The Complete UK Payroll Checklist for Employers
The National Living Wage rose to £12.71 an hour on 1 April 2026 [1], and employer National Insurance is charged at 15% on earnings above a Secondary Threshold of just £5,000 a year [2]. Two figures, two separate compliance obligations, and both have to be right in the same payrun.
Payroll is not a single task. It is a chain of obligations that repeats every pay period, every tax month, and every tax year, with a separate set of duties triggered whenever an employee joins or leaves. A missed Full Payment Submission, a stale tax code or an overlooked re-enrolment date can each create a penalty, a corrected submission, or an underpaid employee.
This article sets out that chain as a working checklist. It covers what an employer confirms before running payroll for the first time, what happens on every payrun, what falls due each tax month, what auto-enrolment adds on top, and what the year-end sequence looks like from the final Full Payment Submission through to the P11D deadline.
Key takeaways
- A Full Payment Submission must reach HMRC on or before the date employees are paid, not after it [3].
- PAYE and National Insurance are due by the 22nd of the following tax month when paid electronically, or the 19th when paid by post [4].
- Employers with a PAYE bill under £1,500 a month can apply to pay quarterly instead of monthly [4].
- An Employer Payment Summary is required in any tax month where no employee was paid, and to reclaim statutory payments [5].
- P60s go to every employee still on payroll on 5 April, with a deadline of 31 May [6].
- Auto-enrolment re-enrolment and re-declaration fall due every three years, whether or not any staff need re-enrolling [7].
Before the first payrun: the setup checklist
An employer paying anyone £123 a week or more, or anyone who already has another job or receives a pension, has to register as an employer with HMRC and operate PAYE [8]. Registration produces two identifiers that every later submission depends on: the PAYE reference and the Accounts Office reference.
The setup phase is the cheapest point at which to get things right. Errors introduced here (a wrong pay frequency, a missing pension scheme, an incorrect NI category letter) propagate into every submission until somebody notices.
Registration and reference numbers
Registration should be completed before the first payday, and HMRC advises allowing time for the reference numbers to arrive, since a Full Payment Submission cannot be filed without them [8]. Employers who cannot register in time still have to record pay and deductions from the first payday and submit as soon as the scheme is live.
The employer also needs payroll software capable of reporting under Real Time Information. HMRC publishes a list of recognised products, and the free HMRC tool is capped at 9 employees, produces no payslips and performs no auto-enrolment assessment [9]. Commercial UK payroll software carrying the HMRC Recognised badge handles the Full Payment Submission, the Employer Payment Summary and the annual rate changes without manual reconfiguration.
Employer-level records to confirm
Several employer-level settings are set once and then affect every calculation. The table below lists the ones most often misconfigured at setup.
| Setting | What to confirm | Why it matters |
|---|---|---|
| Pay frequency | Weekly, fortnightly, four-weekly or monthly | Determines the period thresholds used for NI and student loans |
| Employment Allowance eligibility | Whether the business can claim, and whether a connected-company restriction applies | Reduces the employer NI bill, claimed through the Employer Payment Summary [[10]](https://www.gov.uk/claim-employment-allowance) |
| Small Employers' Relief | Employer NI paid in the previous tax year of £45,000 or less | Raises statutory family pay recovery from 92% to 109% |
| Apprenticeship Levy | Annual pay bill above £3,000,000 | Triggers a 0.5% levy reported monthly on the Employer Payment Summary [[11]](https://www.gov.uk/guidance/pay-apprenticeship-levy) |
| Pension scheme | Qualifying scheme selected and staging or duties start date recorded | Auto-enrolment assessment cannot run without it |
Employers should also record whether any employee is paid at a rate that sits close to the National Minimum Wage, since salaried staff can fall below the hourly minimum once additional hours are worked.
The new starter checklist
Every joiner triggers the same short sequence, and it is the sequence most likely to produce an emergency tax code if rushed. HMRC's guidance is that the employer collects the employee's details, works out the correct starting tax code, and reports the new employee on the first Full Payment Submission rather than through any separate form [12].
Collecting the right details
The employer needs the employee's full name, date of birth, address, gender, National Insurance number and start date [13]. Where the employee provides a P45 from a previous employment in the same tax year, the previous pay and tax figures and the tax code carry across.
Where there is no P45, the employer uses HMRC's starter checklist, the form that replaced the old P46 [14]. HMRC recommends asking the new starter to complete it at the same time as bank details are collected, because the employee sees the direct link to being paid correctly and is far more likely to return it promptly [12].
Setting the correct tax code
The starter checklist produces one of three statements, and each maps to a different starting code. Statement A (this is the employee's first job since 6 April) points to the standard code on a cumulative basis. Statement B (another job has ended in the tax year) points to the standard code on a week 1 or month 1 basis. Statement C (the employee has another job or a pension) points to a BR code, taxing all earnings at the basic rate [14].
If neither a P45 nor a completed checklist is available by the first payday, the employer applies the emergency code and corrects it once HMRC issues a P6 or P9 coding notice [15]. Under Real Time Information, coding corrections typically arrive within a few pay periods, and any overpaid tax is refunded through payroll rather than by the employee claiming separately.
The every-payrun checklist
This is the core of the operation, repeated at the same rhythm all year. HMRC frames it as five actions each time employees are paid: record pay, calculate the deductions, calculate the employer's National Insurance, produce payslips, and report everything in a Full Payment Submission [5].
Calculating pay and deductions
Gross pay is assembled first: basic pay, overtime, commission, bonuses, statutory payments and any taxable benefits being payrolled. Income tax follows the employee's tax code and the rates for the country recorded against them, with Scottish codes prefixed `S` and Welsh codes prefixed `C` [16].
National Insurance is calculated against period-equivalent thresholds. For the 2026-27 tax year the employee pays 8% between the Primary Threshold and the Upper Earnings Limit and 2% above it, while the employer pays 15% on everything above the Secondary Threshold [2]. The table below gives the annual figures that drive the calculation.
| Threshold | Weekly | Monthly | Annual |
|---|---|---|---|
| Secondary Threshold (employer trigger) | £96 | £417 | £5,000 |
| Lower Earnings Limit | £129 | £559 | £6,708 |
| Primary Threshold (employee trigger) | £242 | £1,048 | £12,570 |
| Upper Earnings Limit | £967 | £4,189 | £50,270 |
Student loan deductions come next, at 9% of earnings above the relevant plan threshold, rounded down to the nearest whole pound. Where an employee holds both a student loan and a postgraduate loan, the postgraduate loan is deducted first [17]. Pension contributions and any attachment of earnings orders complete the deduction stack.
Producing compliant payslips
Every employee and every worker has a statutory right to an itemised pay statement at or before the time they are paid [18]. The statement must show gross pay, the amount and purpose of every variable deduction, the amount of every fixed deduction (unless a separate standing statement is issued), net pay, and the method of payment where the net figure is split [19].
Where pay varies with time worked, the payslip must also show the number of hours paid, either as a single total or broken down by rate [20]. This requirement is the one most often missed by employers moving hourly staff onto salaried contracts and back again. Businesses issuing occasional or one-off payments can use an instant payslip generator rather than standing up a full scheme for a single payment.
Filing the Full Payment Submission
The Full Payment Submission carries pay, deductions, starters, leavers and year-to-date figures for every employee, and it must reach HMRC on or before the payment date [3]. Filing after payday requires a late reporting reason code on the submission, and HMRC treats repeated unexplained late filing as grounds for a penalty [21].
Late filing penalties are charged per PAYE scheme and scale with headcount, as set out below [22].
| Employees in the scheme | Monthly late-filing penalty |
|---|---|
| 1 to 9 | £100 |
| 10 to 49 | £200 |
| 50 to 249 | £300 |
| 250 or more | £400 |
Only one filing penalty is charged per tax month even where several submissions were late, and HMRC issues penalty notices quarterly [23]. Employers in the first tax month of a new scheme are not penalised for the first late submission.
The monthly checklist
Tax months run from the 6th of one month to the 5th of the next, and the monthly cycle sits on top of the payrun cycle rather than replacing it [5].
Paying HMRC on time
The PAYE bill covers income tax, employee and employer National Insurance, student loan deductions, Apprenticeship Levy where due, and Construction Industry Scheme deductions. Electronic payment is due by the 22nd of the following tax month, and postal payment by the 19th [4].
Employers whose average monthly PAYE bill is under £1,500 can apply to pay quarterly, with the same 22nd deadline applied to the quarter end [24]. Quarterly payment reduces administrative friction but does not change the Full Payment Submission obligation, which stays tied to each payday.
Sending an Employer Payment Summary
The Employer Payment Summary is the second half of the Real Time Information pair, and it is easy to forget because it is not always required. It is used to reclaim statutory maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay, to claim Employment Allowance, to report Apprenticeship Levy, and to tell HMRC that no employee was paid in a tax month [5].
An employer with an Apprenticeship Levy liability files an Employer Payment Summary every month of the tax year, even in months where the amount due is nil [11]. Where a mistake is found in an earlier submission, HMRC's correction route depends on how far back the error sits, and in most cases an additional Full Payment Submission with corrected year-to-date figures resolves it [25].
The auto-enrolment checklist
Workplace pension duties run on their own calendar and are enforced by The Pensions Regulator rather than HMRC. They apply from the first day the employer has a member of staff, not from a later staging date.
Assessing staff every pay period
Every worker is assessed at each pay reference period against age and qualifying earnings. Eligible jobholders must be enrolled and given the statutory information, non-eligible jobholders can opt in, and entitled workers can request a scheme [26]. The assessment repeats every period because a worker can cross an age or earnings boundary at any point.
The declaration of compliance is due within five months of the duties start date, and it is a legal requirement in its own right, separate from actually enrolling anybody [27]. Accountants running this across a book of clients generally track it from a multi-client payroll dashboard rather than per scheme.
Re-enrolment every three years
Every three years from the duties start date, the employer picks a re-enrolment date and puts eligible staff who previously opted out back into the scheme, writing to them within six weeks [7]. The re-declaration of compliance follows within five months of the chosen date.
The trap is that the re-declaration is required even where the assessment finds nobody to re-enrol [7]. Employers who conclude there is nothing to do and file nothing are the most common source of re-enrolment enforcement action.
The leaver checklist
When an employee leaves, the employer records the leaving date in payroll, includes the leaving date on the Full Payment Submission covering the final payment, and issues a P45 [5]. The P45 shows the leaving date, the tax code, and pay and tax to date, and parts 1A, 2 and 3 go to the employee.
Payments made after a P45 has been issued are taxed using code 0T on a week 1 or month 1 basis and reported on an additional Full Payment Submission, with the leaver flagged as a payment after leaving [25]. Holiday pay owed on termination, unpaid commission and any payment in lieu of notice all fall into this category if they land after the final payslip.
The year-end checklist
Year-end is a fixed sequence with four dates, and it is the point at which a year of small inconsistencies becomes visible.
| Deadline | Obligation |
|---|---|
| On or before the final payday of the tax year | Send the final Full Payment Submission for the year [[6]](https://www.gov.uk/payroll-annual-reporting) |
| 19 April | Send any final Employer Payment Summary for the closing tax year |
| 31 May | Issue a P60 to every employee still employed on 5 April [[6]](https://www.gov.uk/payroll-annual-reporting) |
| 6 July | Submit P11D and P11D(b) forms for taxable benefits |
| 22 July | Pay Class 1A National Insurance on benefits electronically |
The P60 must go to every employee on the payroll on 5 April, including those on long-term sick leave, maternity leave or unpaid leave. It shows total pay and tax for the year, National Insurance by category letter, statutory payments, student loan deductions in whole pounds, and the final tax code [6].
Before the first payrun of the new tax year, the employer updates tax codes from HMRC's P9 notices, applies the new rates and thresholds, clears year-to-date figures, and confirms that National Minimum Wage rates have been uplifted for any affected worker [1]. Employers embedding payroll into a wider platform typically drive these transitions through an HMRC-recognised payroll API so that rate changes land automatically rather than as a manual configuration task.
Where checklists break down
A checklist assumes a stable process, and payroll rarely offers one. Three failure modes recur.
The first is the exception that arrives after the checklist has been worked through: a late timesheet, a backdated pay rise, a leaver who was not flagged. HMRC's guidance on changing paydays makes clear that an employer moving a payment date has to keep the reported payment date consistent with the actual payment date rather than the scheduled one [28].
The second is the annual reset. Rates, thresholds, plan values and statutory pay figures change every April, and any figure hard-coded in a spreadsheet or a legacy configuration silently becomes wrong. Employers running the Employer further guide to PAYE and National Insurance contributions alongside their software each April catch most of these [29].
The third is scale. A checklist that works for one scheme with eight employees becomes unmanageable across forty client schemes with different pay frequencies, pension providers and year-end positions. At that point the checklist has to move from a document into the software, which is the difference between payroll for SMEs running one scheme and a bureau operating dozens.
Conclusion
The payroll checklist is really four overlapping cycles running at different frequencies: the per-employee cycle triggered by joiners and leavers, the per-payrun cycle of calculation and reporting, the monthly cycle of paying HMRC and filing the Employer Payment Summary, and the annual cycle that closes one tax year and opens the next. Compliance failures almost always come from a cycle being confused with the one next to it, most often the assumption that filing the Full Payment Submission also settles the payment, or that a quarterly payment arrangement relaxes the on-or-before reporting rule.
The direction of travel is towards fewer of these steps being performed by a person. Real Time Information moved reporting from an annual return to a per-payment event, mandatory payrolling of benefits in kind will fold P11D reporting into the payrun itself, and each of those shifts removes a manual checkpoint while raising the cost of getting the underlying data wrong. The checklist does not disappear; it moves into the system that runs the payroll.
Frequently asked questions
What happens if a Full Payment Submission is sent a day after payday?
HMRC allows a short grace period and does not generally penalise a submission that arrives within three days of the payment date, but employers who file within that window as a matter of routine can still be contacted and considered for a penalty [22]. Where the submission is late, the employer should include a late reporting reason code explaining why. A single unexplained late submission in the first tax month of a new scheme is not penalised.
Does an employer still need to file anything in a month when nobody is paid?
Yes. Where no employee has been paid in a tax month, the employer sends an Employer Payment Summary telling HMRC that no payment was made, rather than sending nothing at all [5]. Filing nothing leaves HMRC expecting a Full Payment Submission and can generate an estimated charge. Employers who know in advance that a scheme will be dormant for several months can report a period of inactivity covering up to twelve months.
Which employees need a P60 and which do not?
A P60 goes to every employee who was on the payroll on 5 April, including anyone on maternity, adoption, shared parental or long-term sick leave, and anyone who left after 5 April but before the P60 was produced [6]. Employees who left during the tax year receive a P45 instead and do not get a P60 from that employer. The deadline for issuing P60s is 31 May following the end of the tax year.
How often does auto-enrolment re-enrolment actually need doing?
Re-enrolment falls due every three years from the employer's duties start date or from the previous re-enrolment date, and the employer can choose a date within a six-month window around that anniversary [7]. Eligible staff who previously opted out are put back into the scheme and written to within six weeks. The re-declaration of compliance to The Pensions Regulator is mandatory even where the assessment identifies no staff to re-enrol.
