What is Real Time Information (RTI) in UK payroll?

Full answer

Real Time Information (RTI) transformed UK payroll from annual end-of-year reporting to a pay-day-by-pay-day system. Since April 2013 virtually all employers must submit payroll data to HMRC electronically on or before each payment date. **Core RTI submissions** - **Full Payment Submission (FPS)**: sent on or before payday, reporting each employee's gross pay, tax, National Insurance, student loan deductions and year-to-date totals. - **Employer Payment Summary (EPS)**: sent by the 19th of the following month when no FPS is due, or to claim reductions (e.g. statutory payments recovered, employment allowance). - **Earlier Year Update (EYU)**: used to correct prior-year figures after the tax year closes. **Why it matters for employees** HMRC uses FPS data to update Universal Credit awards in near-real time, issue revised tax codes, and flag discrepancies quickly. If your employer sends a late FPS, your tax code or UC payment can be delayed. **Why it matters for employers** Late or incorrect FPS submissions attract automatic penalties. For employers with 1-9 employees, a single late submission per year is normally overlooked; from the second offence, a penalty of £100/month applies. Larger employers face higher penalties. **Employment Allowance under RTI** From 2026/27 the Employment Allowance is £10,500/yr and must be claimed via the EPS at the start of the tax year. It reduces the employer Class 1 NI bill. Employers with a sole director who is also the only employee are excluded. **2026/27 NI context** Employer NI rate is 15% on earnings above the secondary threshold of £5,000/yr (reduced from £9,100 following the April 2025 Budget change). Every FPS must correctly reflect this rate for each employee to avoid reconciliation errors.

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