Payroll and RTI made simple: UK employer essentials, deadlines and auto-enrolment checks

Getting payroll right matters. Pay your team accurately, report to HMRC on time, and you avoid needless penalties and stress. If you are new to PAYE or growing fast, the jargon can feel like a second job. This guide strips it back so you can run payroll confidently, file Real Time Information correctly, and meet auto-enrolment duties without surprises.

 

We cover how RTI works, when to send Full Payment Submissions and Employer Payment Summaries, what changes if you pay early, and how to handle starters and leavers. You will also find a plain guide to auto-enrolment eligibility, postponement, common exclusions, and the typical costs to budget.

 

And if you decide you would rather not wear the payroll hat, MBSC can run RTI payroll for you and keep you compliant, with friendly ongoing advice.

Set up basics: PAYE, pay dates and records

Before your first payday, register as an employer for PAYE and set a consistent pay frequency, for example monthly or weekly. Keep accurate employee records, including right to work, tax code notices, starter details, written statements of employment particulars, and any student loan or postgraduate loan flags. Choose software that can file RTI and produce itemised payslips.

 

Good habits help later. Fix a clear payroll cut-off, reconcile gross to net pay, and review any benefit in kind or attachment orders before finalising each run.

What RTI is and how it works

Real Time Information is HMRC’s digital reporting for PAYE. Instead of a single annual return, you send pay and deduction data each time you pay employees. This keeps HMRC’s records current so tax codes and liabilities update through the year.

 

An RTI cycle usually includes:

 

• Full Payment Submission (FPS): sent on or before each payday, with pay, tax, National Insurance contributions, student loan deductions, pension deductions, and year-to-date figures.
• Employer Payment Summary (EPS): sent when adjustments are needed, such as claiming Employment Allowance, recovering statutory payments, or reporting no payments in a tax month.

 

Most small employers only need the FPS every pay run. Use the EPS when there is an adjustment or when you did not pay anyone in a tax month.

Deadlines: FPS on or before payday, EPS by the 19th

You must submit the FPS on or before the date employees are paid. If you pay on the 25th, file the FPS no later than the 25th. If your payday falls at the weekend or a bank holiday, submit on or before the day you actually pay. EPS filings are due by the 19th of the following tax month to affect that month’s PAYE account.

 

If you pay earlier than planned, file earlier. HMRC treats early pay as the actual payday, which can also shift tax-period allocation in month 12 or around year end, so plan ahead at Christmas and in March or April.

Starters, leavers and common changes

For a new starter, collect their P45 or use the starter checklist in your software to set the right tax code and student loan plan. Include the starter flag on the first FPS you send for them. For a leaver, process the leaving date in the payroll, issue the P45, and mark the final FPS for that employee accordingly.

 

Update payroll promptly for:

 

• Statutory payments such as SSP, SMP, SPP, ShPP, SAP, and parental bereavements
• Student loan and postgraduate loan notices
• Tax code changes, court orders, and pension changes
• Benefits in kind if you payroll them

Early payments, late filings and penalties

If you bring payday forward, send the FPS before funds land. Late FPS filings can attract automatic penalties, typically based on the number of employees. HMRC can also charge interest on late PAYE and National Insurance. Avoid the most common errors by locking your pay date policy, running validation checks in software, and reconciling to your PAYE account monthly.

Auto-enrolment essentials

You must assess workers each pay period for auto-enrolment. In broad terms, eligible jobholders are aged 22 to State Pension age, ordinarily working in the UK, and earning at or above the annual earnings trigger. You must automatically enrol eligible jobholders and make employer contributions.

 

You can postpone assessment and enrolment for up to three months from a trigger date, for example a new starter’s first day or the date they first cross the earnings threshold. You must issue a postponement notice and still assess at the end of postponement.

 

Excluded groups typically include the genuinely self-employed, company directors without contracts of employment when there is no other staff, and workers under 16 or over 74. Non-eligible jobholders and entitled workers are not auto-enrolled but may have opt-in or join rights, and different contribution rules can apply.

 

Budget for contributions, pension provider fees, and the admin time or software costs to assess earnings, send statutory letters, manage opt-outs and refunds, and keep records for at least six years.

Software choices: HMRC Basic PAYE Tools vs cloud payroll

HMRC’s free Basic PAYE Tools can handle very simple PAYE, calculate liabilities, and submit RTI. It is limited for multi-employee setups, pensions integration, and automation.

 

Cloud payroll software typically offers:

 

• Integrated RTI filing and payslips
• Auto-enrolment assessments, letters, and pension data files
• Leave tracking, journal posting to accounting software, and employee self-service

 

Most growing employers outgrow Basic PAYE Tools quickly. If you only pay one or two directors with straightforward pay, the free tool can be enough. For regular staff and pensions, cloud software usually saves time and reduces mistakes.

When to outsource payroll

Outsource if payroll accuracy, RTI timing, or pension admin is causing stress, or when you need cover for holidays and sickness. Outsourced support can also help if you pay bonuses or overtime, have frequent starters and leavers, or face irregular pay dates. MBSC provides a practical payroll management service that includes RTI payroll filing, guidance when pay dates change, and ongoing advice so you can focus on running the business.

 

If you want local, joined-up help across bookkeeping, VAT and payroll, our team supports clients across Surrey. You can learn more about our payroll services or speak to us if you need a reliable partner for compliance.

Typical costs to plan for

Beyond gross pay, plan for:

 

• Employer National Insurance contributions where applicable
• Employer pension contributions and provider fees
• Payroll software subscriptions or outsourced payroll fees
• Statutory payments and holiday pay accruals
• Apprenticeship Levy if your pay bill reaches the threshold

 

Costs vary with headcount, pay levels, and software choice, so review this regularly as you grow.

Quick FAQ

• What is Real Time Information for HMRC payroll? RTI is the system that requires you to send pay and deduction data to HMRC every time you pay employees, mainly through the FPS and, when needed, the EPS.
• When should RTI be submitted? Send the FPS on or before each payday. Send any EPS by the 19th of the following tax month for it to apply promptly.
• What is included in an RTI submission? The FPS includes gross pay, tax, National Insurance, pensions, student loans, and year-to-date totals, plus starter or leaver markers. The EPS includes adjustments and claims such as Employment Allowance or statutory payment recovery.
• How often should payroll information be sent to HMRC under RTI? Every pay run, aligned to your pay frequency, with an FPS on or before payday.
• How soon do I have to auto-enrol a new employee? Assess them from the start. If eligible, enrol them immediately or use postponement for up to three months with the correct notice.
• What are the auto-enrolment rules in brief? Assess each pay period, enrol eligible jobholders, contribute at least the minimum rates, issue required communications, manage opt-ins and opt-outs, and keep records.
• Who is excluded from auto-enrolment? Typically the self-employed, directors without employment contracts when there are no other staff, and workers under 16 or over 74. Others may not be automatically enrolled but can have opt-in or join rights.
• Does HMRC have free payroll software? Yes, HMRC provides Basic PAYE Tools for simple setups. Many employers prefer cloud software for automation and pensions.
• Do I need an accountant to run payroll? Not legally, but many small businesses use an accountant to reduce errors, stay compliant, and save time.

A simple next step

Payroll does not have to be a headache. If you want a friendly, Chartered Certified team to run RTI payroll, manage auto-enrolment, and keep you on track, MBSC is here to help. Explore our payroll services to see how we work, or book a free 15 minute chat and get practical advice tailored to your business.

 

Helpful reads for local businesses in Surrey:

 

• If you want an ongoing partner for PAYE and RTI, see our payroll services.
• For joined-up bookkeeping support that keeps payroll smooth, explore our bookkeeping services.
• If you prefer a local adviser who understands Surrey businesses, learn more about our accountants in Surrey.