In this section:
You complete a form P11 Deductions Working Sheet or equivalent payroll record for each employee to record their pay and deductions for tax, National Insurance contributions (NICs), and any student loan repayments or statutory payments.
This guide sets out the steps involved in updating a paper form P11. However, you can also keep your payroll records in an electronic format, using commercial payroll software (some of which is free) or the free downloadable P11 Calculator which is part of the HM Revenue & Customs (HMRC) Basic PAYE Tools package.
Almost all employers are now required to file their Employer Annual Return (P35 and P14s) online at the end of the tax year, and a significant advantage of keeping electronic payroll records is that it allows you to transfer your P11 payroll figures automatically to your annual return. If you use paper P11s you can still file online, but you'll need to copy the figures across manually.
To work out the figures you need when updating a paper form P11 you can use either HMRC's PAYE (Pay As You Earn) and NICs calculators or manual tax tables.
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If you're currently completing paper P11s for your employees, HMRC recommends that you switch instead to keeping electronic payroll records by using either commercial payroll software (some of which is free) or HMRC's free downloadable P11 Calculator within the Basic PAYE Tools package.
These software tools complete many of your payroll calculations automatically for you and they make filing your Employer Annual Return (P35 and P14s) online easier - a significant benefit because almost all employers are required to file their Employer Annual Return online.
If you decide to continue keeping paper P11s you must still file your Employer Annual Return online, but to do this you'll have to manually transfer the figures from your paper forms across to the software or online service you use to file your return.
Where to get HMRC's free P11 Calculator
A set of Basic PAYE Tools are now available to download straight to your computer. In addition to the P11 Calculator, the tools include:
Improving the operation of PAYE: Real Time Information (RTI)
Filing your Employer Annual Return: P35 and P14s
Using commercial payroll software or HMRC's downloadable P11 Calculator
Download Basic PAYE Tools from the Business Link website (Opens new window)
You can:
You'll need to set up the P11 Deductions Working Sheet with basic employee and employer details.
Taking care to make sure you send HMRC the correct information about your employees will save you time by reducing the number of employee queries you get, as well as helping to make sure that your employees pay the correct tax and NICs.
Over 80 per cent of problems are caused because the wrong information is held about an employee's name, date of birth or National Insurance number.
Name - Make sure that you use the full name and not just the initial(s). Ensure that the forename(s) and surname are correctly spelled and that they are in the right order.
Date of birth - Always use the correct date of birth. Do not use a default date or make one up.
National Insurance number - Always use the correct National Insurance number. Do not make a number up or use someone else's.
Wherever possible, check the information with a trusted official source such as a birth certificate or passport
Enter the details in the boxes at the top of the P11 as follows:
If your employee doesn't have all the information you need to set up the P11, read the related guidance 'Taking on a new employee - first steps'.
Taking on a new employee - first steps
Each time you pay an employee you'll need to record their pay and deductions details in the different columns on their P11 Deductions Working Sheet.
These entries are separated as follows:
| Column | Description |
|---|---|
| Column 1a | Earnings at the Lower Earnings Limit (LEL) (where earnings are equal to or more than the LEL) |
| Column 1b | Earnings above the LEL up to and including the Earnings Threshold (ET) |
| Column 1c | Earnings above the ET up to and including the Upper Accruals Point (UAP) |
| Column 1d | Earnings above the UAP, up to and including the Upper Earnings Limit (UEL) |
| Column 1e | The total of employee's and employer's contributions, marking any minus amounts with 'R' |
| Column 1f | Employee's contributions due on all earnings above the ET |
| Column 1g | Statutory Sick Pay (SSP) |
| Column 1h | Statutory Maternity Pay (SMP) |
| Column 1i | Statutory Paternity Pay (SPP) |
| Column 1j | Statutory Adoption Pay (SAP) |
| Column 1k | Student Loan Deductions (SLD) |
| Column 2 | Pay in the week or month, including statutory payments (SSP/SMP/SPP/SAP) |
| Column 3 | Total pay to date |
| Column 4a | Total 'free pay' to date (as shown by Tables A) |
| Column 5 | Total taxable pay to date (the amount in Column 3 minus the amount in Column 4a or Column 3 plus Column 4b as applicable) |
| Column 6 | Total tax due |
| Column 7 | Tax deducted or refunded in the week or month, marking refunds with 'R' |
| Column | Description |
|---|---|
| Column 4b | Total additional pay to date (as shown by Tables A) |
| Column 6a | Tax due at the end of the current week or month, marking refunds with 'R' |
| Column 6b | The regulatory limit of 50 per cent of the amount in Column 2 |
| Column 8 | Tax not deducted owing to the regulatory limit |
The final unnumbered column is for your own use. You can use it to record net pay. This is pay (from Column 2) minus deductions - it's the amount your employee actually gets each week or month.
You can find out more about how to record information on P11 in HMRC's Employer Helpbook E13, 'Day-to-day payroll'.
Download Employer Helpbook E13 'Day-to-day payroll' (PDF 413K)
You can work out the various figures for tax and NICs either using the free tax and NICs calculators available on the HMRC website, within HMRC's Basic PAYE Tools package, or manually using the tax and NICs tables. Read our related guidance to check the detail – follow the links below.
Calculating PAYE deductions (paper methods)
Calculating NICs deductions (paper methods)
Calculating student loan deductions
Marginal items of pay - when to include them in your payroll calculations (PDF 24K)
The P11 looks like a spreadsheet. It has rows that correspond with the tax weeks or months. The month number is on the far left hand side of the spreadsheet and the week number is in the column next to it.
To make sure you enter the information in the right line, you'll need to find out which tax week or month corresponds with that particular pay day. You can find this information in the table that's included in HMRC's Employer Helpbook E13, 'Day-to-Day Payroll'. Because PAYE operates on a cumulative basis, it's important to use the correct week or month - this will determine the allowances due to your employee and the tax that's payable.
Download Employer Helpbook E13 'Day-to-day payroll' (PDF 413K)
At the end of the tax year you'll need to complete the P11 by:
You'll need this information to complete your Employer Annual Return (P35 and P14s).
