Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Pay As You Earn definition

What does Pay As You Earn mean? Pay As You Earn (PAYE) is the payroll withholding system by which employers and pension providers deduct tax and related social insurance amounts from salaries, wages and pensions at source and remit them to the tax authority. United Kingdom (England & Wales, Scotland, Northern Ireland): PAYE is governed principally by the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) and administered by HMRC. Deductions include income tax and employee national insurance contributions, and the PAYE mechanism is also used for items such as student loan repayments and, where applicable, payrolled benefits. Employers and pension payers must operate...

UK PAYE: scope and operation across employers, employees and intermediaries; treatment of earnings, benefits, disguised remuneration, expenses and employment-related securities; thresholds, RTI reporting and HMRC security powers

Published by a LexisNexis Tax expert

Practice notes

$imgtext$

Pay As You Earn (PAYE)

The PAYE system is the mechanism by which an employer or pension provider withholds specified statutory deductions from an employee’s pay or a pensioner’s income. These comprise:

deductions towards the employee’s income tax liability
National insurance contributions (NICs)
other pay-related deductions such as student loan repayments

In effect, PAYE is HMRC’s approach to collecting income tax and NICs from individuals on an ongoing basis, instead of requiring everyone to complete a tax return to notify HMRC of what they owe.

PAYE is not a precise calculation of an employee’s tax liability; it is an approximation of the tax the employee should pay, derived from HMRC’s view of the pay and benefits they are expected to receive. The tax is worked out using notices of coding that HMRC issues to employers and pension providers.

The PAYE system is also the route through which employers must make any apprenticeship levy payments. For further detail, see Practice Note: Apprenticeship levy. This Practice Note sets out when PAYE must be operated, and the persons and types of payment to which it applies...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...