Real Time Information became mandatory for UK employers in April 2013 [1]. Since then, every PAYE scheme must send a Full Payment Submission to HMRC on or before each payday [2], and a single late report can cost between £100 and £400 a month depending on headcount [3].
RTI submission software is the part of a payroll system that turns those obligations into automated filings. It calculates pay, tax and deductions, assembles the figures into the formats HMRC requires, and transmits them over the Real Time Information service. For an owner-managed business, an accountant running client schemes, or a software platform embedding payroll, the quality of that software decides whether every payrun lands on time and in the right shape [4].
This article sets out what RTI submission software does, the two reports it files, the deadlines that govern each, the penalties that follow a late or missing report, and the calculations the software must get right before it submits anything. It closes with the criteria that separate one HMRC-recognised product from another.
Key takeaways
- Real Time Information has been mandatory for UK employers since April 2013, and the Full Payment Submission must reach HMRC on or before payday.
- RTI submission software files two reports: the Full Payment Submission on every payrun, and the Employer Payment Summary when a reduction or a nil month applies.
- Late filing penalties run from £100 to £400 per tax month, scaled by the number of employees, with one unpenalised default allowed per tax year.
- HMRC recognition certifies only that the software can file RTI correctly. It is the entry requirement for UK payroll, not a mark of quality.
- Employers pay HMRC by the 22nd of the following tax month, or the 19th when paying by post.
What RTI submission software is
RTI submission software is any payroll product that can send statutory payroll reports to HMRC through the Real Time Information service. The service covers the reports that tell HMRC what each employee was paid, what was deducted, and what the employer owes as a result. Without software that holds HMRC recognition, an employer cannot file these reports at scale, and manual workarounds do not meet the specification for most schemes [4].
Real Time Information in context
Before April 2013, employers reported PAYE once a year and reconciled the figures at year end. Real Time Information replaced that annual reconciliation with a report on every payrun [1]. The practical effect is that HMRC sees each employee's pay and deductions as they happen, rather than months later, which removes the old habit of correcting errors in the following April.
That immediacy matters beyond the employer's own tax account. The data an employer files on each FPS feeds the Universal Credit calculation, so the timing of a payroll report can change what a low-paid employee receives [4]. Every business operating PAYE is inside this regime, which is why reliable RTI filing sits at the centre of UK payroll compliance.
What HMRC recognised actually certifies
HMRC publishes a list of payroll software it recognises, meaning the product has been tested against HMRC's specification and can file RTI submissions correctly [5]. The recognition is specific: it confirms the software can send a Full Payment Submission and an Employer Payment Summary in the required format, and nothing more.
Recognition does not rank products, nor does it vouch for reliability, support quality or ease of use. Every serious UK payroll product holds the badge, so it marks the floor an employer should expect rather than a feature that sets one product apart [4]. The sensible reading is to treat HMRC recognition as a prerequisite, then judge software on the criteria that actually differ.
Two reports carry almost all RTI traffic. The table below sets out what each one does.
| Report | Full name | When it is sent | What it does |
|---|---|---|---|
| FPS | Full Payment Submission | On or before every payday | Reports pay, tax, National Insurance and other deductions per employee |
| EPS | Employer Payment Summary | By the 19th of the following tax month | Claims a reduction, or reports a month with no payments |
The two RTI reports: FPS and EPS
The whole of RTI reduces to these two submissions. The software sends one on every payrun and the other only when a specific condition applies, so understanding the split is the first step to reading a payroll system's compliance behaviour.
The Full Payment Submission
The Full Payment Submission is the core RTI report. The software sends it on or before each payday [2], and it carries every employee's pay, the income tax deducted under PAYE, National Insurance for both the employee and the employer, and any student loan or pension deductions. It also carries the employer's PAYE reference and Accounts Office reference so HMRC can match the submission to the right scheme [6].
The software must record the usual payday even when the actual payment falls earlier or later, for example around a bank holiday. An FPS can be sent ahead of payday when a team will be away, although any figure that later changes would then need a correction [7]. Getting the payment date field right is one of the most common sources of avoidable RTI errors.
The Employer Payment Summary
The Employer Payment Summary is the second report, and it is conditional. An employer sends it when no employees were paid in a tax month, in which case it replaces the FPS for that month and reports a nil return [8]. It is also sent alongside the FPS to claim a reduction in what the employer owes HMRC.
Several situations require an EPS. The table below lists the most common.
| Situation | Why an EPS is sent |
|---|---|
| No employees paid in the tax month | Reports a nil return in place of the FPS |
| Reclaiming statutory parental or bereavement pay | Recovers part of the statutory payment from HMRC |
| Claiming the Employment Allowance | Reduces employer Class 1 National Insurance by up to £10,500 per tax year |
| CIS deductions suffered by a limited company | Offsets deductions taken under the Construction Industry Scheme |
| Apprenticeship Levy | Reports the levy due when the annual pay bill exceeds £3,000,000 |
The Employment Allowance is claimed once per tax year through the EPS and is worth up to £10,500 against employer Class 1 National Insurance [9]. Employers with a pay bill above £3,000,000 report the Apprenticeship Levy on the EPS at 0.5% of the pay bill [10]. Each of these reductions reaches HMRC only if the EPS arrives by the 19th of the following tax month.
When each report is due
RTI runs to a fixed monthly rhythm, and the software has to respect every date in it. The PAYE tax month runs from the 6th of one month to the 5th of the next, and the reporting and payment deadlines hang off that cycle [4].
The table below maps the monthly cycle.
| Point in the cycle | Action |
|---|---|
| 6th to the following 5th | The PAYE tax month |
| On or before payday | Send the Full Payment Submission |
| By the 19th | Send any Employer Payment Summary for the previous tax month |
| By the 22nd | Pay HMRC the balance, or the 19th if paying by post |
An employer whose average monthly PAYE bill is below £1,500 can arrange to pay HMRC quarterly rather than monthly, though the FPS still goes in on every payday [2]. Payment after the 22nd attracts interest and can trigger a separate late payment penalty, so the filing deadline and the payment deadline are best treated as two distinct obligations [11].
Sending an FPS after payday
HMRC allows an FPS to arrive after payday only in a defined set of situations, each with its own deadline [7]. The software signals the reason with a late reporting code, and a late FPS with no valid reason risks a penalty [3].
The following situations are the recognised exceptions.
| Situation | Deadline |
|---|---|
| New starter without a P45, paid under £96 a week or employed under a week | Within 7 days |
| Payday falls on a non-banking day | The next banking day, using the regular date and reason code G |
| Ad hoc payment found after the regular FPS | In the next regular FPS or an additional FPS |
| Non-cash payment such as shares | Within 14 days of the end of the tax month |
| Employer PAYE reference not yet received | On receipt, using reason code G |
Each exception has a strict window, and software that cannot record a late reporting reason leaves the employer exposed. Outside these situations, the on or before payday rule stands.
What happens when a report is late
A payroll system's real test is not the routine payrun but the exception, and the cost of a missed report is where RTI compliance stops being abstract.
The late filing penalties
HMRC charges a monthly penalty for a late FPS, scaled by the number of employees in the PAYE scheme [3]. The amounts are set out below.
| Employees in the PAYE scheme | Monthly penalty |
|---|---|
| 1 to 9 | £100 |
| 10 to 49 | £200 |
| 50 to 249 | £300 |
| 250 or more | £400 |
The first failure to file on time in a tax year does not attract a penalty, except for employers registered under an annual payroll scheme [3]. HMRC also applies a three-day concession: where an FPS is late but every payment on it falls within three days of payday, no penalty is charged, although persistent use of that margin can still be reviewed.
Late payment and longer consequences
A late or incorrect FPS affects more than the employer's own account. Because the FPS feeds the Universal Credit calculation, a report filed late can change what an affected employee receives in that period [4]. Correct, timely filing is therefore part of an employer's duty to its workforce, not only to HMRC.
Repeated silence carries its own risk. Where a new employer sends no reports for an extended period, HMRC can treat the scheme as dormant and close it, which creates further administration to reopen. Tax paid after the 22nd of the month accrues interest and can draw a late payment penalty on top of any filing penalty [11]. Software that files automatically at the end of each payrun removes the most common cause of these charges.
What the software calculates before it files
An FPS is only as accurate as the figures behind it. Before any submission leaves the system, the software has to compute income tax, National Insurance and a range of statutory items for every employee.
PAYE, National Insurance and the FPS totals
Income tax follows the PAYE bands. The Personal Allowance is £12,570, and the basic rate is 20% on income up to £50,270 in England and Northern Ireland, with higher and additional rates above that [12]. The software applies the employee's tax code to work out the right deduction on each payrun before the figure reaches the FPS.
Employer National Insurance is charged at 15% on earnings above the £5,000 Secondary Threshold, following the rate rise that took effect on 6 April 2026 [13]. Employees pay 8% between the Primary Threshold and the Upper Earnings Limit, and 2% above it. The 2026-27 figures the software applies are set out below.
| Threshold or rate | 2026-27 figure |
|---|---|
| Secondary Threshold (employer) | £5,000 a year |
| Primary Threshold (employee) | £12,570 a year |
| Upper Earnings Limit | £50,270 a year |
| Employer rate above the Secondary Threshold | 15% |
| Employee rate in the main band | 8% |
Statutory pay, student loans and the levy
The same engine handles statutory payments and the deductions that flow through the FPS and EPS. Statutory Sick Pay is £123.25 a week or 80% of average weekly earnings, whichever is lower, and following the reform in force from 6 April 2026 it is due from the first day of sickness with no earnings floor [14]. Payroll systems that still apply waiting days or a lower earnings limit to statutory sick pay are now out of step with the rules.
Student loan deductions are taken at 9% on earnings above the relevant plan threshold and reported on the FPS [15]. The Apprenticeship Levy, at 0.5% of the pay bill above £3,000,000, is reported through the EPS rather than the FPS. Each of these items has to be calculated correctly before the submission is assembled, which is why the filing layer and the calculation layer cannot be judged separately.
Choosing RTI submission software
With the mechanics established, the buying decision comes down to how the software fits the rest of a business's systems, not whether it can file at all.
Beyond the HMRC badge
Because every recognised product can file RTI, the badge settles nothing on its own [5]. The criteria that actually separate products are developer experience, how easily the engine embeds into other systems, self-serve onboarding, pricing transparency, and independence from a wider accounting or HR suite. Moonworkers, an HMRC-recognised UK payroll platform, is built API-first, so the submission logic sits behind a documented interface rather than inside a fixed desktop tool. Most UK payroll software files the FPS automatically at the end of a payrun, and the difference between products lies in everything around that core action [4].
In-house, bureau or embedded
RTI submission software is used in three broad ways, and the right choice depends on who runs the payroll. An owner-managed business running its own schedule needs a system that handles PAYE, RTI and auto-enrolment without a specialist on staff [2]. An accountant or bureau managing many client schemes needs a multi-client payroll dashboard with approval workflows and per-payslip pricing that scales with activity rather than headcount.
A software platform that wants to offer UK payroll inside its own product needs something different again: an HMRC-recognised payroll API that it can embed, with public API documentation and a sandbox so developers can integrate without going through a sales process. In every case the Employment Allowance, the statutory reclaims and the nil-month EPS are handled by the same engine that files the FPS, so the submission behaviour and the calculation behaviour move together [9].
Conclusion
Real Time Information turned UK payroll from an annual reconciliation into a continuous reporting duty, and RTI submission software exists to carry that duty without manual intervention. Its job is narrow but unforgiving: make each payrun's Full Payment Submission accurate and on time, send the Employer Payment Summary whenever a reduction or a nil month applies, and keep the employer clear of penalties that start at £100 a month and climb with headcount.
The direction of travel is towards payroll that runs quietly inside other systems. As more platforms embed payroll rather than bolt it on, the compliance work moves behind an API, and HMRC recognition becomes the baseline on which the rest of the product is judged. The employers who fare best are the ones whose software treats every FPS and EPS as a routine event, filed automatically, exactly when the calendar requires it.
Frequently asked questions
What is the difference between an FPS and an EPS?
The Full Payment Submission reports what each employee was paid and what was deducted, and it is sent on or before every payday [2]. The Employer Payment Summary is sent only when the employer is claiming a reduction, such as reclaimed statutory pay or the Employment Allowance, or reporting a tax month in which no one was paid [8]. An employer may send both in the same month, or neither, depending on what happened on the payroll.
When must an FPS be filed?
The general rule is that the Full Payment Submission reaches HMRC on or before the day the employees are paid [2]. HMRC allows a small number of exceptions, such as a new starter without a P45 or a payday that falls on a non-banking day, each with its own deadline and a late reporting reason code [7]. Outside those situations, filing after payday risks a penalty.
What is the penalty for filing RTI late?
Late filing penalties are charged per tax month and scaled by scheme size, from £100 for one to nine employees up to £400 for 250 or more [3]. The first late report in a tax year is not penalised, except under an annual scheme, and there is a three-day concession where every payment on a late FPS falls within three days of payday. Separate interest and penalties apply to tax paid late [11].
Does RTI submission software need to be recognised by HMRC?
In practice, yes. HMRC maintains a list of recognised payroll software that has been tested to file RTI submissions correctly, and this is the practical route for almost all employers [5]. Recognition confirms the software can send the FPS and EPS to specification, but it does not rank products or guarantee reliability, so it should be read as a minimum standard rather than a recommendation [4].
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