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Pay as you earn (PAYE)

Term

Pay as you earn (PAYE for short) is a way to pay your tax monthly through your salary instead of one lump sum payment.

Using P45 info, your employer will create a tax code and pay income tax and national insurance through your salary, these payments will be outlined in the P60. Student loan and pension contributions are also usually paid via PAYE.

Taxes are usually paid via employment, other sources of income can’t be paid through PAYE, you have to file a Self Assessment for that. High Earners, those earning >£100,000 are expected to also submit a self assessment.

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