The Pay As You Earn (PAYE) system is a collection mechanism which aims to collect the tax due for the tax year on various types of employment income (including wages and salaries) by making a deduction on account of tax each time an employee is paid. The amount deducted must be paid over to HM Revenue & Customs (HMRC). The PAYE system imposes various compliance obligations on employers.

This topic contains advice on how to set up a PAYE scheme, details on the tax rates and allowances for 2018/19 and explains the information that employers need to provide to HMRC under Real Time Information (RTI).

In Practice

Tax Rates and Allowances for 2018/19 and 2019/20

For 2018/19 and 2019/20, the rates of tax are:

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