PAYE: the basics

PAYE forms - and when to use them

PAYE has to cater for many different employment and tax situations. There are basic forms and procedures which almost every employer needs to use to operate the system. You should use these forms to keep a record of everything you've paid your employees, including wages, payments and benefits. The following are some of the main forms you will come across.

Forms for employees
There are three main forms to give to your employees, which show how much income tax and National Insurance contributions (NICs) they have paid.

These are:

• Wage slips - these are internal forms that you create and give to your employees to show how their pay has been calculated - see details of what a wage slip or pay statement must include on the DTI website.
• Form P45 - new employees who have had a job before will bring this to you when they start to work for you. In turn, you give them a completed P45 when they leave, which they pass on to their new employer.
• Form P60 - shows the tax deducted for the whole tax year, and is given to each employee at the end of the tax year - you can order form P60 on the HM Revenue & Customs website.

Payroll administration forms
If you employ staff you need to keep a record of all salary payments made, including NICs. You can download a specimen form P11 Deductions Working Sheet from the HM Revenue & Customs website (PDF) to record these details - this can also be used as the basis of your wages record.

To find out which forms you need to submit at the end of the year, see our guide on how to sort out your PAYE affairs for the end of the tax year.

Read about and enrol for PAYE Online for Employers, or to find out more about how electronic filing is being phased in for all employers see our guide on how to file returns online.

Subjects covered in this guide

• Introduction
• Employer's responsibility for PAYE
• Getting started with PAYE
• When to apply PAYE
• Employee tax codes
• PAYE forms - and when to use them
• Where to get further information on PAYE