Glossary · UK
What is PAYE?
Pay As You Earn — the system HMRC uses to collect Income Tax and NI from employees.
Full Definition
PAYE (Pay As You Earn) is the system used by HMRC to collect Income Tax and National Insurance contributions from employees throughout the year. Your employer calculates the amount owed based on your tax code and deducts it from your gross pay before paying you. PAYE has been in place since 1944. It means most employees never need to file a tax return — although you may still need Self Assessment if you have other income (self-employed work, property income, large dividends, etc.).
Related Calculators
See Also
Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.