

Select 'Enter Pay Details'.

You must now enter the:

  • payment date
  • gross pay during this pay period
  • gross pay for NICs if it is different. If you pay anything other than salary, wages, overtime, bonuses or commission the gross pay for NICs may be different. For more information see the CWG2 Employer Further Guide to PAYE and NICs (PDF 443K). You can find the CWG2 in the Forms and Helpbooks section of your CD-ROM. Do not make an entry in this box unless the gross pay for NICs is different to the 'gross pay this period'.

If you are unsure what to include in any of the boxes, check the blue 'information' symbols for more information.

You must now indicate whether you have received a P6 Coding notification from your HMRC office.

The P6 tells you when your employee's tax code has changed.

If you have received a P6, go to 'Change of employee's tax code' for further information.

If you have not received a P6, continue. Select 'Next'. The screen will look like this (PDF 87K).

Now enter details of any Statutory payments paid to your employees during this pay period.

If a Student Loan deductions needs to be made the amount will appear on this screen (PDF 134K) in a greyed out box.

Leave the boxes blank if these do not apply.

If you would like to know more about these topics, go to the Learning Zone on your Employer CD-ROM or phone the New Employer Helpline.

Once you select 'Next' you will be taken to a confirmation page that summarises the details you have entered for your employee during this pay period. The screen will look like this (PDF 134K).

If the details are incorrect select 'Back' to re-enter the correct information.

When you are certain that the information is correct select 'Save to P11' to transfer the details onto the P11. The next screen (PDF 127K) will show your completed form P11.

The first page of the P11 shows the entries relating to NICs, Statutory payments and Student Loan Deductions.

Select the 'PAYE Income Tax' tab to view the second page of the P11 that shows details of the total gross pay and entries relating to PAYE tax deductions.

Use the scroll bar (bottom and right of the P11 summary) to view the whole of each side of the form P11, (See example (PDF 127K)).

As you continue to pay your employee throughout the year, the P11 Calculator will:

  • work out the PAYE tax and NICs to deduct for each pay period
  • complete the P11 entries for you
  • give you an end of year summary with all the detail you will need to complete your end of year returns

Change of employee's tax code

If your employee's tax code changes during the tax year your HMRC office will send you a form P6. The P6 looks like this (PDF 26K).

When you receive a form P6, use the tax code on it from the first pay day after you receive it unless your HMRC office tells you otherwise.

You must enter the revised tax code onto the P11 Calculator. To do this, when you enter pay details for the relevant pay period, answer 'yes' to the question 'Have you received a P6 notice for this employee since their last pay day?'. Then select 'Next' (PDF 159K).

You must now enter the revised tax code, including previous pay and tax details (if any), shown on the P6. See example (PDF 133K). Then select 'Next'.

You must now:

  • enter details of any Statutory payments and Student Loan deductions, select 'Next'
  • confirm your entries are correct and if so, select 'Save to P11'

The P6 details will now be incorporated. The taxcode will be updated in the database and any pay and tax from a previous employment will be included in the current pay period's figures to give you a revised amount of tax. See example (PDF 133K)

P32 employer deductions summary

The P32 Summary will total all your employees' PAYE tax, National Insurance contributions and Student Loan deductions for each tax month and show what is due to HMRC.

Important note: the P32 Summary will only include details relating to employees entered on the P11 Calculator.

Where to find the P32 summary

The P32 summary (PDF 200K) is found within the P11 Calculator menu.

This screen (PDF 200K) explains what the P32 Summary will do. Select 'Next' to continue.

There are a number of options, but to start your P32 record select 'Create a P32 Entry'. The following screen should look like this (PDF 200K).

Create a P32 entry

Before you can view what is due you must create a P32 entry for each tax month.

This will show the total PAYE tax, Class 1 NICs and any Student Loan deductions from all P11s for the employer chosen. The P32 will build a record month by month starting at month 1. But it will not skip a month, so if you have entries in months 1 and 3 and none in month 2 you must still create a 'nil' entry for month 2.

This screen (PDF 142K) also has an entry for 'Income Tax Subcontractor Deductions', in case you need to add these to your record.

Either leave blank or enter the relevant details then select 'Next'.

On this screen (PDF 142K) you can enter any statutory payment recoveries and compensation.

Recovered statutory payments and compensation are deducted from your monthly National Insurance and PAYE liability.

Leave blank or enter details then select 'Next'.

Then select 'Finish' to view the P32 entry Summary (PDF 186K).

View P32 summary

Select this option to view the P32 Summary (PDF 186K).

Refresh P32 summary

Select this option if you amended any details in the P11 Calculator. For example, if you have amended an employee's pay details for a previous pay period, you will need to refresh the P32 Summary to take into account changes made.

Amending a previous P32 entry

If you make a mistake and have to amend your record of deductions, you can do this by selecting 'Amend a previous P32 entry'.

If you need to amend the last P32 entry you will need to delete the whole entry and input the details again. If you need to amend an entry before the last one, you will need to delete all entries going back to the month in question. You will then have to re-enter all deleted entries.

Delete all P32 entries for this employer

This option will allow you to clear the whole year's P32 entries.

P32 Record of funding

If you have received funds from HMRC to pay for statutory payments or to refund PAYE income tax. You should record this by selecting 'P32 record of funding'. Creating and amending funding entries is identical to creating and amending P32 entries.

In-year save-saving data to a spreadsheet

Example screen shot (PDF 77K)

You can copy the P11 data – P11 summary, P14 and P32 to a spreadsheet by selecting the 'In-year save' function.

This creates 'csv' (comma separated values) files which can be read by any spreadsheet application, for example, Excel or Quattro Pro.

This will be saved to 'My Documents'. However, you can save the information to a different location by selecting 'Change'.

This will then allow you to select a different destination folder.

Once saved the files can be opened by any spreadsheet application such as Excel or Quattro Pro.

Backing up data

You can back up data and save it onto floppy disc, CD-ROM or USB memory stick.

For pay period backups

We recommend that you back up the data after each pay period and keep it separate from the computer. You can do this either on a disc or on a server.

To find the data file that you will need to backup, you will need to find the installation folder 'Employer CD-ROM 2008'. On a standard installation you will find this using the following steps:

My computer
Local Disc (C:)
Program Files
HMRC
Employer CD-ROM 2008

P11 Calculator only back ups

If you wish to save details from the P11 Calculator you do not need to save the whole 'Data' folder. Instead, follow the steps shown above and:

  • open the 'Data' folder
  • copy the file named 'empcd.v12' onto your chosen means of backup
  • right click the file 'empcd.v12'
  • select 'Send to'

If you need to restore the information, simply replace the 'empcd.v12' file with the saved version

If you have to re-install the 2008 CD-ROM 2008, the 'empcd.v12' file will not yet exist in the 'Data' folder. Simply:

  • copy the saved file 'empcd.v12' into the 'Data' folder
  • right click the saved file 'empcd.v12'
  • select 'Copy'
  • right click into an empty area of the 'Data' folder and select 'Paste'

Full instructions can be found in FAQs in the Help section of the CD-ROM.

What to do next

Now you have completed your P11 go to 'what next - paying your employees' to find out what to do next.

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Using a paper form P11

If you are completing a paper form P11 and not using your Employer CD-ROM you will need to order the following tables from the Employer Orderline. See the Order Form in your New Employer pack for details or Tel 0845 76 46 646.

NICs tables

There are many different types of NICs tables. For most men aged 16 to 64 and most women aged 16 to 59 you will use the CA38 NICs tables A and J.

However you will need to contact the New Employer Helpline to ask which tables you need to order if:

  • your employee is a married woman or widow who tells you that they are entitled to pay reduced rate NICs
  • your employee is State Pension age or over
  • you operate a company pension scheme

The NICs tables work out how much NICs you and your employee have to pay.

  • tables A, Pay Adjustment Tables – use to work out how much of your employee's pay is tax free.
  • taxable Pay Tables Calculator Method – use to work out how much tax is due. You need a calculator to use these tables

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Preparing a form P11

If you are using the tax and NICs Calculators on your Employer CD-ROM, or the manual tax and NICs tables, you will need to complete a paper form P11 for each employee. You will find a form P11 in your New Employer Pack. To prepare a new P11, fill in boxes A-L as shown here (PDF 132K).

Box descriptions

Tax year
Check you are using a form for the correct year. The tax year runs from 6 April to 5 April. Tax year 2008-09 starts on 6 April 2008 and ends on 5 April 2009.

Box A
Enter the name of your business here.

Box B
Enter the name of your business's HMRC office and Employer PAYE reference if you know it. If not, your HMRC office will let you know what this is shortly.

Box C
Employee's surname.

Box D
Employee's first names.

Box E
NINO. As soon as an employee starts working for you, ask them for their NINO. If your employee cannot remember their NI number, check whether it is on any papers they have given to you. If you cannot find it, and you have to send a form P46 to your HMRC office, take no further action as we will automatically trace the employee's NINO and tell you what it is on a form P46-5. We will tell your employee what it is on a form P217.

If you do not have to send a form P46, you can complete and send us form CA6855 and we will trace the number for you. The CA8655 is available on your Employer CD-ROM or from the Employer Orderline. You will find an order form in your New Employer Pack.

Box F
Enter your employee's DoB here. From April 2009 you will have to show an employee's date of birth and gender information on all forms P45 and P46. We strongly recommend that you start collecting this information from your employees now.

Box G
Enter any works number for your employee here.

Box H
Enter the date your employee started working for you.

Box I
Only complete this box if your employee has stopped working for you.

Box J
If your employee has ticked 'Box D - Student loans 'on their form P46, or 'Item 5' of their P45 shows that your employee makes Student Loan repayments, tick this box.

Box K
Complete Box K with your employee's tax code.

Box L
Only use Box L if you receive an amended tax code for your employee.

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Where to start completing the form P11

Example 1 – paying weekly

Look at example 1 (PDF 23K) if you pay weekly, or example 2 (PDF 30K) if you pay monthly.

The main part of the P11 is split into columns and rows. Each row represents a week number. To find out which row to start with, look at the table in example 1 (PDF 23K).

The starting point for completing a P11 is the week that includes the first pay day.

Using example 1 (PDF 23K), find the week number that includes the first pay day. For example, 30 May 2008 (Friday) is in week 8.

In this example you would start to complete your P11 at line 8.

Example 2 – paying monthly

The main part of the P11 is split into columns and rows. To find out which row to start with, look at the table below.

The starting point for completing a P11 is the month that includes the first pay day.

Using example 2 (PDF 30K), find the month number that includes the first pay day. For example, 30 May 2008 (Friday) is in month 2.

In this example you would start to complete your P11 at line 8.

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National Insurance contributions (NICs)

How are NICs made up?

NICs are made up of two elements:

  • employee's contributions, which you deduct from your employee's pay
  • employer's contributions, which you must pay

Which NICs category do I use?

There are many different NICs categories. For most men aged 16 to 64 and most women aged 16 to 59 you will use Category A.

Contact the New Employer Helpline if:

  • your employee is a married woman or widow who tells you that they are entitled to pay reduced rate NICs
  • your employee of State Pension age or over
  • you operate a company pension scheme
  • you are unsure what National Insurance category to use

How do I work out the NICs due?

The easiest and quickest way to work out the NICs is to use the NICs Calculator on your Employer CD-ROM.

The Calculator will work out the NICs for you and provide the figures that you will need to enter in columns 1a to 1e of the form P11. An example of a completed form P11 for both weekly (PDF 133K) and monthly (PDF 133K) paid employees is shown.

You will find the National Insurance Calculator in the 'Calculators' section of your Employer CD-ROM.

If you are not using your Employer CD-ROM you will need to work through this book and calculate the NICs manually using the NICs tables.

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Calculating NICs

Category A NICs have been used in the following examples. If you are required to deduct a different NICs category, you must ensure that you order the appropriate NICs tables from the Employer Orderline – see the order form in your New Employer Starter Pack or Tel 0845 7646 646.

If you require further advice on how to complete the NICs details on your form P11 please phone the New Employer Helpline.

Working out NICs using the National Insurance tables – category letter A.

To calculate Category A NICs you will need to use booklet CA38 NICs tables A & J which is available from the Employer Orderline – see the order form in your New Employer Starter Pack, or Tel 0845 76 46 646:

How to use the tables

Turn to Table A. Look up the employee's gross pay in the left–hand column of the table 'Employee's Earnings up to and including the UEL (Upper Earnings Limit)'. If the exact amount is not in the table, use the next smaller figure - see the following examples.

If your employee earns £90.00 per week or £390.00 per month or more, you must keep a record of their earnings, even where no NICs are due.

See:

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Completing the P11 - NICs

Example 1 – paying weekly

  • You pay an employee £201.92 on 30 May 2008, for the week. This is week number 8.
  • Look at Weekly Table A to find the next smaller figure, which in our example is £201.00
  • Copy the figures from columns 1a to 1e of Weekly Table A to columns 1a to 1e of form P11.

Extract from Weekly Table A (PDF 133K)

Example 2 – paying monthly

  • You pay an employee £900.50 on 30 May 2008, for the month. This is month number 2.
  • Look at Monthly Table A to find the next smaller figure, which in our example is £898.00
  • Copy the figures from columns 1a to 1e of Monthly Table A to columns 1a to 1e of form P11.

Extract from Monthly Table A (PDF 133K)

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Using a tax code

Tax codes

Whether you are using a P45 or P46 you must now consider deducting tax.

First of all you will need to know how to use the tax code for your employee.

A tax code is usually made up of one or more numbers followed by a letter. The number indicates the amount of pay an employee is allowed to earn in the tax year before tax becomes payable.

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Which tax code?

L, P, T, V or Y codes not followed by week 1, month 1 or X

These tax code numbers are called 'cumulative' code numbers. This means that you will be working on a running total basis of 'total pay to date' at each pay day.

If you are using one of these codes and calculating tax using the tables go to 'Code numbers with L, P, T, V or Y codes not followed by week 1, month 1 or X'

L, P, T, V or Y codes followed by week 1, month 1 or X

These tax code numbers are not 'cumulative' code numbers. They are known as week 1/month 1 codes. If week 1/month 1, or an 'X' is written after the tax code this means that instead of keeping a running total of the pay to date, you treat each pay day as if it is the first week or month of the tax year.

If you are using one of these codes and calculating tax using the tables go to 'Code numbers with L, P, T, V or Y followed by week 1, month 1 or X'

Code BR - Basic rate (BR)

For an employee with a tax code BR you must deduct tax from all their pay at the basic rate – currently 20 per cent. You can operate code BR either on a cumulative basis, which means that you will be working on a running total basis of 'total pay to date' at each pay day.

If you are using one of these codes and calculating tax using the tables go to 'Code BR not followed by week 1, month 1 or X'

  • week 1/month 1 basis. If code BR is followed by week 1, month 1 or X - this means that you must operate the code on a 'non-cumulative' basis. Instead of keeping a running total of the pay to date, you must treat each pay day as if it is the first week or month of the tax year.

If you are using one of these codes and calculating tax using the tables go to 'Code BR followed by week 1, month 1 or X'

Code numbers with L, P, T, V or Y not followed by week 1, month 1 or X

Working out the tax due (cumulative)

The easiest and quickest way to work out the amount of tax to deduct is to use the PAYE Tax Calculator on your Employer CD-ROM. The PAYE Tax Calculator will work out the tax due for you and provide you with the figures to enter in columns 2 to 8 of your P11.

You will find the PAYE Tax Calculator in the 'Calculator' section of your CD-ROM. An example of a completed form P11 (PDF 71K) is shown.

If you are not using your Employer CD-ROM you will need to continue to work through this book and calculate the tax manually using the tax tables.

You will now have to fill in columns 2 to 8 on the P11. Use the same week or month number you used for the NICs entries.

We will work through an example using the following details:

  • pay day = 30 May 2008
  • tax week = 8
  • pay = £201.92
  • P45 details
    • Item 6 code = 510L
    • Item 7 'Total pay to date' = £1,546.15
    • Item 7 'Total tax to date' = £ 171.60

The columns you will use on the P11 for these codes are 2, 3, 4a, 5, 6 and 7.

Column 2 Pay in the week or month

Enter the pay for the pay day in column 2 at the appropriate week or month.

Example: Week 8 pay = £201.92

Column 3 Total pay to date

Column 3 is for the total pay to date, which includes pay from any previous employment your employee may have had during the tax year.

If you have a form P45 see if there is an amount at item 7 'Total pay to date'. If there is:

  • copy the figure onto the line in column 3 above the line you are using for the pay day
  • add the amount that you are paying your employee to the 'Total pay to date' figure
  • put the new total in column 3, next to the pay for the pay day in column 2

If there is no entry at item 7 'Total pay to date' on the P45 or you and your employee have completed form P46, copy the figure from column 2 of the P11 to column 3 on the line for the pay day.

Example:
P45 item 7 'Total pay to date' is £1,546.15
so the entry at week 7 is £1,546.15

The entry at week 8 is
£1,546.15 + £201.92 = £1,748.07

Column 4a Total 'free pay' to date

Use the Tables A, Pay Adjustment Tables as follows (the weekly tables come before the monthly tables)

  • find the page for the week or month that includes the date of the pay day
  • find your employee's tax code
  • enter the figure shown in the 'total pay adjustment' column in column 4a of the P11

Example

Code 510L gives free pay £786.08 at week 8.

For codes over 500 you must use the instructions in the box at the bottom of the page to calculate the free pay to date.

Week 8 adjustment for code 500 is £769.28
Week 8 figure for code 10 (510–500) = £16.80
Total pay adjustments for week 8 = £769.28 + £16.80 = £786.08

Column 5 Total taxable pay to date

Now work out how much of your employee's pay is taxable. To do this:

  • deduct the figure in column 4a from the figure in column 3
  • enter the result in column 5

If the amount in column 4a is more than the amount in column 3 leave column 5 blank.

Example: £961.99 (£1,748.07 minus £786.08)

Column 6 Total 'tax due' to date

Look at the amount in column 5.

If this is blank check that column 4a is more than the amount in column 3. If it is, put 'Nil' in column 6.

If there is an amount in column 5 you now need to work out the tax due. Use the Taxable Pay Tables, Calculator Method.

The table that you will need depends on:

  • how much total taxable pay is shown in column 5 on the P11
  • whether you pay your employee weekly or monthly

For weekly pay turn to pages 3 and 4 in the 'Taxable Pay Tables, Calculator Method'.

For monthly pay turn to page 5 in the 'Taxable Pay Tables, Calculator Method'.

  • find the week or month number for your employee's taxable pay.
  • Go to Section A of the Weekly paid – Calculator Tables or Monthly paid – Calculator Tables as appropriate.
  • follow the guidance given there

If you have a problem, call the New Employer Helpline.

When you have worked out the tax due enter this amount in column 6 on the line for the week or month that includes the pay day.

Example: Tax due on £961.99 = £192.20

Working out

£961.99 round down to £961.00
£961 x 0.20 (20%)= £192.20

Now look at the P45 from your employee. You must check the 'Total tax to date' figure is correct by following the 'Check Tax' instructions above.

Enter the figure provided by the P45 checker/New Employer Helpline into column 6 on the line above the figure you have just entered.

Then compare the two figures in column 6 and move on to column 7.

Column 7 Tax deducted or refunded

If the figure in column 6 for the pay day is:

  • more than the figure on the line above, take away the amount on the line above from the figure for the pay day and put the result in column 7 – this is the amount of tax to take off your employee's pay
  • the same as the figure on the line above, or if both are Nil, put 'Nil' in column 7
  • less than the figure on the line above, put the difference in column 7 – plus the letter 'R'. This means a refund is due – you'll have to call the New Employer Helpline

In our example, the figures will appear on the P11 (PDF 71K) like this.

Now that you have completed your P11 turn to 'what next - paying your employees' to find out what to do next.

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Code numbers with L, P, T, V or Y followed by week 1, month 1 or X

Working out the tax due (week 1/month 1)

The easiest and quickest way to work out the amount of tax to deduct is to use the Tax Calculator on your Employer CD-ROM. The Tax Calculator will work out the tax due for you and provide you with the figures to enter in columns 2 to 8 of your P11.

You will find the Tax Calculator in the 'Calculator' section of your CD-ROM. An example of a completed form P11 (PDF 54K) is shown.

If you are not using your Employer CD-ROM you will need to continue to work through this book and calculate the tax manually using the tax tables.

You will now have to fill in columns 2 to 8 on the P11. Use the same week or month number you used for the NICs entries.

We will work through an example using the following details:

  • pay day = 30 May 2008
  • tax week = 8
  • pay = £201.92
  • P45 details
    • Item 6 code = 543L week 1

The columns that you will use on the P11 for these codes are 2, 4a, 5 and 7.

Week 1, month 1 or X after the letter part of the code number means that each pay day should be treated as if it is the first week or month of the tax year.

Entries on the P11 however, should still be made on the line for the week or month that includes the pay day.

Column 2 Pay in the week or month

Enter the pay for the pay day in column 2 at the appropriate week or month.

Example: Week 8 pay = £201.92

Column 4a Total 'free pay' to date

Use the Tables A, Pay Adjustment Tables as follows (the weekly tables come before the monthly tables)

  • find the page for week 1 or month 1
  • find your employee's tax code
  • enter the figure shown in the 'total pay adjustment' column in column 4a of the P11

Example:

Code 543L week 1 gives free pay of £100.57

For codes over 500 you must use the instructions in the box at the bottom of the page to calculate the free pay to date.

Week 1 adjustment for code 500 is £96.16
Week 1 figure for code 43 (543– 500) = £8.45

Total pay adjustments for week 1 = £96.16 + £8.45 = £104.61

Column 5 Total taxable pay to date

Now work out how much of your employee's pay is taxable. To do this:

  • deduct the figure in column 4a from the figure in column 2
  • enter the result in column 5.

If the amount in column 4a is more than the amount in column 2 leave column 5 blank.

Example: £97.31 (£201.92 minus £104.61)

Column 7 Tax deducted or refunded

Look at the amount in column 5.

If this is blank no tax is due in the week or month.

If there is an amount in column 5 you now need to work out the tax due. Use the 'Taxable Pay Tables, Calculator Method'.

The table that you will need depends on:

  • how much total taxable pay is shown in column 5 on the P11
  • whether you pay your employee weekly or monthly

For weekly pay turn to pages 3 and 4 in the 'Taxable Pay Tables, Calculator Method'.

For monthly pay turn to page 5 in the 'Taxable Pay Tables, Calculator Method'.

  • find the week or month number for your employee's taxable pay
  • go to Section A of the Weekly paid – Calculator Tables or monthly paid – Calculator Tables as appropriate
  • follow the guidance given there

If you have a problem, call the New Employer Helpline.

When you have worked out the tax due enter this amount in column 7 on the line for the week or month that includes the pay day.

Example:
Tax due on £97.31 = £19.40

Working out:
£97.31 round down to £97
£97 x 0.20 (20%)= £19.40

This is the amount of tax to take off from your employee's pay.

In our example, the figures will appear on the P11 (PDF 50K) like this.

Now that you have completed your P11 turn to 'what next - paying your employees' to find out what to do next.

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Code BR not followed by week 1, month 1 or X

Working out the tax due (cumulative)

The easiest and quickest way to work out the amount of tax to deduct is to use the PAYE Tax Calculator on your Employer CD-ROM. The PAYE Tax Calculator will work out the tax due for you and provide you with the figures to enter in columns 2 to 8 of your P11.

You will find the PAYE Tax Calculator in the 'Calculator 'section of your CD-ROM. An example of a completed form P11 ( PDF 132K) is shown.

If you are not using your Employer CD-ROM you will need to continue to work through this book and calculate the tax manually using the tax tables.

You now have to fill in columns 2 to 8 on the P11. Use the same week or month number you used for the NICs entries.

We will work through an example using the following details:

  • pay day = 30 May 2008
  • tax week = 8
  • pay = £201.92
  • P45 details
    • Item 6 code = BR
    • Item 7 'Total pay to date' = £1,346.15
    • Item 7' Total tax to date' = £ 269.20

The columns that you will use on the P11 for code BR are 2, 3, 6 and 7.

Column 2 Pay in the week or month

Enter the pay for the pay day in column 2 at the appropriate week or month.

Example: Week 8 pay = £201.92

Column 3 Total pay to date

Column 3 is for the total pay to date, which includes pay from any previous employment your employee may have had. 

If you have a form P45 see if there is an amount at item 7 'Total pay to date'. If there is, 

  • copy the figure onto the line in column 3 above the line you are using for the pay day
  • add the amount that you are paying your employee to the 'Total pay to date' figure
  • put the new total in column 3, next to the pay for the pay day in column 2.

If there is no entry at item 7 'Total pay to date' on the P45 or you have completed form P46, copy the figure from column 2 of the P11 to column 3 on the line for the pay day.

Example:

P45 item 7 'Total pay to date' is £1,346.15
so the entry at week 7 is £1,346.15

The entry at week 8 is £1,346.15 + £201.92 = £1,548.07

Column 6 Total tax due to date

You now need to work out the tax due. Use the 'Taxable Pay Tables, Calculator Method'.

For weekly pay turn to pages 3 and 4 in the 'Taxable Pay Tables, Calculator Method'.

For monthly pay turn to page 5 in the 'Taxable Pay Tables, Calculator Method'.

Follow the guidance given there.

If you have a problem, call the New Employer Helpline.

Put the combined amount of tax, shown in the tables, in column 6 of the P11 on the line for the week or month that includes the pay day.

Example: Tax due on £1,548.07 = £309.60

Working out:
£1548.07 round down to £1548
£1548 x 0.20 (20%)= £309.60

Column 7 Tax deducted or refunded

Before you complete this look at the P45 from your employee. You must check the 'Total tax to date' figure is correct by following the 'Check Tax' instructions.

Enter the figure provided by the P45 checker/New Employer Helpline into column 6 on the line above the figure you have just entered.

Then take away the amount on the line above from the figure for the pay day and enter the total in column 7.

This is the amount of tax to deduct from your employee's pay.

In our example, the figures will appear on the P11 (PDF 132K) like this.

Now that you have completed your P11 turn to 'what next - paying your employees' to find out what to do next.

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Code BR followed by week 1, month 1 or X

Working out the tax due (week 1/month 1)

The easiest and quickest way to work out the amount of tax to deduct is to use the PAYE Tax Calculator on your Employer CD-ROM. The PAYE Tax Calculator will work out the tax due for you and provide you with the figures to enter in columns 2 to 8 of your P11.

You will find the PAYE Tax Calculator in the 'Calculator' section of your CD-ROM. An example of a completed form P11 (PDF 162K) is shown.

If you are not using your Employer CD-ROM you will need to continue to work through this book and calculate the tax manually using the tax tables.

You now have to fill in columns 2 to 8 on the P11. Use the same week or month number you used for NICs entries.

We will work through an example using the following details:

  • pay day = 30 May 2008
  • tax week = 8
  • pay = £201.92
  • P45 details
    • Item 6 code = BR week 1

The columns that you will use on the P11 for this code are 2 and 7.

Week 1, month 1 or X after the code number means that each pay day should be treated as if it is the first week or month of the tax year.

Entries on the P11 should however still be made on the line for the week or month that includes the pay day.

Entries on the P11 should however still be made on the line for the week or month that includes the pay day.

Column 2 Pay in the week or month

Put the pay for the pay day in column 2 at the appropriate week or month.

Example: Week 8 pay = £201.92

Column 7 Tax deducted or refunded

Now work out the tax due. Use the Taxable Pay Tables, Calculator Method.

For weekly pay turn to pages 3 and 4 in the 'Taxable Pay Tables, Calculator Method'.

For monthly pay turn to page 5 in the 'Taxable Pay Tables, Calculator Method'.

Follow the guidance given there.

If you have a problem, call the New Employer Helpline.

Put the combined amount of tax, shown in the tables, in column 7 of the P11 on the line for the week or month that includes the pay day.

This is the amount of tax to deduct from your employee's pay.

Example:

£201.92 round down to £201
£201 x 0.20 (20%)= £40.20

In our example, the figures will appear on the P11 (PDF 162K) like this.

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What next? – Paying your employees

What do I do next?

You have now worked out how much NICs and tax to deduct from your employee's pay, and made a record of the information. The next step is to work out how much pay to give your employee.

If you've followed the guidance in this booklet:

  • take the figure from column 2 of the P11, 'pay in the week or month' - this is 'gross pay'
  • from the 'gross pay' take off the figure from column 1e of the P11 (Employee's contributions due on all earnings above the ET), and the figure from column 7 of the P11, 'Tax deducted or refunded in the week or month'

The result is the amount to give your employee.

Using 'example 1 - paying weekly' (PDF 133K) and 'column 7, tax deducted or refunded' (PDF 63K), the amount to give to the employee would be £170.71.

Example:

Gross pay = £201.92
minus Employee National Insurance contributions £10.61
minus Tax deducted or refunded in the week or month £20.60
Total = £170.71

Wage/payslips

By law, every pay day you must give your employee a written record of pay and deductions, including

  • gross pay
  • employee's NICs deducted
  • tax deducted.

And at the end of the year you must give your employee a record showing the details for the whole year. See 'end of year'

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Paying HMRC

Working out and recording payments

To work out what you have to pay to HMRC add together the:

  • employee NICs
  • employer NICs
  • tax
  • student loan deductions

Then take off any amount that you have had to refund.

You can use the form P32(2008) Employment Payment Record (PDF 29K) to work out and record your total monthly payments. Keeping records on form P32(2008) should make it easier for you to work out your monthly payments.

You will find a copy of the P32(2008) in your New Employer Starter Pack. It is also available

  • in the 'Forms & Helpbooks' section of your Employer CD-ROM
  • from the Employer Orderline Tel 0845 76 46 646
  • if you use the P11 Calculator on the CD-ROM there is a P32 Summary that will record all the tax and NI for you. It will also advise you how much tax and NICs is payable to HMRC each tax month or quarter, if you pay quarterly.

Making a payment

We accept payment by a range of methods but recommend that you pay electronically. If you pay electronically or through your bank or Post Office, your cleared payment for the full amount must reach our account no later than the 22nd of the month. Where the 22nd falls on a weekend or is a bank holiday, your cleared funds must reach us on the previous bank working day.

When paying electronically you need to allow enough time for your payment to reach us. You will need to check how long your bank or building society takes and what their cut-off time is for initiating payment.

The Accounts Office will have automatically sent you your payslip booklet when you first registered as an employer. If you wish to pay by cheque you will need to complete a payslip from your payslip booklet and send it to your HMRC Accounts Office together with payment for the tax, NICs and Student Loan deductions you have deducted. You must ensure that we receive payment no later than 19th of the month if you pay by cheque.

For further information about how to pay please see Payment of PAYE or the Employer Helpbook E13(2008).

No payment due in a tax month

If, at the end of the month/quarter you have no payments to make, tell your HMRC Accounts Office by either:

  • completing the form at No PAYE/NICs Payment Due. The online form is a new service and is the most convenient and cost effective way to let us know that no payment is due
  • returning a signed payslip, form 30B, for the correct month marked 'NIL' due
  • phoning 0845 366 7816 to advise you have no PAYE/NICs payment to make for a particular month, quoting your Accounts Office reference number

Quarterly payment option

If your average monthly payments are likely to be less than £1,500.00 you can choose to pay your Accounts Office quarterly.

For more information about making payments:

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Other things you may need to know

Do it online

There are lots of ways you can do business with us online during the tax year. PAYE Online for Employers is a secure, convenient and quick way to send and receive day to day information about your employees. It is more reliable and efficient than using paper, and can cut down on storage space, post and administration.

Doing it online can also bring benefits for your employees, such as reduced waiting times for the correct tax code and quicker updates to pensions and benefits records at the end of the tax year.

You can send and receive forms and Returns online using:

  • the internet (suits all employers), choose either:
    – our free 'Online Return and Forms' product, or
    – third party software
  • Electronic Data Interchange (EDI) (more suitable for large employers)
  • alternatively an agent or payroll bureau can file online on your behalf using our 'PAYE Online for Agents' service.

Employers with 50 or more employees have to file their Annual Return (P14s and P35) online. They will have to do the same for in-year forms P45 and P46 and similar pension notifications from April 2009.

Under government proposals employers with fewer than 50 employees will have to file their Employer Annual Returns (P14s and P35) online by 2010. From April 2011 they will also have to file some in-year information such as employee starter and leaving details (forms P45 and P46) online as well.

Before you can file online you need to register with us. Our team of online filing 'recruiters' have developed a range of products to help you. We can support you over the phone, or in our workshops and presentations, and take you through the registration process step by step. After you have registered, we can give you all the help you may need to send your forms online. To find out what help is available in your area, Tel 0133 27 24 410 or go to Doing PAYE online all year round

For more information

  • refer to your Employer CD-ROM – it has a learning package giving step by step guidance on all aspects of PAYE Online
  • PAYE Online for Employers

Tax code changes

During the year your HMRC office may send to you form P6, if:

  • there is a change to an employee's tax code
  • you have to add in the employee's pay and tax from their last employer

For further information see booklet E13 Day to day payroll which is available from the

  • 'Forms & Helpbooks' section of your Employer CD-ROM
  • Employer Orderline on Tel 0845 76 46 646

Employee leaves

If an employee leaves your employment you'll need to complete a form P45 (PDF 64K). You can get a supply from the Employer Orderline. See the Order Form for details.

For further information see booklet E13 Day to day payroll which is available from the

  • 'Forms & Helpbooks' section of your Employer CD-ROM
  • Employer Orderline on Tel 0845 76 46 646

If you have used the P11 Calculator on your Employer CD-ROM for your employee, an in-year leaver summary is provided that will have all the information you will need to complete the P45

End of year

You'll have further jobs to do at the end of the tax year (PDF 156K).

For example, you will have to send to HMRC a summary of all NICs and tax you have deducted during the year.

You do this on a P35 Employer Annual Return, which we will automatically send to you when you need it.

You will also need to complete a form P14(2008–09) End of Year Summary for each employee for whom you have been required to complete a P11 Deduction Working Sheet. Use these to record your employees' end of year details and then send them to HMRC.

You must complete a P60(2008–09) and give this to your employee. If you are using a paper form P14 this is the last part of the P14 End of Year Summary.

It is very important that you use the right forms for the year. We will tell you when the forms are available from the Employer Orderline.

If you have fewer than 50 employees you may receive money back tax-free from us if you file your Employer Annual Return (P14s and P35) online. For more information about our online services see 'Do it Online'

We will send to you more detailed information about End of Year procedures in your Employer Pack for 2008, issued before the end of the 2007-08 tax year.

How long to keep records

You must keep the following forms for at least three years after the end of the tax year to which they relate:

  • forms P11 and any pay records. This applies even if an employee does not pay any PAYE or NICs in the tax year, but you have completed a form P11 to keep records of earnings
  • forms P38(s) including those relating to students for whom a form P14 has been prepared
  • forms SL1 and SL2, Start and Stop notices in respect of Student Loan deductions

Top 

Further help and guidance

You may need further help and guidance not only when you take on your first employee, but also as your business develops.

We offer a range of help to suit all needs and will support you every step of the way.

We'll work with you to get your payroll started and support you through any problems that you may encounter.

Help and further guidance is available from the following sources:

The internet

Go to 'Employers pages'.

Your Employer CD-ROM

Your Employer CD-Rom is in your New Employer Pack

The CD-ROM has:

  • a P11 Calculator that will work out and record your employee's PAYE tax, NICs and any Student Loan deductions every pay day. It also has a linked P32 record of deductions that works out what you need to pay us. Using the P11 Calculator is the easiest and quickest way to work out tax and NICs
  • a 'Payroll Basics' section for new and less experienced employers explaining what to do when employing someone for the first time
  • a Learning Zone to help you understand payroll topics for example, tax and NICs
  • copies of most forms, helpbooks and guidance

By phone

New Employer Helpline. Our Helpline Advisers are dedicated specifically to helping new employers just like you. They will not confuse you with technicalities and jargon. Their aim is to help you meet your obligations correctly first time.

Phone 0845 607 0143
Monday to Friday 8am - 8pm
Saturday and Sunday 8am - 5pm

If you have a hearing or speech impairment, and use a textphone 0845 602 1380.

Your HMRC office

Your own HMRC office can also help you. All our office contact details are available at Contact an Area / Local Office for Employers.

When contacting us please tell us your Employer reference. You will find it on correspondence from your HMRC office.

If your enquiry is about one of your employees, you must tell us their NINO.

Employer Helpbooks

Our Employer Helpbooks will help you understand and operate PAYE, NICs and other payroll related matters.

The Helpbooks are for guidance only, they are not comprehensive and have no legal force.

You can view, download and print the full range of Helpbooks, booklets and other forms and guidance from:

You can order copies from the Employer Orderline

For details of employer forms and guidance in Braille, large print or audio call the Employer Orderline on Tel 0845 764 6646 and ask to speak to the Customer Service Team.

Yr Iaith Gymraeg
Ffoniwch 0845 302 1489 i dderbyn fersiynau Cymraeg o ffurflenni a chanllawiau.

In person

We can offer you education and support on all aspects of your payroll explaining:

  • what you need to do
  • the deadlines you need to meet
  • the forms you need to fill in
  • the records you need to keep

We also have a range of workshops which are free of charge on many payroll topics - including 'Paying your employees' based on the Employer CD-ROM and 'Calculating NICs for Directors'.

Further information is available at HMRC Advice Teams or by calling the New Employer Helpline on Tel 0845 607 0143.

Online Services

For information about our online services go to Online Services

For help and assistance using our online service contact the Orderline Services Helpdesk:

  • go to our website
  • email
  • Tel 0845 605 5999 open from 8.00 am - 8.00 pm Monday to Sunday