Dale Pollitt
May 15, 2026 . 8 minutes read . Written by Dale Pollitt

Ultimate Guide to Avoiding PAYE/NIC Penalties in 2026

Whether you run payroll weekly or monthly, staying on top of HMRC PAYE deadlines helps avoid penalties, interest charges, and unnecessary admin.

Employers must report employee pay and deductions to HMRC through Real Time Information (RTI) submissions and make PAYE payments on time throughout the tax year. Missing deadlines can lead to late filing penalties, interest charges, and extra pressure on your payroll process.

In this guide, we explain the key PAYE deadlines for the 2026/27 tax year, including monthly and quarterly payment dates, RTI reporting deadlines, year-end obligations, and the penalties that apply if payments or submissions are late.

What is PAYE?

What PAYE Means

PAYE, which stands for Pay As You Earn, is the system HMRC uses to collect Income Tax and National Insurance from employees through payroll.

As an employer, you’re responsible for deducting the correct amounts before paying your employees. This can include:

  • Income Tax
  • Employee National Insurance contributions (NICs)
  • Student loan repayments
  • Pension contributions where applicable

These deductions are then reported and paid to HMRC as part of your payroll responsibilities.

How PAYE Works in 2026/27

Employers must submit payroll information to HMRC using Real Time Information (RTI). This means HMRC receives payroll data every time employees are paid.

The main submission used is a Full Payment Submission (FPS), which must usually be sent on or before payday. This tells HMRC how much employees have been paid and what deductions have been made.

Most employers pay PAYE to HMRC monthly, although some smaller businesses may be eligible to pay quarterly.

PAYE Deadlines for 2026/27

Keeping track of PAYE deadlines is essential for avoiding penalties and interest charges from HMRC. Most employers will pay PAYE monthly, although some smaller businesses may be able to pay quarterly.

Monthly PAYE Payment Deadlines

If you pay PAYE monthly, payments must reach HMRC by:

  • 22nd of the following tax month if paying electronically
  • 19th of the following tax month if paying by post or cheque

These deadlines apply to the previous tax month, which runs from the 6th of one month to the 5th of the next.

PAYE Tax Months and Payment Deadlines for 2026/27

Tax MonthPeriod CoveredElectronic Payment Deadline
Month 16 April 2026 – 5 May 202622 May 2026
Month 26 May 2026 – 5 June 202622 June 2026
Month 36 June 2026 – 5 July 202622 July 2026
Month 46 July 2026 – 5 August 202622 August 2026
Month 56 August 2026 – 5 September 202622 September 2026
Month 66 September 2026 – 5 October 202622 October 2026
Month 76 October 2026 – 5 November 202622 November 2026
Month 86 November 2026 – 5 December 202622 December 2026
Month 96 December 2026 – 5 January 202722 January 2027
Month 106 January 2027 – 5 February 202722 February 2027
Month 116 February 2027 – 5 March 202722 March 2027
Month 126 March 2027 – 5 April 202722 April 2027

 

 

 

 

 

 

 

 

 

 

If the deadline falls on a weekend or bank holiday, payments must usually clear HMRC’s account on the last working day before the deadline.

Quarterly PAYE Deadlines

Some smaller employers can apply to pay PAYE quarterly instead of monthly. This is usually available where average monthly PAYE and National Insurance liabilities are less than £1,500.

Quarterly payments must reach HMRC by the 22nd following the end of each quarter if paying electronically, or by the 19th if paying by post.

Quarterly PAYE Payment Deadlines for 2026/27

QuarterPeriod CoveredElectronic Payment Deadline
Quarter 16 April 2026 – 5 July 202622 July 2026
Quarter 26 July 2026 – 5 October 202622 October 2026
Quarter 36 October 2026 – 5 January 202722 January 2027
Quarter 46 January 2027 – 5 April 202722 April 2027

 

 

 

 

RTI Submission Deadlines

As well as paying PAYE on time, employers must also submit payroll information to HMRC through Real Time Information (RTI).

The two main RTI submissions are the Full Payment Submission (FPS) and the Employer Payment Summary (EPS).

When to Submit an FPS

A Full Payment Submission (FPS) must usually be sent to HMRC on or before the date employees are paid.

The FPS tells HMRC:

  • employee pay and deductions,
  • Income Tax and National Insurance,
  • student loan deductions,
  • pension contributions,
  • statutory payments.

An FPS must still be submitted even if employees earn below the tax or National Insurance thresholds.

Late FPS submissions can result in penalties, particularly for employers who repeatedly miss deadlines during the tax year.

Employer Payment Summary (EPS) Deadlines

An Employer Payment Summary (EPS) is used to tell HMRC about adjustments that cannot be reported through an FPS.

This can include:

  • reclaiming statutory payments such as Statutory Maternity Pay,
  • claiming Employment Allowance,
  • reporting that no employees were paid in a tax month,
  • CIS deductions suffered where applicable.

If you need to submit an EPS, it should usually be sent by the 19th of the following tax month to ensure HMRC applies the adjustments correctly to your PAYE bill.

PAYE Year-End Deadlines for 2026/27

Alongside monthly payroll reporting and PAYE payments, employers must also meet several important year-end deadlines.

Missing these deadlines can lead to penalties and delays in updating employee tax records.

Final FPS or EPS Submission

At the end of the tax year, employers must send their final Full Payment Submission (FPS) or Employer Payment Summary (EPS) to HMRC on or before the last payday of the tax year.

This confirms that all payroll information for the year has been submitted correctly.

If you need to correct payroll information after the final submission, this should be done as soon as possible through an updated FPS.

P60 Deadline

Employers must provide employees with a P60 by 31 May following the end of the tax year.

A P60 summarises:

  • total pay for the year,
  • Income Tax deducted,
  • National Insurance contributions,
  • student loan deductions where applicable.

Employees who were on payroll on 5 April must receive a P60.

P11D and Benefits Deadlines

Employers who provide taxable benefits or expenses may need to report them through payroll or submit P11D forms and a P11D(b), depending on how the benefits are handled.

The deadlines for the 2026/27 tax year are:

RequirementDeadline
P11D and P11D(b) submission6 July 2027
Class 1A National Insurance payment (electronic)22 July 2027
Class 1A National Insurance payment (post)19 July 2027

 

 

 

Taxable benefits can include company cars, private medical insurance, and other non-cash employee benefits.

PSA (PAYE Settlement Agreement) Deadlines

A PAYE Settlement Agreement (PSA) allows employers to pay tax and National Insurance on certain benefits or expenses on behalf of employees.

To use a PSA, an agreement must first be arranged with HMRC.

Key PSA deadlines are:

RequirementDeadline
PSA agreement deadline5 July following the tax year
Class 1B National Insurance payment (electronic)22 October
Class 1B National Insurance payment (post)19 October

 

 

 

PAYE Penalties Explained

HMRC can charge penalties for both late payroll submissions and late PAYE payments. These are separate penalties and can apply at the same time.

Late Filing Penalties

Late filing penalties apply when employers fail to submit payroll information to HMRC on time, such as missing an FPS deadline.

The penalty amount depends on the size of your payroll.

Monthly FPS Late Filing Penalties

Number of EmployeesMonthly Penalty
1 to 9£100
10 to 49£200
50 to 249£300
250 or more£400

 

 

 

 

HMRC will not usually charge a penalty if an FPS is late but all payments reported on it are within three days of employees’ payday, if it is the first failure in the tax year, or if a new employer sends their first FPS within 30 days of paying an employee.

Late Payment Penalties

Late payment penalties apply when PAYE owed to HMRC is paid after the deadline.

HMRC operates a default system, where the number of late payments during the tax year affects the penalty percentage.

The first late payment in the tax year usually does not trigger a penalty unless the payment is more than six months late.

PAYE Late Payment Penalty Rates

Defaults in Tax Year, Ignoring the first late payment Penalty
1-31%
4 to 62%
7 to 93%
10 or more4%

 

 

 

 

Additional penalties can also apply:

  • 5% of unpaid PAYE after 6 months
  • another 5% after 12 months

Interest on Late PAYE

HMRC also charges interest on late PAYE payments from the date the payment becomes overdue until it is paid in full.

Interest rates can change throughout the year and are linked to the Bank of England base rate, which means the cost of late PAYE payments can add up quickly.

How to Pay PAYE to HMRC

Employers can pay PAYE to HMRC using several electronic payment methods. Choosing a reliable payment method can help reduce the risk of late payments and penalties.

Payment Methods

Common PAYE payment methods include:

  • Direct Debit
  • BACS
  • Faster Payments
  • Online banking

When making payments, allow enough time for the payment to clear into HMRC’s account before the deadline. Payments made on weekends or bank holidays may take longer to process.

Many employers choose Direct Debit or Faster Payments to help avoid delays and improve cash flow management.

PAYE Reference Numbers Explained

Using the correct PAYE reference number is essential. Incorrect references can lead to payments being allocated to the wrong tax period, which may trigger late payment notices or penalties.

Accounts Office Reference

When paying PAYE, employers must use their 13-character Accounts Office reference provided by HMRC.

This reference is different from your PAYE reference and is used specifically for PAYE payments.

An example format looks like:

123PA00123456

Tax Year and Month Suffixes

If you’re making an early payment or paying for a specific tax month, HMRC may require an additional 4-digit suffix to identify the correct period.

For example:

  • 2701 = Month 1 of the 2026/27 tax year
  • 2712 = Month 12 of the 2026/27 tax year

Using the correct suffix helps ensure PAYE payments are allocated accurately and avoids unnecessary payment disputes with HMRC.

Employment Allowance for 2026/27

Employment Allowance can reduce an employer’s annual National Insurance liability and is one of the most valuable payroll reliefs available to eligible businesses.

What is Employment Allowance?

For the 2026/27 tax year, eligible employers can reduce their annual employer National Insurance bill by up to £10,500.

The allowance is claimed through payroll and is applied against employer Class 1 National Insurance contributions throughout the tax year.

Who Can Claim Employment Allowance?

Most businesses and charities with employer National Insurance liabilities can claim Employment Allowance.

The previous £100,000 employer National Insurance threshold no longer applies, meaning more businesses may now qualify.

However, some employers are still excluded, including:

  • companies where the only employee is a director,
  • public bodies carrying out more than half of their work in the public sector,
  • businesses using personal, household, or domestic staff unless they are care workers.

Employment Allowance is usually claimed through an Employer Payment Summary (EPS) submitted to HMRC.

Need Help Managing PAYE?

Managing payroll alongside changing HMRC requirements can quickly become time consuming, especially as your business grows.

At Ryans, our dedicated payroll team helps businesses stay compliant with PAYE and RTI reporting requirements while reducing the risk of penalties and payroll errors.

Our payroll services include:

  • PAYE and payroll administration
  • RTI submissions and year-end reporting
  • Statutory payments and pension administration
  • Employee payslips and payroll reporting
  • Support with Sage Payroll software
  • Assistance with P60s, P11Ds, and other HMRC requirements

Whether you employ a handful of staff or manage a larger workforce, we can help simplify payroll and ensure your PAYE obligations are handled accurately and on time.

To discuss our payroll services, contact Ryans today.

PAYE FAQs for 2026/27

What happens if PAYE is 1 day late?

If PAYE is paid late, HMRC may charge interest from the due date until payment is received. Repeated late payments during the tax year can also trigger penalties under HMRC’s default system.

Can I pay PAYE quarterly?

Some smaller employers can apply to pay PAYE quarterly instead of monthly. This is usually available where average monthly PAYE and National Insurance liabilities are less than £1,500.

Do I need to submit an FPS if no employees are paid?

No. If no employees are paid during a tax month, you would usually submit an Employer Payment Summary (EPS) instead to tell HMRC that no payments were made.

What is the penalty for a late FPS?

Late FPS penalties depend on the number of employees on your payroll. Penalties start at £100 per month for smaller employers and increase for larger payrolls.

When are P60s due?

Employees must receive their P60 by 31 May following the end of the tax year.

What’s the difference between FPS and EPS?

An FPS reports employee pay, tax, and deductions each time employees are paid.

An EPS is used to report adjustments or periods where no employees were paid. It can also be used to claim Employment Allowance or recover statutory payments.

Can HMRC waive PAYE penalties?

In some cases, HMRC may cancel penalties if you have a reasonable excuse for missing a deadline. This could include serious illness, technical failures, or unexpected circumstances outside your control.

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