Work out your take-home pay
Income tax, National Insurance and net pay for any UK salary, 2026-27.
More than two million PAYE schemes operate across the UK, and every one of them relies on HMRC PAYE Online at some point in the payroll cycle [13]. Once an employer registers, HMRC posts an activation code within ten days, and that code must be used within twenty-eight days of the date on the letter or it expires [2].
PAYE Online is the free HMRC service that sits behind every UK employer's payroll. It is where an employer sees what is owed, reads the tax code notices HMRC issues for each worker, and receives alerts when a report or payment is late. It is not payroll software in itself, and understanding that distinction is the single most useful thing a new employer can learn about it.
This guide explains what PAYE Online does, how to register and activate an account, what an employer can and cannot do inside the service, and how it works alongside HMRC-recognised payroll software to keep a scheme compliant under Real Time Information.
Key takeaways
- PAYE Online is a free HMRC service for viewing balances, tax code notices and late alerts, not a tool for calculating pay.
- An employer is enrolled automatically when it registers as an employer online, and HMRC posts an activation code within ten days.
- The activation code must be used within twenty-eight days of the letter date, or the employer has to request a new one.
- Payroll software, not PAYE Online, sends the Full Payment Submission and Employer Payment Summary that report pay to HMRC.
- PAYE Online is where tax code notices such as P6, P9 and SL1 are delivered, and where the amount owed each month appears from the tenth.
- An agent can be authorised to see and manage a scheme, which is how most accountants and bureaux operate.
What PAYE Online actually is
PAYE Online for employers is the online account through which HMRC communicates with an employer about its payroll scheme [1]. It is reached by signing in through the Government Gateway, the same credential system that covers most HMRC online services [3].
The service has a specific and limited job. It lets an employer send some payroll information to HMRC, view the balance of what the scheme owes, access tax codes and notices about employees, and receive alerts when the employer reports or pays late, or fails to send the expected number of reports in a month [1]. It does not calculate anyone's pay, tax or National Insurance. That work belongs to payroll software.
The line between PAYE Online and payroll software
The most common confusion for a first-time employer is assuming PAYE Online runs the payroll. It does not. Under Real Time Information, the actual pay data reaches HMRC through a Full Payment Submission generated by payroll software on or before each payday [7]. PAYE Online is the window an employer looks through afterwards to check the result, read HMRC's instructions and see the bill.
The table below separates the two roles, because getting them straight prevents most of the setup mistakes new employers make.
| Task | PAYE Online | Payroll software |
|---|---|---|
| Calculate tax, NI and statutory pay | No | Yes |
| Send the Full Payment Submission (FPS) | No | Yes [[7]](https://www.gov.uk/running-payroll/reporting-to-hmrc) |
| Send the Employer Payment Summary (EPS) | Possible for basic schemes | Yes [[8]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| View the balance owed to HMRC | Yes [[1]](https://www.gov.uk/paye-online) | No |
| Receive tax code notices (P6, P9, SL1) | Yes [[12]](https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye44030) | Some software imports them |
| Get late filing or late payment alerts | Yes [[1]](https://www.gov.uk/paye-online) | No |
An employer running its payroll through an HMRC-recognised payroll platform uses the software for everything in the right-hand column, then treats PAYE Online as the reference account for balances and notices.
Registering and getting enrolled
An employer normally has to register with HMRC when it starts employing staff, or when it starts using subcontractors for construction work [4]. Registration must happen before the first payday, because it produces the employer PAYE reference number that payroll software needs in order to file anything at all [4].
Automatic enrolment for the online service
When an employer registers as an employer online, it is enrolled for PAYE Online automatically [1]. There is no separate sign-up step in the normal path. After registration, HMRC sends the employer PAYE reference and the Accounts Office reference by post, and these two references identify the scheme on every submission [5].
An employer that did not register through the online route has to enrol for PAYE Online separately, and then activate the account before it can be used [2]. Activation is the step that trips people up.
The activation code and its deadline
After enrolment, HMRC posts an activation code within ten days [2]. The code has a hard expiry: it must be used within twenty-eight days of the date printed on the letter, and a code left unused past that point has to be requested again [2]. An employer waiting on a first payday should factor this postal delay into its timeline, because payroll cannot be filed until the reference number arrives and the account works.
The table below sets out the setup sequence and the timing an employer should expect.
| Step | What happens | Typical timing |
|---|---|---|
| Register as an employer | Employer applies online before first payday | Before first payday [[4]](https://www.gov.uk/register-employer) |
| PAYE reference issued | HMRC posts the employer PAYE and Accounts Office references | Usually within 5 working days [[5]](https://www.gov.uk/paye-for-employers/setting-up-payroll) |
| Activation code issued | HMRC posts the PAYE Online activation code | Within 10 days [[2]](https://www.gov.uk/paye-online/enrol) |
| Activate the account | Employer enters the code in the online service | Within 28 days of the letter [[2]](https://www.gov.uk/paye-online/enrol) |
| Choose payroll software | Employer selects software to run payruns and file RTI | Before first payday [[5]](https://www.gov.uk/paye-for-employers/setting-up-payroll) |
What an employer can do inside PAYE Online
Once the account is live, PAYE Online becomes the employer's reference point for anything HMRC wants to say or show about the scheme. Its functions fall into three groups: seeing money, reading notices, and receiving warnings.
Viewing the balance and what is owed
Each tax month runs from the 6th of one month to the 5th of the next [9]. An employer can see what it owes for a month in the HMRC account from the 10th of the following month, once the previous month's submissions have been processed [9]. PAYE Online shows this balance, along with the payroll reports the employer has sent and anything outstanding [1].
The amount payable each month is the tax, National Insurance and other deductions reported on the Full Payment Submissions for the month, minus any reductions claimed on an Employer Payment Summary sent before the 19th [8]. The payment itself is due by the 22nd of the following month for electronic payments, or the 19th if the employer pays by post [9]. An employer whose average monthly liability is under £1,500 can arrange to pay quarterly instead, by contacting the HMRC payment helpline [9].
Tax code notices and student loan notices
PAYE Online is the channel through which HMRC tells an employer to change how it taxes a worker. An employer registered for the service receives coding and student loan notices online rather than on paper, unless it has specifically opted out [12]. These notices are instructions that the employer must apply in its payroll software from the effective date.
The main notices delivered through PAYE Online are set out below.
| Notice | What it tells the employer |
|---|---|
| P6 | A change to an individual employee's tax code during the year [[12]](https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye44030) |
| P9 | The tax code to carry forward for an employee into the new tax year [[11]](https://www.gov.uk/government/publications/p9x-tax-codes/p9x-tax-codes-to-use-from-6-april-2026) |
| SL1 | Start deducting a student loan for a named employee [[18]](https://www.gov.uk/new-employee/student-loans) |
| SL2 | Stop deducting a student loan [[18]](https://www.gov.uk/new-employee/student-loans) |
| PGL1 | Start deducting a postgraduate loan [[20]](https://www.gov.uk/government/publications/payroll-technical-specifications-student-loans/collection-of-student-loans-from-6-april-2026) |
| PGL2 | Stop deducting a postgraduate loan [[20]](https://www.gov.uk/government/publications/payroll-technical-specifications-student-loans/collection-of-student-loans-from-6-april-2026) |
An employer should never stop a student loan deduction on an employee's word alone. Only an SL2 or PGL2 notice from HMRC authorises the deduction to stop [18]. This is a point where reading PAYE Online notices carefully matters, because acting on a rumour rather than a notice creates an underpayment the employer is liable for.
The PAYE Desktop Viewer
Employers with a large number of notices can use the PAYE Desktop Viewer, a free HMRC application that downloads coding and student loan notices in bulk and lets them be searched and sorted offline [10]. It is aimed at bigger schemes and at payroll bureaux handling many clients, where reading notices one at a time in the browser would be slow. Smaller employers rarely need it, because their software often imports notices directly.
Late alerts and the tenth-day check
PAYE Online also warns an employer when it reports late, pays late, or does not send the expected number of reports in a tax month [1]. These alerts matter because HMRC generates a specified charge if it expects a submission and none arrives, and because a new scheme that sends no reports for a sustained period can have its PAYE scheme closed. A disciplined employer logs in from the 10th of each month, checks the balance against its own payroll records, and clears any alert before the payment deadline on the 22nd.
How PAYE Online works with payroll software
The everyday reporting that keeps a scheme compliant happens in payroll software, and PAYE Online is where the results land. Each payday, the software sends a Full Payment Submission listing each employee's pay and deductions, the employer National Insurance due, and the scheme's identifying references [13]. An Employer Payment Summary follows when the employer needs to reclaim statutory payments, claim the Employment Allowance, or report a month with no payments [8].
Reporting a new starter
When an employer takes on a worker, it registers that person with HMRC by including their details on the first Full Payment Submission that covers them, not through a separate form in PAYE Online [19]. The employer gathers the information it needs from the worker's P45, or from a starter checklist if there is no P45, and enters it into the payroll software [14]. PAYE Online then reflects the new employee once the submission is processed. An employer setting up its first hires should read the detailed new starter and P45 process before running the first payrun.
Correcting a mistake
If an employer reports the wrong figures, the correction is made through payroll software by sending an amended or additional submission, again not by editing anything in PAYE Online directly [26]. PAYE Online shows the corrected position after the amendment is processed. This is why the service is best understood as a mirror of the scheme rather than a control panel for it.
An employer choosing between tools should pick software that is HMRC-recognised and files RTI cleanly, then let PAYE Online do the narrow job it is built for. A modern UK payroll engine handles the FPS and EPS automatically on every payrun, so the employer's only PAYE Online task is the monthly balance check.
Appointing an agent
Many employers do not manage PAYE Online themselves. An accountant or payroll bureau can be authorised as an agent to see and act on a scheme, which is how professional payroll is usually run [27]. The agent uses its own HMRC agent account, linked to the client's scheme, and can then receive notices and view balances on the client's behalf. For a growing business, handing PAYE Online oversight to an accountant running multi-client payroll removes the monthly login discipline from the owner's plate, while the underlying obligations stay with the employer.
Work out the true cost of employing someone
Before or alongside setting up PAYE Online, an employer often wants to know what a hire actually costs once tax and National Insurance are added. The Moonworkers UK salary calculator applies the 2026-27 PAYE and National Insurance rules, including the 15% employer rate that took effect on 6 April 2026, to any gross salary [27].
£ per month
e.g. 1257L, S1257L, BR, D0
S = Scotland · C = Wales · W1/M1 = non-cumulative
Enter a salary or hourly rate above
About this calculator
This calculator gives you a close estimate of your UK payroll deductions for 2026-27, using HMRC's exact percentage method. It covers the vast majority of employees on standard tax codes, but it won't match your payslip to the penny in every case. Edge cases it does not cover include in-year tax code changes, K-code carry-forwards, Week 53 adjustments, payrolled benefits in kind, and multi-employment NI deferral. Powered by the same engine as the Moonworkers Payroll API.
Frequently asked questions
Why might the result differ from my payslip?
This calculator uses your current gross pay and tax code to produce an estimate. Your employer may apply adjustments not covered here, such as mid-year tax code changes, K-code carry-forwards, or benefits in kind processed through payroll. For most employees on a standard tax code these differences are negligible.
What tax code should I enter?
Use the tax code shown on your most recent payslip or the PAYE Coding Notice (P2) from HMRC. If you're not sure, 1257L is the standard code for most employees resident in England, Wales, or Northern Ireland. Use S1257L for Scotland or C1257L for Wales if you pay Scottish or Welsh income tax.
Which NI category applies to me?
Most employees use Category A. Use M if you are under 21, H if you are an apprentice under 25, or C if you are over State Pension age. Your employer is responsible for assigning the correct category — if in doubt, check your payslip.
Which student loan plan am I on?
Your plan depends on when and where you studied. Plan 1 covers students who started before September 2012. Plan 2 is for English and Welsh students who started from September 2012 to July 2023. Plan 5 applies to English students who started from August 2023. Plan 4 covers Scottish students. You can check your plan at gov.uk or on your payslip.
What is the YTD cumulative PAYE mode?
HMRC's standard method calculates income tax on your total earnings to date each period, then subtracts tax already paid. If you're mid-year and want to see exactly what tax should be deducted in a specific period, expand the Year-to-date section and enter your running totals from previous periods only.
Conclusion
PAYE Online is best treated as an employer's official noticeboard rather than its payroll machine. It shows the balance owed, delivers the tax code and student loan notices HMRC issues, and raises the alarm when a deadline slips, but it never calculates pay and rarely files the reports that keep a scheme compliant. Those jobs sit with payroll software, and the cleanest schemes are the ones where the employer understands exactly which tool does which task.
For a new employer, the practical path is straightforward: register before the first payday, wait for the references and the activation code, activate within the twenty-eight day window, connect recognised payroll software, and then use PAYE Online each month as the place to confirm what HMRC thinks it is owed. As HMRC continues to move employer communication online, the value of logging in on the tenth of each month, reading every notice and clearing every alert, only grows.
Frequently asked questions
Is HMRC PAYE Online free to use?
Yes. PAYE Online for employers is a free HMRC service, and an employer is enrolled for it automatically when it registers as an employer online [1]. There is no charge for the account, for viewing the balance owed, or for receiving tax code and student loan notices through it. The only related cost an employer usually meets is the payroll software it chooses to run payruns and file Real Time Information.
What can I actually do inside PAYE Online?
An employer can view the balance of what the scheme owes, see the payroll reports it has sent, read tax codes and notices about its employees, and receive alerts when it reports or pays late [1]. Basic schemes can also send some submissions directly, but PAYE Online does not calculate pay, tax or National Insurance, which is why most employers pair it with payroll software.
My PAYE Online activation code has expired, what now?
An activation code has to be used within twenty-eight days of the date on the letter, and once it lapses the employer has to request a replacement through the service [2]. Requesting a new code is straightforward, but it means another postal wait, so an employer approaching a first payday should activate the account as soon as the original code arrives to avoid delaying its first submission.
When can I see how much I owe HMRC for the month?
The amount owed for a tax month appears in the HMRC account from the 10th of the following month, once the previous month's submissions have been processed [9]. Payment is then due by the 22nd for electronic methods, or the 19th if paying by post. An employer that logs in around the 10th has time to reconcile the figure against its own records before the payment deadline.
