PAYE - Pay As You Earn

What are the implications?

One of the most common ways for companies to pay their employees is through a scheme called Pay As You Earn (PAYE), which allows HM Revenue and Customs to collect National Insurance contributions from the employee’s pay and for tax to be deducted.

Employers have a legal obligation to ensure that every employee whose wages are over the National Insurance Lower Earnings Limit of £90 per week has the correct amount deducted from their pay, including any expenses, overtime or statutory sick pay etc, through PAYE. However, benefits such as company cars and medical insurance are not covered by PAYE and will be discussed later.

For more information on PAYE please visit: http://www.hmrc.gov.uk/paye/intro-basics.htm