How do you pay the tax and National Insurance contributions you owe?
If you’re working for an employer, you don’t have to do anything - your tax and National Insurance contributions will be taken off your wages and sent to HM Revenue & Customs. This happens every week or every month, depending on when you get paid. It’s called Pay As You Earn (PAYE) – this means the money that you owe is spread out over the year so you don’t have to pay your tax all in one go.
PAYE works on an annual basis but the year for tax is not the same as a calendar year. A tax year starts on 6th April and ends on 5th April the following year.
We send a tax code to your employer and this tells them how to work out how much tax to deduct from your wages.
You may decide to work for yourself. People who work for themselves are called ‘self-employed’. If you become self-employed, you’ll be responsible for paying your own tax and National Insurance contributions. Find out more about that in What happens if you want to work for yourself?
