Every UK employer is issued two distinct HMRC reference numbers the moment they register: an employer PAYE reference and an Accounts Office reference. Together they cover around 30.3 million payrolled employees processed through the UK PAYE system each month [10]. Confusing the two — or using the wrong one on a payment — is among the most common causes of PAYE penalties.
This article explains what each reference is for, how to read the format, where to find both numbers after registration, and how the payment reference system works when settling PAYE bills with HMRC early or late.
Key takeaways
- The employer PAYE reference identifies the employer in all HMRC submissions and employee documents (P45, P60, RTI).
- The Accounts Office reference identifies the payment account used when remitting PAYE to HMRC.
- Both references are 13 or more characters long and are issued simultaneously on employer registration.
- Registration must occur before the first payday, but no more than two months in advance.
- Using the wrong reference on a payment can trigger HMRC allocation errors and late-payment interest, currently 7.75% per annum.
What is a PAYE reference number?
The employer PAYE reference is HMRC's unique identifier for each employer's PAYE scheme [1]. It appears on every statutory document linked to that employer's payroll, from payslips and P45s through to the Full Payment Submissions (FPS) submitted under Real Time Information [[7].
HMRC also refers to it as the "PAYE reference" in some contexts. The official guidance is clear that the correct term is "employer PAYE reference", and forms that ask for a "PAYE employer reference number" or "employer PAYE reference number" are using non-standard phrasing [1].
The format of an employer PAYE reference
The employer PAYE reference consists of two parts separated by a forward slash [1]:
- A three-digit tax office number that identifies the HMRC office responsible for the scheme.
- A tax office employer reference of between one and ten characters, which can be letters and numbers.
A typical employer PAYE reference looks like: 123/AB456
The three-digit prefix is assigned based on the employer's location and business type at the time of registration. The alphanumeric suffix is unique to each employer within that tax office's records [1].
Where to find the employer PAYE reference
HMRC sends the employer PAYE reference in the registration confirmation letter, posted after the employer registers online [5]. Once registered, the reference appears on:
- HMRC letters about PAYE [1]
- The P60 issued to each employee at year end
- The payroll software's employer settings screen
Employers who have lost their PAYE reference can retrieve it from HMRC Online Services or by contacting the Employer PAYE and National Insurance helpline.
Employer PAYE reference vs Accounts Office reference
Both references share the same three-digit tax office prefix, which often causes confusion. The table below sets out how they differ [1][[2]:
The Accounts Office reference follows a fixed structure: three digits, the letter P, another letter, then eight digits — or seven digits and an X [2]. For example: 123PX00123456 or 123PX0012345X.
The Accounts Office reference is the number that tells HMRC's banking system where to allocate an incoming payment. Using the employer PAYE reference on a bank transfer instead of the Accounts Office reference is a common mistake that can leave a payment unallocated and trigger a late-payment notice [3].
When HMRC issues both references
Both references are created at the same time and arrive in the same registration confirmation letter. Employers do not need to apply for them separately [5].
Registration timing rules
HMRC sets firm boundaries around when an employer may register [5][[6]:
- Registration must happen before the first payday. An employer who has already paid staff without registering has missed the deadline.
- Registration cannot happen more than two months before the first payment to employees.
Most limited companies can register online through the GOV.UK service. The reference numbers are issued by post, which typically takes up to five working days from registration [5]. Employers planning to run their first payroll should factor this lead time into their setup schedule.
Sole traders and businesses that first cross the threshold for employing staff must complete the same registration process. Once registered, HMRC automatically enrols the employer in the PAYE Online service [5].
Using the PAYE reference number correctly
RTI submissions: Full Payment Submissions
Under Real Time Information, employers must submit a Full Payment Submission (FPS) to HMRC on or before each payday [7]. The FPS is mandatory and must include the employer PAYE reference, along with employee details, earnings, tax deductions, National Insurance contributions, and student loan deductions where applicable.
The employer NI rate for the 2026-27 tax year stands at 15% on earnings above the Secondary Threshold [1]. Payroll software recognised by HMRC — including UK payroll software for SMEs built to HMRC specifications — handles FPS generation and submission automatically, embedding the PAYE reference in every file sent.
An Employer Payment Summary (EPS) is submitted where no FPS has been sent in a month, or to claim statutory pay recoveries and Employment Allowance. The same employer PAYE reference appears on the EPS.
Payment references for PAYE remittances
When making PAYE payments to HMRC, the Accounts Office reference is the correct number to quote [3]. For standard monthly payments made on time, this 13-character reference is sufficient.
For payments that are early or late, HMRC requires four extra digits appended to the Accounts Office reference. These four digits encode the tax year and the month of the tax year being settled [3]. The table below shows the month codes HMRC uses:
For a monthly payer making a late payment for the period 6 May to 5 June in the 2026-27 tax year, the full payment reference would be the 13-character Accounts Office reference followed by 2702 (27 for the year ending in 2027, 02 for the second month of the tax year) [3]. Quarterly payers use the month code of the final month in the quarter.
HMRC's online payment service calculates the appended digits automatically, so employers paying through the service do not need to work them out manually [3].
Penalties for PAYE errors and late payments
HMRC charges penalties when PAYE is not paid in full and on time. The structure escalates with each additional late payment within the same tax year [4].
The penalty schedule
The first late payment in a tax year does not trigger a penalty. From the second default onwards, penalties apply as a percentage of the late amount [4]:
Interest accrues daily on all unpaid amounts from the due date at the current late payment rate. From 9 January 2026, HMRC's late payment interest rate stands at 7.75% per annum, set at the Bank of England base rate plus 4% [8].
Additional flat penalties apply to amounts that remain unpaid beyond the normal due date [4]:
- 5%** penalty if the monthly or quarterly payment is still outstanding after six months.
- A further 5% penalty if still unpaid after twelve months.
These additional penalties apply even if only one payment in the tax year is late, and they sit on top of the percentage-based penalty and accruing interest.
How to appeal a penalty
Employers who believe a penalty has been issued in error can appeal through HMRC's PAYE for employers online service, selecting "Appeal a penalty" once logged in [4]. HMRC accepts grounds including data errors in the returns, death or bereavement, natural disasters, and time-to-pay arrangements. Appeals must cite the Unique ID shown on the penalty notice.
Payroll bureaux managing multiple employer PAYE schemes on behalf of clients should log each scheme's reference numbers in their platform. A multi-client payroll dashboard designed for bureau use keeps reference numbers, FPS submission dates, and payment due dates in one place, reducing the risk of misallocation.
PAYE reference numbers and payroll software
HMRC-recognised payroll software embeds the employer PAYE reference and Accounts Office reference in every RTI submission and payment file. Employers using recognised software do not normally need to type reference numbers manually into HMRC forms, because the software stores them in the employer settings and retrieves them automatically for each submission.
For software platforms or HR systems that need to handle payroll programmatically, a HMRC-recognised payroll API allows the PAYE reference and Accounts Office reference to be configured once at the scheme level, after which every FPS, EPS, and payment instruction carries the correct identifiers without human intervention. This removes a category of error that frequently arises when finance teams copy reference numbers between systems by hand.
Employers running a single occasional payroll — for a director's salary, a seasonal worker, or a one-off payment — can use an instant payslip generator that requires the employer PAYE reference as part of setup, ensuring the payslip is compliant from the outset.
The 2.6 million private sector businesses registered for VAT and/or PAYE in the UK represent a wide range of employer sizes and structures [9]. From sole traders employing their first member of staff to platforms running payroll for SMEs at scale, the correct handling of PAYE and Accounts Office references is a foundational compliance requirement, not an optional detail.
Conclusion
The employer PAYE reference and the Accounts Office reference are two separate identifiers that serve different functions within the PAYE system. The PAYE reference names the employer scheme on RTI submissions, employee documents, and HMRC correspondence. The Accounts Office reference routes PAYE payments to the correct account at HMRC's banking operations.
Both arrive simultaneously in the registration confirmation letter and should be recorded immediately in the employer's payroll software and finance system. Losing one or substituting it for the other in a payment instruction creates allocation failures that compound into interest charges and, eventually, penalties.
Payroll software built to HMRC's recognised standard manages these identifiers automatically, provided the initial setup is correct. Employers setting up for the first time — or bureaux onboarding a new client — should verify both references match the HMRC letter before running the first FPS.
Frequently asked questions
What is an employer PAYE reference number?
An employer PAYE reference number is a unique identifier assigned by HMRC to each employer's PAYE scheme. It consists of a three-digit tax office number, a forward slash, and an employer reference of up to ten characters, for example 123/AB456. The reference appears on P45s, P60s, RTI submissions, and HMRC correspondence relating to PAYE. It is distinct from the Accounts Office reference, which is used solely for payment remittances.
How is the employer PAYE reference different from the Accounts Office reference?
The employer PAYE reference identifies the employer scheme and is used on payroll forms, employee documents, and RTI submissions. The Accounts Office reference is a 13-character identifier used only when making PAYE payments to HMRC. Both share the same three-digit tax office prefix but differ in format and function. Using one in place of the other when paying HMRC is a common source of payment misallocation.
When does HMRC issue a PAYE reference number?
HMRC issues the employer PAYE reference and the Accounts Office reference at the same time, in the confirmation letter sent after an employer registers. Registration must take place before the first payday but no more than two months in advance. Most employers receive their reference numbers within five working days of completing the online registration. Employers cannot legally pay staff under PAYE without first registering and receiving their reference numbers.
What happens if a PAYE payment is made without the correct reference number?
A payment made without the correct Accounts Office reference, or with the wrong additional digits for an early or late payment, may not be allocated to the employer's account by HMRC. This can cause HMRC to treat the payment as outstanding, triggering late-payment interest at 7.75% per annum and, if the amount remains unpaid after six months, an additional 5% penalty. Employers should contact HMRC's employer payment enquiries line if a payment appears unallocated.