PAYE Real Time Information (RTI) submissions are a critical part of payroll management for UK employers. Getting every PAYE RTI submission right—on time and without errors—is not only a regulatory requirement from HMRC, but also a foundation for financial control and business confidence. This guide explains how to run PAYE RTI submissions correctly every pay run, with actionable advice and real-world examples for finance teams and business owners.
Understanding PAYE RTI and Its Importance
PAYE RTI submissions have transformed payroll by requiring employers to report detailed pay and deduction information to HMRC every time employees are paid. This real-time data enables HMRC to accurately calculate tax, National Insurance, student loans, and benefit entitlements. Mistakes or delays in PAYE RTI submissions can result in incorrect employee records, compliance breaches, and financial penalties.
For SMEs and scaling businesses, the accuracy and timeliness of each PAYE RTI submission is directly linked to good financial governance. RTI data supports both statutory filings and management insight, helping leaders make informed decisions while staying compliant with evolving HMRC regulations.
Preparing Your Payroll Data for RTI
Solid preparation is essential before running PAYE RTI submissions. All payroll data—employee details, tax codes, National Insurance numbers, pay rates, statutory payments, and deductions—must be current and accurate. Even small data errors are a leading cause of RTI rejections and HMRC queries.
Key preparation steps include:
- Verifying employee records (names, addresses, dates of birth, NI numbers)
- Ensuring new starters and leavers are processed correctly for the relevant pay period
- Checking all pay elements and statutory deductions have been applied correctly
- Reconciling gross-to-net calculations with previous periods to catch anomalies
For example, a growing tech company reduced HMRC rejections by implementing a pre-payroll checklist and running monthly audits of employee data. Adopting a robust process for running payroll each month will help your organisation embed accuracy and reduce costly errors.
Executing the RTI Submission Process
PAYE RTI submissions are made electronically via HMRC-recognised payroll software. Each pay run requires a Full Payment Submission (FPS) reporting pay, tax, and deductions for every employee. In addition, an Employer Payment Summary (EPS) may be needed to report statutory payments reclaimed or to confirm no employees were paid in a pay period.
- Finalise payroll and confirm all calculations are accurate
- Generate the FPS and review for completeness and data quality
- Submit the FPS to HMRC on or before the day employees are paid
- If adjustments or nil payments apply, submit an EPS by the 19th of the following tax month
Retain digital receipts or confirmations for all PAYE RTI submissions. This audit trail is invaluable in the event of HMRC queries or compliance checks. For example, a retail chain avoided late filing penalties by providing HMRC with submission timestamps and digital receipts after a technical disruption delayed their FPS.
Managing Common RTI Submission Errors
Even well-run payrolls can encounter RTI submission errors. Frequent issues include invalid employee details, tax code mismatches, and late submissions. HMRC will flag or reject submissions containing errors, and uncorrected issues can result in penalties or disrupted employee tax records.
- Missing or invalid National Insurance numbers
- Incorrect pay or deduction entries
- Omitting new starters or failing to process leavers in the correct period
- Late FPS/EPS submissions without reasonable cause
To resolve errors, review the feedback from your payroll software or HMRC, update the underlying data, and resubmit the FPS or EPS as soon as possible. Maintain clear records of corrections and communicate transparently with HMRC. For instance, a manufacturing SME avoided escalating penalties by proactively contacting HMRC after a data entry error and swiftly resubmitting a corrected FPS.
Compliance and Record-Keeping Obligations
Compliance does not end with submitting PAYE RTI files. Employers must keep all payroll records—payslips, FPS/EPS submissions, and related correspondence—for at least three years. This documentation is essential for answering HMRC queries, supporting preparing quarterly tax filings, and demonstrating your compliance with employment and tax regulations.
Schedule regular reviews of your payroll documentation and end-to-end processes. This helps you spot risks early, improve data accuracy, and strengthen your governance framework—especially as your business grows or as regulations change.
Integrating Payroll with Broader Financial Management
Strong RTI submission practice should be integrated into your broader financial systems. Linking payroll outputs directly into your accounting software ensures payroll costs, liabilities, and statutory payments are accurately reflected in management accounts. This creates a seamless audit trail from payroll through to financial reporting from your books, making year-end and compliance processes much easier.
For example, an engineering firm improved management reporting and reduced reconciliation errors by automating payroll journal postings into their accounts package. Regular reconciliation between payroll and accounts, especially during periods of business change or growth, helps ensure data consistency and compliance.
Practical Considerations for Outsourcing or Automating Payroll
The complexity of PAYE RTI submissions and the risk of non-compliance lead many SMEs to outsource payroll to a specialist provider. Outsourcing can deliver accuracy, up-to-date compliance, and peace of mind—provided you select a provider with proven UK payroll and RTI expertise. Review service levels and ask for evidence of successful RTI compliance.
If you run payroll in-house, invest in technology that validates data, prompts timely PAYE RTI submissions, and adapts to HMRC rule changes. Automation reduces manual work and errors, but it is vital to pair technology with regular human review and process audits to ensure lasting compliance.
Conclusion
Consistent, accurate PAYE RTI submissions are essential for compliance, payroll governance, and sound financial management. By embedding best practice into your workflow, you minimise risk and support your business’s growth. To summarise, ensure you:
- Prepare and check payroll data thoroughly before each submission
- Submit each FPS/EPS accurately and on time, retaining digital receipts
- Review and resolve errors promptly, keeping a clear audit trail
- Integrate payroll data with your wider financial systems
- Regularly review processes, whether in-house or outsourced
Whether you manage PAYE RTI submissions internally or through a provider, a disciplined, process-driven approach ensures compliance, reduces costs, and builds trust with employees and HMRC alike.