There are no special procedures to follow when an employee takes a leave of absence. The individual remains an employee of your business and stays on your payroll. So there is no need to enter a date of leaving on their payroll record or give them a form P45, as would be the case if they were leaving permanently.
You should continue to operate PAYE as normal, deducting tax and National Insurance contributions from any payments that you make to the employee while they are on leave, complete their payroll record, and report their information to HM Revenue & Customs (HMRC) in the usual way. This includes statutory pay received by employees on maternity, paternity or adoption leave, as well as Statutory Sick Pay.
If an employee is to be paid on an irregular basis, or not paid for a period of three months or more, you must set the irregular payment pattern indicator on their payroll record so this is reported to HMRC. Do this the last time you report their payroll information on a Full Payment Submission (FPS) before the start of the period in which they won't be paid - otherwise HMRC will assume that they have left your employment. If you continue to operate payroll for this employee to enable tax repayments, then you should ensure the irregular payment pattern indicator stays on their payroll record so it is reported to HMRC with every FPS.
Remember that at the end of the tax year you will also have to report any benefits - such as a company car or medical insurance - that you continue to provide to an employee while they're on a leave of absence.
Payroll - calculating, reporting and paying employees
