Real Time Information (RTI) is how employers report pay and deductions to HMRC. Send a Full Payment Submission (FPS) on or before payday. If nobody is paid during a tax month, send an Employer Payment Summary (EPS) by the 19th of the following month, unless HMRC already has the relevant period of inactivity. Reporting late and paying late are separate failures, so check which obligation a notice concerns.
When a late report attracts a penalty
The monthly late-filing penalty depends on employee numbers: £100 for 1 to 9, £200 for 10 to 49, £300 for 50 to 249 and £400 for 250 or more. A missing EPS can also lead to a penalty. HMRC sends penalty notices quarterly; a monthly penalty is not a separate charge for every late employee payment.
HMRC normally leaves the first reporting failure in a tax year unpenalised. That exception does not apply to registered annual schemes. A new employer is also protected if the first FPS is sent within 30 days of first paying an employee. Reports within three days of payday are normally unpenalised, but repeated use of that easement can lead to a penalty. The reporting deadline itself has not moved.
A missing report can cause HMRC to estimate the PAYE due. Submit the missing FPS or EPS for the relevant month to replace that estimate. Updating year-to-date figures in a later FPS does not, by itself, remove an earlier specified charge. Check the account after correcting the reports.
When PAYE is paid late
Monthly PAYE and National Insurance normally reach HMRC by the 22nd of the following tax month electronically, or the 19th by post. Eligible small employers can arrange quarterly payment. Allow for the clearing time of your payment method. A Direct Debit collected under HMRC's notified timetable follows its own collection arrangements.
For monthly and quarterly payments, exclude the first late payment when counting defaults. The next one to three defaults attract 1%, four to six attract 2%, seven to nine attract 3% and ten or more attract 4% of the late amounts concerned. If an amount remains unpaid after six months, another 5% applies, with a further 5% after twelve months. These additional charges can apply even if only one payment was late.
Interest accrues separately from the payment due date. Use HMRC's current late-payment interest rate for each period; the official rate used for employee loans is a different rate. Interest on late PAYE and employer National Insurance is not tax-deductible. Penalties are also disallowed.
Set up and check your Direct Debit
You can arrange a recurring PAYE Direct Debit through your HMRC online account. There is no £30,000 minimum. HMRC currently asks you to set it up at least four working days before the payment due date. It normally collects shortly after the 22nd, or four working days after a return filed after the 19th. Check the advance notice, bank balance and subsequent collection. A Direct Debit does not correct missing or inaccurate payroll reports.
Pension duties have separate penalties
The Pensions Regulator can issue a compliance notice, a £400 fixed penalty and an escalating daily penalty between £50 and £10,000, depending on staff numbers. Respond by the deadline on the notice and send evidence when the problem is resolved. Our workplace pension guide explains the duties, including the exceptions for director-only companies.
Check the notice and appeal promptly
You can normally appeal an RTI or PAYE penalty within 30 days. First check the payment dates, submission receipts, employee count and any applicable exception. If the notice is wrong, explain the error and supply the records. If a valid reason stopped you filing or paying, describe what happened, when it began and ended, and what you did to put things right.
A serious illness, bereavement, fire, flood or computer failure can be a reasonable excuse. Software failure is not automatically excluded: HMRC looks at the circumstances and your evidence. Keep error messages, service notices and a dated account of your attempts. File or pay promptly once the difficulty ends. If the appeal is rejected, the decision explains the review and tribunal options.
Keep the next payroll on schedule
Agree the payday and a deadline for changes to hours, overtime and starters. Check the draft payroll, submit the FPS on time and retain its acceptance receipt. Reconcile payments to the HMRC account and investigate differences. An annual payroll scheme is only suitable where everyone is paid once a year in the same tax month and HMRC is paid annually; it does not allow monthly salaries to be reported once a year.
Questions employers ask
What is the penalty for a late RTI submission?
Monthly penalties range from £100 to £400 by employee numbers. The first failure in a tax year is normally unpenalised, except for annual schemes. New-employer and three-day easements can also apply. File on or before payday and check the notice before deciding whether to appeal.
What can be a reasonable excuse?
Serious illness, bereavement, loss of records or a computer or software failure may be a reasonable excuse if it prevented you meeting the obligation. Explain what happened, keep evidence and put the failure right promptly once the problem ends. HMRC assesses the circumstances.
Can I file within three days of payday?
The deadline remains on or before payday. HMRC normally does not penalise a report where all payments were reported within three days of payday, but persistent late filing may attract a penalty.
Is interest on late PAYE tax-deductible?
Interest on late PAYE and Class 1, Class 1A and Class 1B National Insurance is not tax-deductible. Penalties are also disallowed. Interest on late Corporation Tax has different rules and should be considered separately.
Official sources
Checked on 6 September 2026: late payroll reports, late PAYE payments, Direct Debit, reasonable excuses, interest deductions and pension enforcement.