Real Time PAYE Information Reporting and Payroll Software

As of April the 6th 2013, Real Time PAYE Information (RTI) must be submitted to HM Revenue & Customs (HMRC). Under the new RTI system, employers are required to send PAYE reports every time employees are paid. HMRC require information regarding who has been paid and how much. They will also need to know about deductions for national Insurance and tax. RTI replaces annual payroll reports, with the aim being to make PAYE more accurate and easier to use.

In order to comply with the new legislation, employers, their accountants or payroll outsourcing agents, will require HMRC compatible payroll software. RTI data must be submitted every time payroll is run, regardless of how many staff are paid and how often.

Employers with fewer than ten employees can use the basic tool available free from HM Revenue & Customs. Larger organisations will need to find suitable commercial payroll software.

To prepare for Real Time PAYE, employers will need to ensure all data they hold for employees is fully up to date. The initial report will be used by HMRC to match the information to its existing records. This is known as the Payroll Alignment Process. Missing or incorrect details will invariably result in problems and delays. However, once everything has been set up and approved, submitting RTI is quick and easy.

There are a range of different products available on the market. So, what should employers and payroll departments be looking for when choosing payroll software?

What types of submissions does the software support?

There are a number of submissions required by HMRC. However, the types of submission vary depending upon company size. HMRC should be able to advise regarding what they require from each individual company.

Employers Alignment Submission (EAS) – This is usually for organisations employing 250 or more employees.

Full Payment Submission (FPS) – Employers will need to submit a Full Payment Submission each time their employees are paid. Details include payments made to employers and any allowable deductions. This information will be used by HMRC to work out tax and National Insurance Contributions due.

Employer Payment Summary (EPS) – The Employer Payment Summary is needed to inform HMRC if there are any changes to figures previously submitted, such as a reduction in the total, or a nil payment.

National Insurance Verification Request (NVR) – This submission can be used at any time and will allow employers to request or verify a National Insurance Number.

Does the software support any additional functionality?

It is possible to find software which, as well as electronic reporting, has additional functions to help employers to manage their payroll. This can make payroll and reporting quicker and easier. For details of how to use Payroll Software, users can refer to the supplier or find information online.


Before making a final decision regarding which software to use for RTI, consider the security features. Any questions about this if you are unsure, should be directed to the software suppliers.

This article is in association with CIPHR

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