Answers · UK 2025/26
What is HMRC's Basic PAYE Tools?
Basic PAYE Tools is a free software application from HMRC that allows employers with up to 9 employees to calculate and report PAYE taxes to HMRC via RTI (Real Time Information).
Full answer
HMRC's Basic PAYE Tools (BPT) is a free payroll software package designed for small employers who want to run payroll and submit RTI returns to HMRC without paying for commercial software. **Who it is for:** - Employers with **up to 9 employees** (HMRC's recommended maximum for BPT). - Employers who do not need full payroll features such as automated payslips, HR management, or extensive reporting. **What it does:** - Calculates income tax and National Insurance for each employee. - Sends **Full Payment Submissions (FPS)** to HMRC each payday. - Sends **Employer Payment Summaries (EPS)** to claim statutory payments (SMP, SSP) or Employment Allowance. - Handles student loan deductions, construction industry scheme (CIS) deductions, and pension auto-enrolment notifications. - Supports weekly, fortnightly, and monthly pay frequencies. **Limitations:** - Does not produce payslips (you must create these separately). - No HR features, leave tracking, or automatic pension enrolment interfaces. - Not cloud-based — data is stored locally on your device. - Can only be installed on Windows or Mac (no mobile app). **Download:** Available free from GOV.UK. HMRC updates it at the start of each tax year. **Alternatives for small employers:** - **FreeAgent** (free with some business bank accounts) - **Xero, Sage, BrightPay** — paid but offer full payslip generation, auto-enrolment, and HR features. - **Payfit, Modulr** — cloud-based alternatives. For employers growing beyond 9 staff or needing payslip generation, commercial payroll software will typically be more efficient.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.