First report - checking your payroll records match with HMRC's

HM Revenue & Customs (HMRC) matches your employee details with the records they hold on your employees. HMRC refers to this as payroll alignment. All existing employers operating PAYE (Pay As You Earn) must pass through this matching process when they change to reporting payroll information in real time. For most employers this will happen automatically when they send their first Full Payment Submission (FPS).

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How HMRC check their payroll records match with yours (payroll alignment)

HMRC matches the employee details on your first FPS against the records it holds for employees within your unique PAYE reference number. This is called payroll alignment. In some instances, HMRC may ask you to submit a separate submission called an Employer Alignment Submission (EAS) before you submit your first FPS. See the section in this guide 'When to submit an EAS' for details.

If your first report is an Employer Payment Summary (EPS), because you haven't paid anyone and need to tell HMRC, the payroll alignment won't be completed until you send your first FPS (or EAS if you do one).

It's important that the information you provide on these submissions is right - if it's wrong it will cause problems for you and HMRC, and your employees may be affected too. Read the guide 'Information you must get right when running your payroll'. It will help you avoid making mistakes. There's a link to this at the end of this guide.

Information you must get right when running your payroll

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When to submit an EAS

You must submit an EAS if you're a large employer or you have a complex payroll system; you must submit your employee records in an EAS before you submit your first FPS.

You submit an EAS if:

  • you have a large PAYE scheme with over 250 employees
  • your PAYE scheme is 'split' because you have different payroll providers, two or more payroll systems - for example monthly and weekly - or you can't make a single FPS submission because of bandwidth restrictions

If neither of these applies you submit your employee records for payroll alignment when you send your first FPS, although you can choose to submit a separate EAS if you wish. If you are an employer with fewer than 250 employees and you choose to do this, you must still send in your EAS (either in one submission or all the parts) before you send your first FPS.

Wherever possible you should submit your employee records in a single EAS after the date on the letter HMRC sends you. However, employers operating 'split' PAYE schemes can submit an EAS in parts. This could be because they run separate weekly and monthly payrolls or because they run part of their payroll 'in house' and use a bureau or other provider for other parts - for example, to run a payroll for the directors. You can only submit an EAS (either as one submission or in parts) once - and it can't be amended once it's submitted. See the next section in this guide, 'What information to submit in an EAS'.

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How to submit an EAS

Your payroll software will connect to HMRC electronically and send reports when you ask it to. Sending an EAS is the same as sending any other payroll report - your payroll software should make it clear how to do this. If in doubt, check with your payroll provider.

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