Since most UK employers began reporting in real time from April 2013, every payment to an employee has had to be reported to HMRC on or before the day it is made, and the old end-of-year return, the P35, was abolished as a result [1]. Real Time Information (RTI) replaced a single annual reconciliation with a continuous stream of submissions, one for every pay run, and it is now the backbone of PAYE for every employer in the country.
RTI changed the rhythm of payroll completely. Before it, an employer could correct a year's worth of figures in one go after 5 April. Under RTI, each pay run is visible to HMRC as it happens, which means accuracy has to be built into every submission rather than fixed at year end. For an employer, that shift makes understanding the two core submissions, the Full Payment Submission and the Employer Payment Summary, essential rather than optional.
This guide explains what RTI is, how the FPS and EPS work, when each is due, what the on-or-before rule really requires, how late-filing penalties are structured, and how to correct a mistake once it has been reported. It is written for the employer running its own payroll, the administrator learning the monthly cycle, and the accountant who needs a clear reference to point clients towards.
Key takeaways
- RTI requires employers to report pay and deductions to HMRC on or before each payday, using the Full Payment Submission [2].
- The Employer Payment Summary is sent when no employees are paid in a tax month, or to claim reductions such as statutory pay recovery and the Employment Allowance [3].
- The PAYE tax month runs from the 6th to the 5th, and payment to HMRC is due by the 22nd, or the 19th if paying by post [4].
- Late-filing penalties are charged monthly and scale with workforce size, from £100 to £400 [5].
- Current-year mistakes are corrected by updating the year-to-date figures in the next FPS, not by resubmitting the whole run [6].
What Real Time Information is
Real Time Information is the system through which employers and pension providers send HMRC details of tax, National Insurance contributions and other deductions each time a salary or pension payment is made, rather than once a year [7]. It was introduced to make PAYE reporting more accurate and to feed timely earnings data into the benefits system.
The rollout was gradual. RTI began with a pilot in April 2012 for volunteer software developers and employers, most employers started reporting in real time from April 2013, and the last non-standard schemes joined in April 2014 [1]. The design goal was to build each employee's taxable-pay-to-date and tax-to-date figures over the year through regular submissions, which removed the need for the P35 and P14 end-of-year return entirely [1].
The change went further than year-end. Under RTI, employers no longer send forms P45 or P46 to HMRC when an employee starts or leaves; that information is carried inside the regular submission instead [1]. Starter and leaver details now travel with the FPS, which is why the P45 an employee receives is a document for the individual, not a filing to HMRC.
RTI submissions are made by HMRC-recognised payroll software, using the employer's Government Gateway credentials. HMRC recognition is the baseline requirement for any product that submits RTI at scale, so it is a floor rather than a distinguishing feature. Moonworkers' HMRC-recognised payroll software for SMEs sends both RTI submission types automatically as part of each pay run.
The Full Payment Submission (FPS)
The FPS is the main RTI submission and the one an employer sends most often. It is completed and submitted every time employees are paid, regardless of how long the employment is expected to last or how much is paid, and it tells HMRC which employees have been paid and gives full details of the payment and the deductions from it [7].
What the FPS contains
Each FPS carries a defined set of data for every employee in the pay run. The submission reports each employee's pay, including those earning below the National Insurance thresholds, together with the deductions and the employer's own contributions.
| Data reported in the FPS | Detail |
|---|---|
| Gross pay per employee | Every employee paid, including low earners [[2]](https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc) |
| Deductions | Income tax, National Insurance, student loans, pension contributions [[2]](https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc) |
| Employer National Insurance | Due on earnings above the secondary threshold [[2]](https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc) |
| Scheme identifiers | Employer PAYE reference and Accounts Office reference [[2]](https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc) |
Because employer National Insurance is reported on the FPS, and the employer rate rose to 15% on earnings above the secondary threshold from 6 April 2026, the FPS is also where the increased cost of employment first appears each pay run. The mechanics of that charge are set out in Moonworkers' guide to employer National Insurance.
The on-or-before rule
The defining requirement of RTI is timing. Employers must tell HMRC about income tax, National Insurance and other payroll deductions on or before the payments to their employees are made, the so-called on-or-before reporting rule [2]. In practice this means the FPS goes out on payday at the latest, and can be sent earlier where a payroll is finalised in advance.
There is an important discipline here: the FPS should always record the normal, contractual pay date, even when the actual payment is brought forward or delayed, for example because payday falls on a weekend or bank holiday. Reporting the habitual date keeps the employee's record consistent and avoids triggering false non-filing notices.
When the FPS can be sent after payday
HMRC allows a limited set of exceptions to the on-or-before rule, each with its own timeframe. These exist for genuine operational reasons rather than as a general grace period, and the FPS must state the reason for late submission using the correct reason code.
| Situation | Allowed timeframe |
|---|---|
| Employee with no P45, paid under £96 a week or employed less than a week | Within 7 days |
| Payday falls on a non-banking day | The next banking day, recording the normal pay date |
| Ad hoc payment discovered after the regular FPS | In the next regular FPS or a supplementary FPS |
| Non-cash payment in kind | Within 14 days of the end of the tax month |
| Pay calculated on the day of work (for example piece work) | Within 7 days |
Each of these still requires the reason code to be present. An FPS sent late without a valid reason is treated as a genuine late submission and can attract a penalty. For platforms embedding payroll into their own products, handling these reason codes correctly is part of the RTI logic, which is why the HMRC-recognised payroll API supports late-reporting reason codes and supplementary submissions, with the full endpoint set in the API reference.
The Employer Payment Summary (EPS)
The EPS is the second RTI submission, and it is used in narrower circumstances than the FPS. Its core purpose is to tell HMRC something the FPS cannot: either that no payments were made, or that a reduction should be applied to what the employer owes.
The clearest case is a month with no pay. When an employer has not paid any employees in a tax month, it sends an EPS instead of an FPS, notifying HMRC that no FPS is due and that no payment is required for that period [8]. Without that EPS, HMRC may issue a notice, estimate the amount due and charge a penalty, because silence looks like a missed filing rather than a quiet month.
The EPS is also the route for claiming reductions and reporting certain charges. It is sent in addition to the FPS in these situations.
| EPS use | Purpose |
|---|---|
| No employees paid in the tax month | Report a nil FPS month [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| Statutory pay recovery | Reclaim SMP, SPP, SAP, ShPP, SPBP and SNCP [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| Employment Allowance | Claim once per tax year, worth up to £10,500 off employer NI [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| CIS deductions suffered | For limited companies in construction [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| Apprenticeship Levy | Declared where the pay bill exceeds the threshold [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
Timing matters for the EPS just as much as for the FPS. It must reach HMRC by the 19th of the following tax month for the reduction to be applied to what the employer owes from its FPS [3]. Miss that date and the reduction slips to the next period, leaving the employer to pay the higher figure in the meantime. Employers claiming the largest of these reliefs can work through the detail in Moonworkers' guide to the apprenticeship levy.
The monthly RTI cycle and paying HMRC
RTI sits inside a fixed monthly rhythm anchored to the PAYE tax month, which runs from the 6th of one month to the 5th of the next. Knowing the sequence turns payroll from a scramble into a routine.
| Point in the cycle | Action |
|---|---|
| On or before payday | Send the FPS [[2]](https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc) |
| From the 6th onwards | The new tax month begins |
| By the 19th | Send any EPS for the previous tax month [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| By the 22nd | Pay HMRC electronically (the 19th if paying by post) [[4]](https://www.gov.uk/running-payroll/paying-hmrc) |
Each month the employer pays HMRC the tax and National Insurance reported in the FPS, less any reductions claimed in an EPS sent by the 19th [4]. The payment deadline is the 22nd for electronic payment, and a penalty may apply if it is missed [4]. The Employment Allowance claim, made once a year through the EPS, can reduce that bill by up to £10,500 [3].
Smaller employers have one relief from the monthly grind: where the average monthly PAYE bill is generally below £1,500, the employer can arrange to pay HMRC quarterly rather than monthly. The reporting obligation, though, does not change; the FPS is still sent on or before every payday regardless of how often the payment is made.
Late-filing penalties under RTI
Because every pay run is now visible to HMRC in real time, late filing is caught quickly and penalised on a monthly basis. An employer is liable to a penalty if, during a tax month, it fails to file one or more RTI returns by the filing date, which is the date the payment was made [5]. The penalty amount depends on the number of employees in the PAYE scheme.
| Number of employees | Monthly late-filing penalty |
|---|---|
| 1 to 9 | £100 [[5]](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm519505) |
| 10 to 49 | £200 [[5]](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm519505) |
| 50 to 249 | £300 [[5]](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm519505) |
| 250 or more | £400 [[5]](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm519505) |
The regime has two features that soften and sharpen it in turn. An employer is not charged for the first late FPS in a tax month, receiving an online warning instead, which gives a margin for the occasional slip. But an extended failure, where the return remains unfiled beyond three months from the filing date, can attract a further penalty on top of the monthly one [5]. Late or incorrect FPS submissions can also affect employees' entitlement to benefits such as Universal Credit, because the benefits system relies on the timely earnings data RTI supplies.
There is a harder consequence for new employers that go quiet. Where no reports are submitted for an extended period after a scheme is set up, HMRC can close the PAYE scheme, which then has to be sorted out before payroll can resume. The practical lesson across all of these is that the on-or-before submission, filed through recognised software, is the single habit that keeps an employer clear of RTI penalties.
Correcting RTI mistakes
Real time reporting removed the annual clean-up, so corrections now happen through the same submission channel that created the figure. The method depends on whether the mistake is in the current tax year or an earlier one.
For a mistake in the current tax year, the fix is built into the next run: the employer updates the year-to-date figures in its next regular FPS, and the corrected totals overwrite the earlier ones [6]. There is no need to resubmit the original pay run in isolation, because RTI works on cumulative year-to-date figures rather than standalone period figures.
For a mistake in a previous tax year, the employer submits a further FPS showing the correct year-to-date figures for the affected employee [6]. Where a PAYE bill simply does not match what the employer expected, HMRC's guidance on unexpected bills walks through the common causes, from duplicated payments to unclaimed reductions [9]. Because a mis-keyed figure can ripple through an employee's tax code and benefits, correcting promptly matters, and Moonworkers' guide to correcting payroll errors sets out the practical steps.
RTI for accountants and bureaux
For an accountant or payroll bureau, RTI multiplies across every client scheme. Each employer has its own FPS cycle, its own EPS obligations, and its own filing deadlines, all running to the same monthly calendar. The volume is the challenge: dozens or hundreds of on-or-before submissions, each with the correct scheme references and reason codes, filed on time every month.
Managing that at scale is less about any single submission and more about never missing one across a large client base. A multi-client payroll dashboard lets a bureau run every client's RTI from one place, with each scheme's submissions tracked against its own deadlines rather than juggled by hand. The same year-end discipline applies to every scheme too, since the P60 still has to reach every employee on payroll at 5 April, a process covered in Moonworkers' P60 end-of-year checklist.
Conclusion
Real Time Information turned PAYE from an annual reconciliation into a continuous conversation with HMRC. The Full Payment Submission reports every payment on or before payday, the Employer Payment Summary handles nil months and reductions, and the two run to a fixed monthly calendar that ends with payment by the 22nd. Penalties are monthly and quick to arrive, but the first slip of the month is a warning rather than a charge, and corrections flow through the same cumulative figures that created the error.
As payroll increasingly runs inside HR platforms, accounting tools and bureau systems rather than standalone software, RTI is the layer that has to work invisibly beneath all of them. The submissions themselves are becoming something an employer never handles directly: generated automatically, filed on time, and corrected through the next run. What remains is the employer's responsibility to make sure the figures behind them are right the first time, because under RTI, HMRC sees them the moment they are.
Frequently asked questions
What is the difference between an FPS and an EPS?
The Full Payment Submission is sent every time employees are paid and reports each employee's pay and deductions [7]. The Employer Payment Summary is sent in narrower situations: when no employees are paid in a tax month, or to claim reductions such as statutory pay recovery and the Employment Allowance [3]. An employer sends an FPS most months and an EPS only when one of those specific circumstances applies.
When does an FPS have to reach HMRC?
The FPS must be sent on or before the day employees are paid, which is the on-or-before reporting rule at the heart of RTI [2]. It can be sent earlier where the payroll is finalised in advance. A limited set of exceptions allows an FPS to follow payday, for example within 7 days for a new employee with no P45, but each late submission must carry a valid reason code.
What are the RTI late-filing penalties?
Penalties are charged monthly and depend on the size of the PAYE scheme, ranging from £100 for 1 to 9 employees up to £400 for 250 or more [5]. The first late FPS in a tax month brings an online warning rather than a charge, but a failure that continues beyond three months can attract a further penalty. Late submissions can also affect employees' Universal Credit entitlement.
How does an employer correct an RTI mistake?
For a mistake in the current tax year, the employer updates the year-to-date figures in its next regular FPS, and the corrected totals replace the earlier ones [6]. For a mistake in a previous tax year, the employer sends a further FPS with the correct year-to-date figures for the affected employee [6]. Because RTI uses cumulative figures, there is usually no need to resubmit the original pay run on its own.
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