Pay employers' Class 1A National Insurance

Overview

You must pay Class 1A National Insurance contributions on work benefits you give to your employees, such as a company mobile phone.

You must also pay them on payments of more than £30,000 that you make to employees when their employment ends, such as a redundancy payment (‘termination awards’).

You only have to pay Class 1A National Insurance contributions on termination awards if you have not already paid Class 1 National Insurance contributions on them.

There’s different guidance on payment of Class 1A National Insurance on sporting testimonials.

When to pay

When you pay Class 1A National Insurance contributions depends on whether they are work benefits or termination awards.

Work benefits

You need to pay contributions on work benefits by 22 July each year for the previous tax year. You’ll need to pay by 19 July if paying by post.

Termination awards

You pay contributions on termination awards through PAYE.

Pay contributions on work benefits online

You can pay online using direct debit (one-off payment), bank transfer, credit card or corporate debit card.

Pay now

Other ways to pay contributions on work benefits

Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You may have to pay interest and penalties if your payment is late.

The time you need to allow depends on how you pay.

Up to 2 days

online or telephone banking (Faster Payments)

CHAPS

3 working days

online by debit or corporate credit card

Bacs

at your bank or building society

Direct Debit (if you’ve set one up with HMRC before)

by cheque through the post

5 working days

Direct Debit (if you have not set one up with HMRC before)

If the deadline falls on a weekend or bank holiday, your payment must arrive in HMRC’s bank account on the last working day of the week (unless you’re using Faster Payments).

Bank details for online or telephone banking, CHAPS, Bacs

You can pay by Faster Payments, CHAPS or Bacs to HM Revenue and Customs’ (HMRC) account.

Sort code | Account number | Account name

08 32 10 | 12001039 | HMRC Cumbernauld

Reference number

You’ll need to give a 17-character number as the payment reference. This starts with your 13-character Accounts Office reference number.  Then add the tax year you want to pay for and the digits ‘13’ to make sure your payment is assigned correctly.

Tax year | Add these digits to your reference number

2013 to 2014 | 1413

2014 to 2015 | 1513

2015 to 2016 | 1613

You can find your Accounts Office reference number on:

the letter HMRC sent you when you first registered as an employer

the front of your payment booklet or the letter from HMRC that replaced it

You must make a separate payment for Class 1A payments. You cannot add them to a standard PAYE payment.

How long it takes

Payments by Faster Payments (online or telephone banking) usually reach HMRC on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Overseas payments

Use these details to pay from an overseas account:

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB62BARC20114770297690 | BARCGB22 | HMRC Cumbernauld

HMRC’s banking address is:

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

Make your payment to ‘HMRC Cumbernauld’ office. You’ll need to give a 17-character payment reference. This starts with your 13-character Accounts Office reference number. You can find this on:

the letter HM Revenue and Customs (HMRC) sent you when you first registered as an employer

Add the tax year you want to pay for and the digits ‘13’. If you do not do this, your payment will be allocated to the current tax year instead.

If you’re unable to pay your Class 1A National Insurance bill in full by card, you should use another payment method like a bank transfer.

How long it takes

Allow 3 working days for your payment to reach HMRC’s bank account.

At your bank or building society

You can pay at a branch by cash or cheque.

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your Class 1A payslip reference number on the back of your cheque. You’ll find the reference number on the payslip provided by HMRC.

You must use your Class 1A payslip when paying in. Do not use a standard PAYE payslip from your booklet or your payment will be delayed.

How long it takes

Direct Debit

Set up a new Direct Debit through your business’s HM Revenue and Customs (HMRC) online account to make a single payment for Class 1A contributions.

You cannot use an existing Direct Debit for standard PAYE payments.

You’ll need to set up a payment each time you pay HMRC through Direct Debit.

Making the payment

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC.

What to include

Write your Class 1A reference number on the back of the cheque. You’ll find this on your payslip.

Include the payslip HMRC sent you. You cannot use a standard PAYE payslip from your booklet. Do not fold the payslip or cheque or fasten them together.

Your payment may be delayed if you do not fill in your cheque properly.

If you want a receipt, include a note asking for one.

If you do not have a payslip

You can print a payslip to use to pay by post. You cannot use this at a bank.

Check your payment has been received

Check your HM Revenue and Customs (HMRC) online account - it should update within 6 working days.

If you’re paying by cheque through the post, you can include a letter with your payment to request a receipt from HMRC.

Class 1A contributions on sporting testimonials

A sporting testimonial is an event or series of events to honour a player for their service, such as when the player retires.

The testimonial committee must pay Class 1A National Insurance if the payment to a player is:

more than £100,000

not in the player’s contract

The payment is usually the profit from the event.

The committee must pay the contributions on the payment through PAYE.


Pay employers' PAYE

Overview

You must pay your PAYE bill to HM Revenue and Customs (HMRC) by:

the 22nd of the next tax month if you pay monthly

the 22nd after the end of the quarter if you pay quarterly - for example, 22 July for the 6 April to 5 July quarter

Pay now

If you pay by cheque through the post the deadline is the 19th of the month.

What you’re paying

Your PAYE bill may include:

employee Income Tax deductions

Class 1 and 1B National Insurance

Class 1A National Insurance on termination awards and sporting testimonials

Student Loan repayments

Construction Industry Scheme (CIS) deductions

your Apprenticeship Levy payments (starting from April 2017) if you, or employers you’re connected to, have an annual pay bill of more than £3 million

You pay your Class 1A National Insurance on work benefits that you give to your employees separately.

PAYE Settlement Agreements are also paid separately.

Ways to pay

Make sure you pay HMRC by the deadline. You may have to pay interest and penalties if your payment is late.

The time you need to allow depends on how you pay.

You can no longer pay at the Post Office.

Same or next day

online or telephone banking (Faster Payments)

CHAPS

through your online bank account

3 working days

by debit or corporate credit card online

Bacs

at your bank or building society (cash or cheque)

Direct Debit (if you’ve already set one up)

by cheque through the post

5 working days

Direct Debit (if you have not set up one before)

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you’re paying by Faster Payments).

Payment booklets

You’ll need a payment booklet from HMRC to pay at your bank or building society, or by post. If you do not have one, ask HMRC to send it to you.

If you’re no longer using your payment booklet, you can ask HMRC to stop sending it.

HMRC will automatically stop sending your payment booklet if you make 2 or more electronic payments in a year.

Direct Debit

Set up a Direct Debit through your business’s HM Revenue and Customs (HMRC) online account to make a single payment. This means you’ll need to set up a payment each time you pay HMRC through Direct Debit.

Reference number

You’ll need your 13-character accounts office reference number to make a payment. You can find this on the letter HMRC sent you when you first registered as an employer.

How long it takes

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.

The payments will show on your bank statement as ‘HMRC NDDS’.

Early or late payments

Make sure you also enter the correct year and month the payment is for in the separate boxes provided.

Make an online or telephone bank transfer

You can make a transfer from your bank account by Faster Payments, CHAPS or Bacs.

Sort code | Account number | Account name

08 32 10 | 12001039 | HMRC Cumbernauld

If your account is overseas

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB62BARC20114770297690 | BARCGB22 | HMRC Cumbernauld

Reference number

You’ll need to use your 13-character accounts office reference number as the payment reference. You can find this on either:

the front of your payment booklet or the letter from HMRC that replaced it

Your payment may be delayed if you use the wrong reference number.

How long it takes

Payments made by Faster Payments (online or telephone banking) will usually reach HMRC on the same or next day.

CHAPS payments usually reach HMRC the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Early payments

If you pay monthly

You need to add extra numbers to your reference number if you pay before the 6th of the tax month that payment is due.

Work out the number you need to use.

If you pay quarterly

You need to add extra numbers to your reference number if you pay before the 6th of the second month in the quarter.

Work out the number you need to use.

Late payments

You need to add extra numbers to your reference number if you pay on or after the 5th of the tax month after payment was due. Do this whether you pay monthly or quarterly.

Work out the number you need to use. You use a different tool if the payment was for a previous tax year.

Multiple PAYE schemes

Send an online CHAPS enquiry form if you want to make a single payment via CHAPS for multiple PAYE schemes.

HMRC’s banking address is:

Approve a payment through your online bank account

You can pay your PAYE bill directly using your online or mobile bank account.

Once you’ve signed into your HMRC account, select ‘start a payment’ and then ‘pay by bank account’. You’ll then be directed to sign in to your online or mobile banking account to approve your PAYE payment.

The payment is usually instant but sometimes it takes up to 2 hours to show in your account.

You’ll need to have your online banking details ready to pay this way.

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

If you’re unable to pay your employers’ PAYE bill in full by card, you should use another payment method like a bank transfer.

Reference number

You’ll need to use your 13-character accounts office reference number as the payment reference. You can find this on the letter HM Revenue and Customs (HMRC) sent you when you first registered as an employer.

How long it takes

Allow 3 working days for your payment to reach HMRC’s bank account.

Early or late payments

Make sure you enter the correct year and month the payment is for in the separate boxes provided.

Pay for the previous tax year

Select the previous tax year and ‘month 12’ for the last tax year. If you do not do this, your payment will go to the current tax year instead.

At your bank or building society

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your 13-character accounts office reference number on the back of the cheque. You will find the reference number on the letter HM Revenue and Customs (HMRC) sent to you when you first registered as an employer.

You’ll need to pay in using the payslip for the correct period. If you do not have one of these, ask HMRC to send you a payment booklet.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC) if you have fewer than 250 employees.

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC.

What to include

Write your 13-character Accounts Office reference number on the back of the cheque. You can find this number on the letter HMRC sent you when you first registered as an employer.

Your payment may be delayed if you do not fill in your cheque properly.

Include the payslip for the correct period. If you do not have this, you can either:

ask HMRC to send you a payment booklet

print off a replacement payment slip

You can only use a replacement payslip to pay by post. You cannot use this at a bank.

Do not fold the payslip or cheque or fasten them together.

You can include a letter with your payment to ask HMRC for a receipt.

Check your payment has been received

Check your HM Revenue and Customs (HMRC) online account - it should update within 6 working days of making payment.

If you’re paying by post, you can include a letter with your payment to request a receipt from HMRC.

Tell HMRC no payment is due

You must tell HM Revenue and Customs (HMRC) if you have not paid any employees for at least one tax month.

You can tell HMRC by filling in an Employer Payment Summary (EPS).

You must send it by the 19th of the month following the tax month when no employees were paid.

If you do not send an EPS, HMRC will send you a notice estimating how much you owe. You may have to pay a penalty.

Telling HMRC in advance

You can tell HMRC that you will not pay any employees up to 12 months in advance.

Contractors in the Construction Industry Scheme (CIS) who have no payments to make need to tell HMRC through a CIS return and a EPS. CIS contractors with payments to make only need to file a CIS return.


Payroll: annual reporting and tasks

Overview

As an employer running payroll, you need to:

report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60

prepare for the new tax year, which starts on 6 April

What you need to do | When

Send your final payroll report of the year | On or before your employees’ payday

Update employee payroll records | From 6 April

Update payroll software | From 6 April, or earlier if the software provider asks you to

Give your employees a P60 | By 31 May

Report employee expenses and benefits | By 6 July

Send your final payroll report

Send your final Full Payment Submission (FPS) on or before your employees’ last payday of the tax year (which ends on 5 April).

Put ‘Yes’ in the ‘Final submission for year’ field (if available) in your payroll software.

If you run more than one payroll under the same PAYE scheme reference (for example for employees you pay weekly and monthly), include the end-of-year information in your last report.

You need to send extra forms if you claimed a National Insurance holiday for new employers.

When to send an Employer Payment Summary (EPS)

You should send your final report in an EPS instead of an FPS if any of the following apply:

you forgot to put ‘Yes’ in the ‘Final submission for year’ field in your last FPS

your software does not have a ‘Final Submission for year’ field on the FPS

you did not pay anyone in the final pay period of the tax year

you sent your final FPS early and you did not pay anyone for one or more full tax months in the last tax year

If you’re late sending your final report

From 20 April you can send an FPS to correct your 2020 to 2021 tax year payroll data by giving the year-to-date figures.

‘Week 53’ payments

If you pay your employees weekly, fortnightly or every 4 weeks, you might need to make a ‘week 53’ payment in your final FPS of the year.

Your payroll software will work out ‘week 53’ payments for you.

In the ‘Tax week number’ field of your FPS, put:

‘53’ if you pay your employees weekly

‘54’ if you pay them fortnightly

‘56’ if you pay them every 4 weeks

HMRC will send a P800 form to any employees who owe tax following a ‘week 53’ payment.

If you make a mistake

If you find a mistake in your final FPS of the year, what you need to do depends on the type of mistake and when you find it.

| When | What to do

Wrong payments or deductions | By 19 April | Send an additional FPS with corrected year-to-date figures, and enter ‘0’ in ‘Pay in this period’

Wrong payments or deductions | After 19 April | Send an FPS showing the correct year-to-date amounts.

Wrong payment date | By 5 April | Send an additional FPS with the correct payment date - put ‘0’ in ‘Pay in this period’ and give the year-to-date figures

Update employee payroll records

For each employee working for you on 6 April, you’ll need to:

prepare a payroll record

identify the correct tax code to use in the new tax year

enter their tax code in your payroll software

You should include in your payroll:

all employees you pay in the tax year, no matter how much you pay them

any employee who has worked for you in the current tax year (since 6 April) even if they’ve already left

Using the right tax code

HM Revenue and Customs (HMRC) will send you a:

P9T form for any employees who need a new tax code

P9X form with general changes for employees whose tax code ends with an ‘L’

For April 2021, if your employee’s tax code ends in ‘L’, add 7, for example 1250L becomes 1257L.

If you get a lot of tax code notices, it may be faster to use HMRC’s PAYE Desktop Viewer.

New employees

Use the information new employees give you (usually their P45) to work out their tax code.

Update payroll software

Follow your provider’s instructions to update your payroll software so it uses the latest rates and thresholds for Income Tax, National Insurance and student loan repayments.

Basic PAYE Tools

You must download and install Basic PAYE Tools again if you’re using a version before 14.2.14330.88. The version number displays in the bottom-left corner of the tool.

Versions 14.2.14330.88 and later of Basic PAYE Tools check for updates automatically, for example when the tax year changes or new rules come in.

Give employees a P60

Give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). The P60 summarises their total pay and deductions for the year.

You must give your employees a P60 by 31 May.

If you’re exempt from filing your payroll online, you can order copies of P60s from HMRC.

If you need to change a P60

Give your employee either a:

new P60 marked ‘replacement’ - this can be paper or electronic

letter confirming the change

Report expenses and benefits

You can report expenses and benefits using your payroll software, if it has this feature.

You must report expenses and benefits to HMRC by 6 July.

Paying HMRC

Pay any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided. Your payment must be received by 22 July (or 19 July if you’re paying by post).


Running payroll

Overview

As an employer operating PAYE as part of your payroll, you need to complete certain tasks during each tax month. Tax months run from the 6th of one month to the 5th of the next.

You must tell HM Revenue and Customs (HMRC) if you’ve not paid any employees in a tax month.

On or before your employees’ payday

Every time you pay your employees, use your payroll software to:

Record their pay - include their salary or wages and any other pay.

Calculate deductions from their pay, like tax and National Insurance.

Calculate the employer’s National Insurance contribution that you’ll need to pay on their earnings above £184 a week.

Produce payslips for each employee (you can use different software if yours does not have this feature).

Report their pay and deductions to HMRC in a Full Payment Submission (FPS).

If you pay an employee less than £120 a week, you usually only need to record and report their pay (unless they have another job or receive a pension).

In the next tax month (starting on the 6th)

You can view what you owe from your FPS online from the 12th.

Claim any reduction on what you’ll owe HMRC (for example statutory pay) by sending an Employer Payment Summary (EPS) by the 19th.

View the balance of what you owe in your HMRC online account, within 2 days (or by the 14th if you sent the EPS before the 11th).

Pay HMRC by the 22nd (or the 19th if paying by post) - you may have to pay a penalty if you do not.

If you usually pay less than £1,500 per month, you may be able to pay quarterly instead of monthly. Contact the payment helpline to find out.

Late reporting

HMRC will send you a late filing notice if you’ve paid any employees and do not send an FPS or send one late. They can also charge you a penalty, unless you have a valid reason for reporting late.

Late, missing or incorrect payroll reports can also affect your employees’ income-related benefits, such as Universal Credit.

HMRC will close your PAYE scheme if you’re a new employer and you do not send a report to or pay HMRC in 120 days.

Employees' pay

Record your employees’ salary or wages in your payroll software. Include everyone you pay, even if they get less than £120 a week.

Recording other types of pay

Statutory pay

You may have to pay your employee:

Statutory Sick Pay (SSP)

statutory pay for parents (maternity, paternity, adoption, bereavement or shared parental pay)

You must record these in your software - they’re taxed like normal pay.

You can reclaim statutory pay for parents.

Expenses and benefits

Expenses or benefits like uniforms or company cars are reported separately at the end of the tax year. Check the rules to find out what counts as expenses and benefits, and what you should record in your software as normal pay.

Tips and other pay

Treat tips to your staff as normal pay if they’re paid into your till - this includes tips added to your customers’ card or cheque payments. The rules are different if tips are given straight to your employees by customers or paid into a tronc.

Other payments you may give your employee that you should record as normal pay include:

bonuses

commission

holiday pay (unless you pay it in advance or use a holiday pay scheme)

payments for time your employee has spent travelling

passenger payments, except the first 5 pence per mile

medical suspension payments, given to an employee you’ve suspended for health reasons

maternity suspension payments, given to an employee you’ve suspended for her, or her baby’s, health

guarantee payments, paid to an employee for a day they do not work (and not paid holiday)

office holders’ payments (honoraria), given to employees for providing a service, for example being your company’s sports-club secretary

payments that can be converted into cash, for example cheques, Savings Certificates or Premium Bonds

inducement payments (‘golden hello’ payments)

cash prizes for competitions you run

The rules are different for non-cash payments like shares or commodities, cash-in-hand or guarantee payments and employee incentive awards.

Deductions

Your payroll software will calculate how much tax and National Insurance to deduct from your employees’ pay. These deductions are worked out using each employee’s tax code and National Insurance category letter.

You may also need to deduct student loan repayments, pension contributions, Payroll Giving donations and child maintenance payments.

Student and Postgraduate loan repayments

Use your payroll software to record if your employee needs to make student loan repayments - both in your software and on payslips.

You’ll need to calculate and deduct how much they need to repay based on which plan they’re on. They repay:

9% of their income above £19,895 a year for Plan 1

9% of their income above £27,295 a year for Plan 2

9% of their income above £25,000 a year for Plan 4

6% of their income above £21,000 a year for Postgraduate loans

Pensions

Make pension deductions after you take off National Insurance. You normally make pension deductions before you take off tax - check with your workplace pension provider.

You’ll also need to pay any employer contributions into your employee’s pension.

A new law means all employers will have to provide and pay into a workplace pension scheme for their employees - this is called ‘automatic enrolment’.

Payroll Giving

Your employees can donate to charity directly from their pay before tax is deducted using Payroll Giving.

Register with a Payroll Giving agency to set up a scheme. They’ll let you know how to make deductions.

As well as the usual payroll records, you must also keep the agency contract, employee authorisation forms and details of payments to the agency.

Child maintenance

You may need to deduct child maintenance directly from a paying parent’s earnings or pension.

Payslips

You must give your employees and ‘workers’ a payslip on or before their payday.

What to include

Payslips must show:

pay before any deductions (‘gross’ wages)

deductions like tax and National Insurance

pay after deductions (‘net’ wages)

the number of hours worked, if the pay varies depending on time worked

Payslips can also include information like your employee’s National Insurance number and tax code, their rate of pay, and the total amount of pay and deductions so far in the tax year.

Producing payslips

You may be able to produce payslips using your payroll software, if it has this feature. You can use different software if it does not.

You can either print payslips to give to your employees, or you can send them electronically.

Employees have certain rights relating to payslips and what they must include.

Reporting to HMRC: FPS

Use your payroll software to send a Full Payment Submission (FPS) to tell HM Revenue and Customs (HMRC) about payments to your employees and what deductions you’ve made.

Include everyone you pay, even if they get less than £120 a week.

When to send your FPS

Send the FPS on or before your employees’ payday, even if you pay HMRC quarterly instead of monthly.

You must enter the usual date that you pay your employees, even if you pay them earlier or later. For example, if you pay your employees early because your usual payday falls on a Bank Holiday, you should still enter your regular payday.

Early reporting

You can send an FPS before your regular payday, for example if your payroll staff are going on holiday.

Do not report too early - you’ll need to send a corrected FPS to update HMRC if information changes, for example an employee leaves or changes tax code.

You cannot send reports for the new tax year before March.

Late reporting

There are some exceptions when you can send a late FPS.

Completing and sending an FPS

You’ll need to enter your PAYE reference and Accounts Office reference in your software. HMRC will have sent this to you after you registered as an employer.

To complete and send the FPS, follow your payroll software’s instructions.

HMRC has guidance on what to put in each field on an FPS, including:

employer information

employee information - only include employees you’ve paid

pay and deductions

National Insurance information

You can split your FPS into batches if it’s easier for you, for example one for employees and one for directors.

There are special rules for calculating deductions if your employee has more than one job with you.

After you’ve sent your FPS

In the next tax month (which starts on the 6th), you can:

view your FPS and how much tax and National Insurance you owe in your HMRC online account from the 12th

claim any reduction on what you’ll owe HMRC (for example statutory pay) by sending an Employer Payment Summary (EPS) by the 19th

pay HMRC the balance by the 22nd (or the 19th if paying by post)

If you need to make an extra payment to your employee, send an extra FPS before your next regular report (if your software has this feature).

If you made a mistake in your FPS

You should correct any errors in your FPS as soon as you find them.

Reporting extra information

You need to report more information on an FPS if:

it includes a new employee

an employee leaves

you start paying someone a workplace pension

it’s the last report of tax year

You may also need to report extra information about certain employee changes, for example they take a leave of absence or become a director.

There are special rules if you’re only reporting National Insurance, for example you’re an overseas employer that does not need to pay UK tax.

Reporting to HMRC: EPS

Use your payroll software to send an Employer Payment Summary (EPS) as well as a Full Payment Submission (FPS) if you:

reclaim statutory maternity, paternity, adoption, parental bereavement or shared parental payments - even if you got an advance payment from HM Revenue and Customs (HMRC) to cover them

claim the Employment Allowance - do this once each tax year

can reclaim Construction Industry Scheme (CIS) deductions as a limited company

claim National Insurance contributions holiday for previous tax years

pay the Apprenticeship Levy if you, or employers you’re connected to, have an annual pay bill of more than £3 million

Send an EPS instead of an FPS if you’ve not paid any employees in a tax month.

EPS deadlines

Send an EPS by the 19th of the following tax month for HMRC to apply any reduction (for example statutory pay) on what you’ll owe from your FPS.

The tax month starts on the 6th.

Sending an EPS

To complete and send the EPS, follow your payroll software’s instructions. HMRC has guidance on what to put in each field on an an EPS.

Use HMRC’s Basic PAYE Tools if your software cannot send EPS reports.

After you’ve sent your EPS

Once you’ve sent your EPS, you can:

view what you’ve claimed and the balance of what you owe on your HMRC online account within 2 days (or by the 14th if you sent the EPS before the 11th)

pay HMRC by the 22nd (or the 19th if paying by post).

If you made a mistake in your EPS

You should correct any errors in your EPS as soon as you find them.

If you do not pay any employees in a tax month

Do not send an FPS. Send an EPS by the 19th after the tax month you did not pay any employees. The tax month starts on the 6th.

HMRC has guidance on what to put in your EPS if you’ve not paid anyone.

If you do not send an EPS, HMRC may:

send you a notice through PAYE Online

estimate how much you should pay

give you a penalty

If you do not pay anyone for a longer period

You can tell HMRC up to a year in advance that you’ll not pay any employees. To do this, enter dates in the ‘Period of inactivity’ fields in your EPS.

Paying HMRC

Every month you have to pay HM Revenue and Customs (HMRC):

the tax and National Insurance (and any other deductions) you owe as reported on your Full Payment Submission (FPS) in the previous tax month

minus the reductions on any Employer Payment Summary (EPS) you sent before the 19th in the current tax month

Pay what you owe by the 22nd of the month (or the 19th if paying by post) - you may have to pay a penalty if you do not.

Viewing what you owe

View your HMRC online account to see the reports you’ve sent and to find out what you owe.

There are things you can check if your PAYE bill is not what you expected.

How to pay

You can pay your PAYE bill in a number of different ways.

Interest and penalties

HMRC will usually tell you if they think you’ve paid late - either in a letter or a notice through PAYE Online. You’ll be charged interest daily at the standard rate.

You may be charged a penalty if you do not pay on time or in full.

Sending an FPS after payday

If you send a late Full Payment Submission (FPS) without a valid reason, you may get:

an online penalty warning message for the first late FPS you send each month

a penalty for reporting late

When you can send a late FPS report

In certain situations you can send a Full Payment Submission (FPS) after you pay your employee.

Situation | When to report

Your employee does not give you a P45 and is either paid less than £120 a week or has worked with you for less than a week | Within 7 days of paying your employee

Your employees’ payday is on a non-banking day, for example weekend or bank holiday | On the next banking day - but enter the regular payment date in the ‘payment date’ field and select ‘Late reporting reason’ code G

You make an ad hoc payment outside of your regular payroll, for example you’re told after you’ve sent your FPS about a new starter or a missed overtime payment. (Payments made regularly outside your normal payroll run are not ad hoc) | In your next regular FPS or an additional FPS

You pay your employee an expense or benefit where you must pay National Insurance, but not Income Tax, through payroll. This depends on the benefit. | Within 14 days of the end of the tax month

You cannot calculate or report your employee’s pay in advance because it’s based on their work on the day, for example harvest workers paid based on how much they pick | Within 7 days of paying your employee

You make certain non-cash payments to your employee | As soon as possible within 14 days of the end of the tax month, or when you deduct tax and National Insurance (if earlier). For complex situations (for example when exercising share options) contact HMRC

You’ve not received your employer PAYE reference yet | As soon as possible after you receive your employer PAYE reference - select ‘Late reporting reason’ code G

Put the reason for reporting after payday on your FPS for each late submission. If you do not, or if HMRC disagrees with the reason or you do not send an FPS, they may send you an online penalty warning message and a penalty.

Viewing late FPS reports in your HMRC online account

If you send an FPS in the same tax month as you paid your employees, you can view the report in your HMRC online account from the 12th of the next tax month.

This is different if you send an FPS in the tax month after payday.

Late FPS sent (in tax month after payday) | HMRC online account updated

Between 6th and 11th | By the 14th

Between 12th and 19th | Within 2 days

On or after the 20th - and you did not send a FPS the previous tax month | Within 2 days

On or after the 20th - and you sent a FPS the previous tax month | By the 12th of the next tax month

Reporting employee changes

You need to report more information on a Full Payment Submission (FPS) if:

it includes a new employee

an employee leaves

you start paying someone a workplace pension

it’s the last report of the tax year

an employee changes their address

You may also need to tell HM Revenue and Customs (HMRC) if an employee:

becomes a director

reaches State Pension age

goes to work abroad

goes on jury service

dies

joins or leaves a contracted-out company pension

turns 16

is called up as a reservist

changes gender

Employee takes a leave of absence

Once your employee has started their leave of absence, put ‘Yes’ in the ‘Irregular payment pattern indicator’ in all FPS reports you send to HMRC until the employee returns.

Changing paydays

You can move your payday to a different day or change how often you pay your employees.

Moving your payday

If the new payday is in the same tax month or week, treat the first new payment as an extra payment for that period.

You do not need to do anything special when recording pay if the new payday is in a different tax month or week.

HM Revenue and Customs (HMRC) has guidance on how to calculate National Insurance for your employees after changing paydays.

Changing how often you pay your employees

You must contact the employer helpline if you pay employees less often so HMRC do not send you a non-filing notice through PAYE Online.

Most payroll software can automatically manage any changes to how often you pay your employees (for example from monthly to weekly) and work out deductions correctly.

Using Basic PAYE Tools

There are some limitations on when you can make these changes if you use HM Revenue and Customs’ (HMRC) Basic PAYE Tools.

Paying your employees more often

If you’ve not already paid your employees, use the new earnings period (in the ‘Pay frequency’ field) in your Full Payment Submission (FPS) when you next pay them.

If you’ve paid your employees, you can use the new earnings period from the next tax month.

Paying your employees less often

If a payment from your old pay period also takes place in your new pay period, calculate and deduct National Insurance on both. Do not deduct more National Insurance than would’ve been due on the combined total of both payments.

If an employee also joins your contracted-out pension scheme during this period, deduct National Insurance at the contracted-out rate on the total of both payments.

Deduct tax based on the new earnings period the next time you pay your employees.

Annual payroll scheme for PAYE

If you pay your employees only once a year, and all in the same tax month, you can register with HMRC as an ‘annual scheme’.

This means you send reports and make payments to HMRC annually. If you pay your employees on different days in the same tax month, you need to send an FPS on or before each payday. You do not need to send an Employer Payment Summary (EPS) for the months when you do not pay your employees.

To register, contact the employer helpline and tell them which month you pay your employees. You’ll need your 13-character Accounts Office reference number - this is on the letter HMRC sent you when you registered as an employer.

Changing when you pay your employees

If you change the month you pay your employees, send an FPS in the month that you want the new annual payment month to move to. If it’s later than the month you usually pay your employees, you’ll need to send an EPS for that month to tell HMRC you’re not paying anyone.

If you send more than one FPS in a year, HMRC will assume you no longer wish to operate as an annual scheme and send you a letter to confirm.


Tell HMRC about a new employee

Overview

You must tell HM Revenue and Customs (HMRC) when you take on a new employee and be registered as an employer.

Before you pay your new starter follow these steps.

Check you need to pay them through PAYE.

Get employee information to work out their tax code - if you do not have their P45, use HMRC’s ‘starter checklist’ (which replaced the P46).

Find out if they need to repay a student loan.

Use these details to set up your new employee in your payroll software.

Register your employee with HMRC using a Full Payment Submission (FPS).

You must also follow the same steps as when you start employing staff for the first time, for example checking they can work in the UK.

Check you need to pay someone through PAYE

You usually have to pay your employees through PAYE if they earn £120 or more a week (£520 a month or £6,240 a year).

You do not need to pay self-employed workers through PAYE.

Working out if someone is an employee or self-employed

As a general rule, someone is:

employed if they work for you and do not have any of the risks associated with running a business

self-employed if they run their own business and are responsible for its success or failure

You must check each worker’s employment status to make sure they’re not self-employed. If you get it wrong you may have to pay extra tax, National Insurance, interest and a penalty.

Temporary or agency workers

You need to operate PAYE on temporary workers that you pay directly, as long as they’re classed as an employee.

You do not need to operate PAYE if a worker is paid by an agency, unless the agency’s based abroad and does not have a trading address or representative in the UK.

There are special rules for harvest workers or shoot beaters employed for less than 2 weeks.

Employees you only pay once

You operate PAYE differently for employees you only pay once.

Set up a payroll record with their full name and address. If you give them a payroll ID, make sure it’s unique.

When you send your Full Payment Submission (FPS):

use tax code ‘0T’ on a ‘Week 1’ or ‘Month 1’ basis

put ‘IO’ in the ‘Pay frequency’ field

do not put a start or leaving date

Give your employee a statement showing their pay before and after deductions, and the payment date, for example a payslip or a letter. Do not give them a P45.

Volunteers

You do not need to operate PAYE on volunteers if they only get expenses that are not subject to tax or National Insurance - check if their expenses are affected.

Students

Operate PAYE on students in the same way as you do for other employees.

Get employee information

You need to get certain information from your employee so you can set them up with the correct tax code and starter declaration on your payroll software.

You’ll usually get most of this information from the employee’s P45, but they’ll have to fill in a ‘starter checklist’ (which replaced the P46 form) if they do not have a recent P45.

You’ll need your employee’s:

date of birth

gender

full address

start date

From your employee’s P45, you’ll need their:

full name

leaving date from their last job

total pay and tax paid to date for the current tax year

student loan deduction status

National Insurance number

existing tax code

You must keep this information in your payroll records for the current year and the 3 following tax years.

If your employee does not have a P45

Ask your employee for this information if you do not have their P45, or if they left their last job before 6 April 2020.

The P46 form is no longer used.

Get the information by asking your new employee to complete HMRC’s new starter checklist.

If your employee has more than one P45

You should use the P45 with the latest date and give the other one back to the employee.

If they have the same leaving date use the P45 with the highest tax free allowance (or least additional pay for a K code) and give the other one back to the employee.

Work out your employee’s tax code

When you’ve got your employee’s information you can use a tool to:

work out their tax code and starter declaration

find out what else to do before you pay your employee for the first time

Work out your employee’s tax code

Employees you only pay once and secondments from abroad

There’s a different way to work out tax codes for employees who you only pay once or who are seconded from abroad.

Student loan repayments

You should make student loan deductions if any of the following apply:

your new employee’s P45 shows that deductions should continue

your new employee tells you they’re repaying a student loan or a postgraduate loan, for example on a starter checklist

HM Revenue and Customs (HMRC) sends you form SL1 or form PGL1 and your employee earns over the income threshold for their loan

What you need to do

You should follow these steps even if your employee has a P45 from their last job.

Ask your new employee if they have a student loan or a postgraduate loan - they may have both. If they finished their studies after 6 April in the current tax year, they will not start to repay their loan until the next tax year.

Record their answer in your payroll software. You do not need to calculate their loan recovery repayments - your payroll software will do this for you.

If your employee has a student loan, ask them to sign in to their repayment account and check which plan to use for deductions. They can contact the Student Loans Company if they’re still not sure.

If they cannot tell you, use Plan 1 in your payroll software until you get a student loan start notice (SL1).

Where the employee is on more than one plan, start deductions for the plan with the lowest recovery threshold until you get an SL1. Check the student loan recovery thresholds.

Report these deductions to HMRC when you pay your employee.

Special rules

In some cases there are special rules for making student loan deductions. Examples include:

you’re sent a court order to collect a debt directly from your employee’s earnings

you change how often you pay your employee, such as from weekly to monthly

the employee has more than one job with you and you need to aggregate earnings

Stopping deductions

HMRC will tell you if you need to stop making loan deductions from your employees’ pay. They’ll send you:

form SL2 for student loans

form PGL2 for postgraduate loans

Do not stop making deductions if an employee asks you to.

Registering your new employee

Register your new employee with HM Revenue and Customs (HMRC) by including their details on a Full Payment Submission (FPS) the first time you pay them.

On this FPS, include:

information you’ve collected from them

the tax code and starter declaration that you’ve worked out

pay and deductions (for example tax, National Insurance and student loan deductions) since they started working for you - do not include figures from their previous job

Giving your employee a payroll ID

You can assign payroll IDs to your employees. The ID must be unique - so use a different one if:

you re-employ someone - if you do this within the same tax year restart their year-to-date information from ‘£0.00’

an employee has more than one job in the same PAYE scheme

If you re-use a previous payroll ID, you’ll create a duplicate record and report payroll incorrectly.

Special rules

There are special rules for making deductions for:

female employees entitled to reduced National Insurance

employees you only pay once

harvest workers and casual beaters

certain employees with more than one job

Late P45 or starter checklist

You may need to update your payroll records if your employee gives you a P45 or starter checklist after you’ve registered them with HM Revenue and Customs (HMRC).

You only need a starter checklist from your employee to work out their tax code if they do not have a P45, or if they left their last job before 6 April 2020.

If HMRC has sent you a tax code

Use the tax code that HMRC has sent you if your employee gives you a P45 or starter checklist after you’ve first paid them. Deduct any student loan repayments from the date your employee started with you.

If HMRC has not sent you a code

Late P45

Use your employee’s P45 to work out their tax code and update their details in your payroll software.

If your employee left their last job after 5 April 2021, you should also update both the ‘Total pay to date’ and ‘Total tax to date’ fields in your payroll software for the first week you included this information. If your software finds errors, update the fields with the correct figures.

Late starter checklist

Use your employee’s starter checklist to update the starter declaration in your payroll records.

Keep using the tax code you used in your first Full Payment Submission (FPS) until HMRC sends you a new one.

When you next pay your employee

Do not enter another start date on the FPS, even if you have not reported a start date before.


Understanding your employees' tax codes

Overview

You put an employee’s tax code into your payroll software to work out how much tax to deduct from their pay throughout the year.

This guide is also available in Welsh (Cymraeg).

There’s a separate guide on tax codes if you’re an employee.

What you need to do

When you take on a new employee, you normally work out their tax code by using their P45. The code will usually be made up of several numbers and a letter, such as 1257L.

You usually need to update your employee’s tax code at the start of a new tax year. If the tax code changes during the year, HM Revenue and Customs (HMRC) will email you - you should update your payroll records as soon as possible.

Tax code 1257L

The most common tax code for tax year 2021 to 2022 is 1257L. It’s used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car).

1257L is an emergency tax code only if followed by ‘W1’, ‘M1’ or ‘X’. Emergency codes can be used if a new employee doesn’t have a P45.

What the numbers mean

The numbers in an employee’s tax code show how much tax-free income they get in that tax year.

You usually multiply the number in the tax code by 10 to get the total amount of income they can earn before being taxed.

For example, an employee with the tax code 1257L can earn £12,570 before being taxed. If they earn £27,000 per year, their taxable income is £14,430.

The process is different if the employee has the letter ‘K’ in their tax code.

What the letters mean

Letters in an employee’s tax code refer to their situation and how it affects their Personal Allowance.

Code | How tax is deducted | When this code is usually used

0T | From all income - there is no Personal Allowance | When an employee hasn’t given you a P45 or enough details to work out their tax code, or when their Personal Allowance has been used up

BR | From all income at the basic rate | For a second job or pension

C | From income in the Welsh tax bands | For an employee whose main home is in Wales

C0T | From all income - there is no Personal Allowance | When an employee whose main home is in Wales hasn’t given you a P45 or enough details to work out their tax code, or when their Personal Allowance has been used up

CBR | From all income at the basic rate in Wales | For a second job or pension

CD0 | From all income at the higher rate in Wales | For a second job or pension

CD1 | From all income at the additional rate in Wales | For a second job or pension

D0 | From all income at the higher rate | For a second job or pension

D1 | From all income at the additional rate | For a second job or pension

L | At basic, higher and additional rates depending on the amount of taxable income | For an employee entitled to the standard tax-free Personal Allowance

M | At basic, higher and additional rates depending on the amount of taxable income | For an employee whose spouse or civil partner has transferred some of their Personal Allowance

N | At basic, higher and additional rates depending on the amount of taxable income | For an employee who has transferred some of their Personal Allowance to their spouse or civil partner

NT | No tax is deducted | Very specific cases, for example musicians who are regarded as self-employed and not subject to PAYE

S | From income in the Scottish tax bands | For an employee whose main home is in Scotland

S0T | From all income - there is no Personal Allowance | When an employee whose main home is in Scotland hasn’t given you a P45 or enough details to work out their tax code, or when their Personal Allowance has been used up

SBR | From all income at the basic rate in Scotland | For a second job or pension

SD0 | From all income at the intermediate rate in Scotland | For a second job or pension

SD1 | From all income at the higher rate in Scotland | For a second job or pension

SD2 | From all income at the top rate in Scotland | For a second job or pension

T | At basic, higher and additional rates depending on the amount of taxable income | When HMRC needs to review some items with the employee

If your employee’s tax code has ‘W1’ or ‘M1’ at the end

W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

Tax codes with the letter ‘K’

The letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their Personal Allowance.

Multiply the number in their tax code by 10 to show how much should be added to their taxable income before deductions are calculated.

The tax deduction for each pay period can’t be more than half an employee’s pre-tax pay or pension.

Changes during the tax year

Usually someone’s tax code changes if their tax-free income (Personal Allowance) goes up or down, for example they start or stop receiving a taxable benefit like a company car.

HM Revenue and Customs (HMRC) will send you an email alert if one of your employees’ tax codes changes.

Access the new tax code in PAYE Online (in ‘tax code notices’), the PAYE Desktop Viewer application, or in your payroll software (if it has this feature). Check if your employee’s previous pay and tax are included with the new tax code. If they are, note these figures.

As soon as possible, and before you next pay your employee, update their payroll record with their new tax code. Add their previous pay and tax, if you received these figures with the new tax code.

A tax code notice is sometimes called a P6 form.

If you receive an employee’s new tax code too late to use in the tax year, you should use it in the new tax year.

Updating for the new tax year

HM Revenue and Customs (HMRC) will tell you between January and March about any new tax codes to use for employees in the new tax year. This starts on 6 April.

If an employee’s tax code isn’t changing, HMRC won’t contact you and you should carry forward the employee’s tax code to the new tax year.

If your employee’s tax code ends with ‘M1’ or ‘W1’ (‘month 1’ or ‘week 1’), don’t carry this part of the code into the new tax year.


What to do when an employee dies

Reporting a workplace death

You must report a death in the workplace (except in Northern Ireland) to the:

police

Health and Safety Executive (HSE)

Report a workplace death in Northern Ireland to the Health and Safety Executive for Northern Ireland (HSENI).

You must report any deaths or serious injuries, even if the employee is working off-site at the time.

Paying an employee who has died

You must make all outstanding payments when an employee dies.

Put the date they died into the ‘Date of leaving’ field in your next Full Payment Submission (FPS), and deduct tax using their existing tax code. Use category letter X so that you do not deduct National Insurance. Do not produce a P45.

Payments to a person who has died are usually made to the personal representative or executor of that person’s estate.

If you make a mistake

If an employee dies and you did not report it in the right FPS, follow the guidance for when an employee leaves.

Making a late payment

If you need to pay someone after you’ve sent an FPS with their ‘Date of leaving’ (the date they died):

include their ‘Date of leaving’ and put ‘Yes’ in the ‘Payment after leaving indicator’ field in your FPS

choose ‘H - Correction to an earlier submission’ in the ‘Late payment reason’ field

update the year-to-date figures - or if it’s a new tax year, make sure the year-to-date figures only include the additional payment

Paying a pensioner who has died

You must make all outstanding payments when someone receiving your company pension dies.

Put the date they died in the ‘Date of leaving’ field in your next Full Payment Submission (FPS), and work out their final pension payment.

Working out tax

Use their existing tax code unless it’s a new tax year by the time you pay them.

If it’s a new tax year and you have not reported their ‘Date of leaving’ (the date they died) on an FPS yet, use their new tax code. Otherwise, use tax code 0T on a ‘week 1’ or ‘month 1’ basis and put ‘Yes’ in the ‘Payment after leaving indicator’ field in your FPS.

If you pay someone after their death

If you’ve made a pension payment to someone after they died (for example because you were told about their death late), you should get the overpayment back from their executor.

Put the pensioner’s ‘Date of leaving’ (the date they died) on your next FPS, and choose ‘H - Correction to an earlier submission’ in the ‘Late reporting reason’ field.

If you do not know the date they died, put the date of their final pension payment as their ‘Date of leaving’.

Amend the year-to-date figures if you get the overpayment back.

If it’s a new tax year by the time you find out a pensioner has died:

put ‘0.00’ in the year-to-date figures for pay and tax in your FPS

send either an Earlier Year Update (EYU) or an FPS with the correct year to date figures for the previous year


Set up and manage a workplace pension scheme

Employers and eligible staff

Employers have to provide a workplace pension scheme for eligible staff as soon as your first member of staff starts working for you (known as your ‘duties start date’).

Check you’re an employer

You’re usually an employer if you deduct tax and National Insurance contributions from an employee’s wages.

Check you’re an employer if you’re not sure what your pension responsibilities are, for example you employ a carer or someone to work in your home.

Who you must enrol

You must enrol and make an employer’s contribution for all staff who:

are aged between 22 and the State Pension age

earn at least £10,000 a year

normally work in the UK (this includes people who are based in the UK but travel abroad for work)

If staff become eligible because of a change in their age or earnings, you must put them into your pension scheme and write to them within 6 weeks of the day they meet the criteria.

If you’re not sure what the state pension age is you can use the State Pension age calculator to find out.

You do not have to enrol an employee if they give you proof of their lifetime allowance protection.

How to set up a workplace pension scheme

You must set up a workplace pension scheme for eligible staff if you do not already offer one.

Use The Pensions Regulator’s tool for employers to find out what you need to do and when you need to do it.

If you already have a workplace pension scheme that you’d like to use for automatic enrolment, you must ask the provider if it meets the rules.

How much you must pay

You must pay at least 3% of your employee’s ‘qualifying earnings’ into your staff’s pension scheme.

Check the pension scheme you’re using to find out what counts as ‘qualifying earnings’.

Under most schemes, it’s the employee’s total earnings between £6,240 and £50,270 a year before tax. Total earnings include:

salary or wages

bonuses and commission

overtime

statutory sick pay

statutory maternity, paternity or adoption pay

Paying contributions

You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff’s pension scheme by the 22nd day (19th if you pay by cheque) of the next month.

You must pay your contributions for each employee by the date you’ve agreed with your provider every time you run payroll. You must backdate any missed payments.

You may be fined if you pay late or do not pay the minimum contribution for each member of staff.

Manage your workplace pension scheme

When you’ve set up a workplace pension scheme, you must:

check if and when staff should be re-enrolled

manage requests to join and leave your pension scheme

keep records about how you’ve met your legal duties

check if existing staff should be added to your pension scheme, for example when they earn a certain amount

Re-enrolment and re-declaration

Every 3 years after your first member of staff starts working for you, you must re-enrol staff into your pension scheme if they:

left your pension scheme more than 12 months before your re-enrolment date

are still in your pension scheme but pay below the minimum contributions level

If staff left your pension scheme 12 months or less before your next re-enrolment date, you can choose to re-enrol them on that date or wait until the next re-enrolment date in three years, if they’re still eligible.

You must write to eligible staff within 6 weeks after your re-enrolment date to tell them you have put them back into your pension scheme.

Use The Pensions Regulator’s tool to find out your dates for re-enrolment.

You must complete a re-declaration of compliance every time you carry out your re-enrolment duties, even if staff were not re-enrolled.

If you do not complete the re-declaration on time you could be fined.

Requests to join or leave your pension scheme

All staff can request to join your pension scheme if they want to. You must check they are eligible and put them into the scheme within 1 month of getting their request.

Staff can leave your pension scheme whenever they want. You must take them out of the scheme within one month of getting their request.

If staff ask to leave your pension scheme within 1 month of joining (known as the ‘opt-out window’), you will have to refund their contributions within 1 month. If they ask to leave after the opt-out window, their contributions will be kept in their pension until they retire.

Keep records

You must keep records of how you’ve met your legal duties for maintaining your pension scheme, including:

the names and addresses of staff enrolled

when contributions are paid in

all requests to join or leave your pension scheme

your pension scheme reference or registry number (PSR)

You must keep these records for 6 years except for requests to leave your pension scheme which must be kept for 4 years. You must also keep track of the ages and earnings of staff so you can enrol them when they become eligible.


Check someone's criminal record as an employer

Checks you can make on someone's record

Employers can check the criminal record of someone applying for a role. This is known as getting a Disclosure and Barring Service (DBS) check.

You can request a more detailed check for certain roles, for example in healthcare or childcare.

There are different rules for getting a criminal record check in Scotland and Northern Ireland.

Types of check

You can request:

a basic check, which shows unspent convictions and conditional cautions

a standard check, which shows spent and unspent convictions, cautions, reprimands and final warnings

an enhanced check, which shows the same as a standard check plus any information held by local police that’s considered relevant to the role

an enhanced check with barred lists, which shows the same as an enhanced check plus whether the applicant is on the list of people barred from doing the role

If you carry out criminal records checks, you must have a policy on employing ex-offenders and show it to any applicant who asks for it.

Checking your own criminal record

You can only request a basic check for yourself.

If you’re self-employed, an organisation you’re working with can get a standard, enhanced or enhanced with barred lists check for you, where the role is eligible.

Childminders can get a check through Ofsted.

When to repeat a check

A DBS check has no official expiry date. Any information included will be accurate at the time the check was carried out. It’s up to you to decide when a new check is needed.

If the applicant has signed up for the DBS update service you can check whether their certificate is up to date online.

Certificates for previous roles

You can accept a certificate that was requested for a previous role but you must:

check the applicant’s identity matches the details on the certificate

check the certificate is the right level and type for the role applied for

check to see if anything has changed if the applicant is signed up for the update service

Checks on someone who lived abroad

DBS checks will not cover the time someone lived outside the UK.

Check the rules in the country they lived in.

Contact DBS

Contact DBS if you’re not sure whether you can request a check.

Get a basic DBS check for an employee

You can request a Disclosure and Barring Service (DBS) check on behalf of an employee.

There’s a different process to request your own basic DBS check.

How to do a check

You’ll need to choose a company from the list of ‘responsible organisations’ registered with DBS to process checks. They will carry out the check and tell you the outcome once it’s complete.

The applicant will receive their certificate by post. They can also set up a DBS online account to view the certificate online.

How much it costs

A basic check costs £23. The responsible organisation may also charge an administration fee.

If you do more than 1,000 basic checks each year, you can become a responsible organisation. Contact DBS to find out what’s involved.

How long it takes

A basic check takes up to 14 days.

If you’re registered with DBS you can use the tracking service to track multiple applications.

Get a standard or enhanced DBS check for an employee

How you request a standard or enhanced check depends on how many checks you do a year.

If you do:

fewer than 100 checks a year you must use a company known as an ‘umbrella body’

100 or more checks a year you can choose to register with DBS or use an umbrella body

How to do a check

Ask DBS or your umbrella body for an application form.

Give the form to the applicant to fill in.

The applicant will return the completed form to you along with documents proving their identity.

Send the completed application form to DBS or your umbrella body.

DBS will send a certificate to the applicant. You must ask the applicant to show you the certificate so you can check it’s genuine.

How much it costs

How much it costs depends on the type of check.

Type of check | Cost

Standard | £23

Enhanced | £40

Enhanced with barred lists | £40

Checks are free for volunteers.

How long it takes

It usually takes around 8 weeks but it can take longer if:

the details given for the check are incorrect

several police forces need to be involved in the check

You cannot pay more to get a faster check.

Checks on carers

If you provide care services for adults (for example in a care home), you can use a service called DBS Adult First.

This will confirm, usually within 2 days, if the applicant:

can start work, as long as they’re supervised

should wait for the results of an enhanced check

The service costs an extra £6.


Jobcentre Plus help for recruiters

Overview

Jobcentre Plus has a range of recruitment services that can help you as an employer. You could get:

recruitment advice, including specialist support for businesses

help setting up work trials to give you the opportunity to try out potential recruits

advice about offering work experience and apprenticeships

support from other employment schemes including sector-based training and recruitment, and business mentoring

support if you employ someone with a disability (Access to Work)

advice and guidance on employing someone with a disability or health condition

You can also advertise a job with the ‘Find a job’ service (previously Universal Jobmatch).

This guide is also available in Welsh (Cymraeg).

Recruitment advice and support

Contact the Employer Services Line for advice about recruiting for your business.

It can put you in touch with local ‘employer advisors’ if you need specific and practical advice. Employer advisors understand the local labour market and can help you:

design and word job vacancies

develop pre-employment training (specific to a job)

recruit in new and fair ways (such as offering flexible working patterns)

access Jobcentre Plus office facilities for recruitment (where available)

give your existing employees the chance to mentor people who want to work

get advice and support if you need to make redundancies

The Employer Services Line can also give general advice about recruitment.

Work trials

A work trial is a short period in work you can offer to a jobseeker on benefits. It’s a way for you both to see if the job is a good fit.

It happens after you’ve interviewed them for a specific role. If they’re not suitable for it, you do not need to offer it to them.

Jobseekers volunteer for a work trial. They keep getting their benefits whilst they’re on it and are not paid a wage.

Eligibility

The work trial must:

only be used as a way for you and the potential employee to decide if they’re right for the role

be for a job where the jobseeker is the only person you’re considering hiring

be for a job which is at least 16 hours a week for at least 13 weeks

You need to agree the length of the work trial with the jobseeker before it starts. It must:

end when you’re sure about whether the jobseeker is suitable for the role

last no more than 5 days if the job is for less than 6 months

last no more than 30 days (and usually around 5 days) for jobs lasting 6 months or more

The work trial can be longer than 30 days if the jobseeker needs more time to adjust to being back at work. This needs to be agreed before the work trial starts.

Jobcentre Plus will check that the employee has volunteered for the trial and that it meets the eligibility criteria.

How to carry out a work trial

You need to agree a work trial with Jobcentre Plus before you offer it to a jobseeker.

Call the Employer Services Line to find out more.

Work experience and apprenticeships

Work experience

Work experience is available to:

all 18 to 24 year olds

people aged 25 and over who do not have any recent work history

If you offer a young person work experience you’ll be helping to give them a better chance of finding work.

Read the work experience guidance for employers to find out what’s expected of you.

Call the Employer Services Line if you want help to become a work experience host.

Apprenticeships

These are organised through the National Apprenticeship Service and often follow a period of work experience. They combine practical training with study.

If you take on an apprentice, you can get funding to train them. You might also be able to get an apprenticeship grant if you run a small or medium-sized business.

Apprenticeships are different in Scotland, Wales and Northern Ireland.

Other employment schemes

Jobcentre Plus employment schemes can help you to recruit people as well as creating opportunities for people looking for work.

New Enterprise Allowance

This provides Jobcentre Plus claimants with mentoring and financial support to help start their own business. You can contact the provider in your area if you want to become a mentor.

Sector-based work academy programme

The sector-based work academy programme provides training, work experience and a guaranteed job interview. It can help you fill your vacancies more effectively.

The sector-based work academy programme is only available in England and Scotland.


The National Minimum Wage and Living Wage

Overview

The minimum wage a worker should get depends on their age and if they’re an apprentice.

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 23.

It does not matter how small an employer is, they still have to pay the correct minimum wage.

Calculate the minimum wage

Use the minimum wage calculators to check if the correct minimum wage has been paid.

There are separate calculators for workers and employers.

Use the calculator for workers to check if you’re getting the correct minimum wage or if an employer owes you payment from the previous year.

Use the calculator for employers to check if you’re paying the correct minimum wage or if you owe a payment from the previous year.

There is also guidance on working out the minimum wage for different types of work.

Call the Acas helpline or visit the Acas Helpline Online for advice about the National Minimum Wage or National Living Wage.

Who gets the minimum wage

People classed as ‘workers’ must be at least school leaving age to get the National Minimum Wage. They must be 23 or over to get the National Living Wage.

Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.

Workers are also entitled to the correct minimum wage if they’re:

part-time

casual labourers, for example someone hired for one day

agency workers

workers and homeworkers paid by the number of items they make

apprentices

trainees, workers on probation

disabled workers

agricultural workers

foreign workers

seafarers

offshore workers

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

under 19

19 or over and in the first year of their apprenticeship

Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.

Not entitled to the minimum wage

The following types of workers are not entitled to the National Minimum Wage or National Living Wage:

self-employed people running their own business

company directors

people who are volunteers or voluntary workers

workers on a government employment programme, such as the Work Programme

members of the armed forces

family members of the employer living in the employer’s home

non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, for example au pairs

workers younger than school leaving age (usually 16)

higher and further education students on work experience or a work placement up to one year

people shadowing others at work

workers on government pre-apprenticeships schemes

people on the following European Union (EU) programmes: Leonardo da Vinci, Erasmus+, Comenius

people working on a Jobcentre Plus Work trial for up to 6 weeks

share fishermen

prisoners

people living and working in a religious community

Employers who offer internships (sometimes called ‘work placements’ or ‘work experience’) should check if the person is entitled to the minimum wage.

Voluntary work

You’re classed as doing voluntary work if you can only get certain limited benefits (for example reasonable travel or lunch expenses) and you’re working for a:

charity

voluntary organisation or associated fundraising body

statutory body

Contact the Acas helpline to find out if you should be getting the minimum wage.

Employers and the minimum wage

Employers must pay workers the correct minimum wage.

You can read guidance on the minimum wage rates and who they apply to.

What’s not included in minimum wage calculations

Some payments must not be included when the minimum wage is calculated.

These are:

payments that should not be included for the employer’s own use or benefit, for example if the employer has paid for travel to work

things the worker bought for the job and is not refunded for, such as tools, uniform, safety equipment

tips, service charges and cover charges

extra pay for working unsocial hours on a shift

Find out what counts as working time.

What’s included in minimum wage calculations

Some payments must be included when the minimum wage is calculated.

These are:

Income Tax and National Insurance contributions

wage advances or loans

repayment of wage advances or loans

repayment of overpaid wages

things the worker paid for that are not needed for the job or paid for voluntarily, such as meals

accommodation provided by an employer above the offset rate (£8.36 a day or £58.52 a week)

penalty charges for a worker’s misconduct

Read the detailed guidance on calculating the minimum wage for more on what counts and does not count towards the minimum wage, eligibility, how to calculate the minimum wage and how it is enforced.

Employer checks

It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.

Employers who discover they’ve paid a worker below the correct minimum wage must pay any arrears immediately. Use the National Minimum Wage and National Living Wage calculator to check a worker has been paid correctly.

HM Revenue and Customs (HMRC) officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them.

If HMRC finds that an employer has not been paying the correct rates, any arrears have to be paid back immediately. There will also be a fine and offenders might be named by the government.

Keeping records

It’s the employer’s responsibility to keep records proving that they are paying the minimum wage. These records must be kept for at least 6 years if they:

were created on or after 1 April 2021

still had to be kept on 31 March 2021 under the previous rule that records must be kept for 3 years

The period records must be kept for starts from the last day of the pay reference period after the one they cover.

They do not have to be kept in any particular form, for example they can be paper or computer records. But employers must be able to produce records for an individual pay reference period in a single document.

Most employers use their payroll records as proof of:

total pay - including pay deductions, allowances and tips

total hours worked - including absences and overtime

Employers may also need to keep records such as:

agreements about working hours, pay and conditions, such as contracts

documents that show why a worker is not entitled to the minimum wage

Pay reference periods

Pay reference periods are usually set by how often someone is paid, for example one week, one month or 10 days. A pay reference period cannot be longer than 31 days.

A worker must be paid the minimum wage, on average, for the time worked in the pay reference period.

Worker disputes over minimum wage

Workers who think their pay is below the correct minimum wage rate should talk to their employer first.

If this does not solve the problem, they can ask the employer in writing to see their payment records. The worker can take someone with them and make copies of the records.

If an employer owes the worker any arrears they have to pay these back.

Workers can call the confidential Acas helpline or look at the Acas Helpline Online to help them solve a payment dispute.

Workers can also make a complaint to HM Revenue and Customs (HMRC) about their employer or employment agency or complain on behalf of someone else.

If the employer refuses payment

If HMRC find that the employer has not paid they will send them a notice for the arrears plus a fine for not paying the minimum wage.

HMRC can take them to court on behalf of the worker if the employer still refuses to pay.

Employment tribunal

Workers can also go directly to the employment tribunal themselves.

Workers who have been dismissed because of a minimum wage dispute can also complain to the employment tribunal for unfair dismissal.


Shared Parental Leave and Pay: employer guide

Overview

Employees may be able to get Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) if they’ve had a baby or adopted a child.

Employees can start SPL if they’re eligible and they or their partner end their maternity or adoption leave or pay early. The remaining leave will be available as SPL. The remaining pay may be available as ShPP.

Employees can take SPL in up to 3 separate blocks. They can also share the leave with their partner if they’re also eligible. Parents can choose how much of the SPL each of them will take.

SPL and ShPP must be taken between the baby’s birth and first birthday (or within 1 year of adoption).

SPL and ShPP are only available in England, Scotland and Wales.

Eligibility

Sometimes only one parent in a couple will be eligible to get Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP). This means that they cannot share the leave.

If your employee is eligible then they can use SPL to book their leave in separate blocks.

Shared Parental Leave

To qualify for SPL, your employee must share responsibility for the child with one of the following:

their husband, wife, civil partner or joint adopter

the child’s other parent

their partner (if they live with them)

Your employee or their partner must be eligible for maternity pay or leave, adoption pay or leave or Maternity Allowance.

They must also:

still be employed by you while they take SPL

give you the correct notice including a declaration that their partner meets the employment and income requirements which allow your employee to get SPL

have been continuously employed by you for at least 26 weeks up to any day of the ‘qualifying week’, or the week they are matched with a child for adoption in the UK

The ‘qualifying week’ is the 15th week before the baby is due.

Statutory Shared Parental Pay

They can get ShPP if they’re an employee and one of the following applies:

they’re eligible for Statutory Maternity Pay (SMP) or Statutory Adoption Pay (SAP)

they’re eligible for Statutory Paternity Pay (SPP) and their partner is eligible for SMP, Maternity Allowance (MA) or SAP

They can also get ShPP if they’re a worker and they’re eligible for SMP or SPP.

Refusing SPL or ShPP

You can refuse SPL or ShPP if the employee does not qualify.

You must tell the employee the reason if you refuse ShPP. You do not have to give a reason for refusing SPL.

Entitlement

If an employee is eligible and they or their partner end maternity or adoption leave and pay (or Maternity Allowance) early, then they can:

take the rest of the 52 weeks of leave (up to a maximum of 50 weeks) as Shared Parental Leave (SPL)

take the rest of the 39 weeks of pay (up to a maximum of 37 weeks) as Statutory Shared Parental Pay (ShPP)

A mother must take a minimum of 2 weeks’ maternity leave following the birth (4 if she works in a factory).

ShPP is paid at the rate of £151.97 a week or 90% of an employee’s average weekly earnings, whichever is lower.

Starting Shared Parental Leave

For Shared Parental Leave (SPL) to start, the mother or adopter must do one of the following:

end their maternity or adoption leave by returning to work

give you ‘binding notice’ (a decision that cannot normally be changed) of the date when they’ll end their maternity or adoption leave

end maternity pay or Maternity Allowance (if they’re not entitled to maternity leave, for example they’re an agency worker or self-employed)

The adoptive parent getting Statutory Adoption Pay must take at least 2 weeks’ adoption leave. They can take it from the day of the placement, or up to 14 days before the placement starts.

The mother must give you notice (at least 8 weeks) to end her maternity pay, or tell Jobcentre Plus to end her Maternity Allowance. Adopters must give you notice to end adoption pay.

SPL can start for the partner while the mother or adopter is still on maternity or adoption leave if she’s given binding notice to end her leave (or pay if she’s not entitled to leave).

What the employee must do

The employee must give you written notice if they want to start SPL or Statutory Shared Parental Pay (ShPP). They can do this using forms created by the Advisory, Conciliation and Arbitration Service (Acas).

After receiving this notice, you can ask for:

a copy of the child’s birth certificate

the name and address of their partner’s employer

You have 14 days to ask for this information. Your employee then has a further 14 days to provide it.

Notice period

An employee must give at least 8 weeks’ notice of any leave they wish to take. If the child is born more than 8 weeks early, this notice period can be shorter.

Your employee has a statutory right to a maximum of 3 separate blocks of leave, although you can allow more if you wish.

Cancelling the decision to end maternity or adoption leave

The mother or adopter may be able to change their decision to end maternity or adoption leave early if both:

the planned end date has not passed

they have not already returned to work

One of the following must also apply:

it’s discovered during the 8-week notice period that neither partner is eligible for either SPL or ShPP

the employee’s partner has died

it’s less than 6 weeks after the birth (and the mother gave notice before the birth)

Shared parental leave in touch (SPLIT) days

Your employee can work up to 20 days during SPL without bringing it to an end. These are called ‘shared parental leave in touch’ (or SPLIT) days.

These days are in addition to the 10 ‘keeping in touch’ (or KIT) days already available to those on maternity or adoption leave.

Keeping in touch days are optional - both you and your employee must agree to them.

Blocks of leave

An employee taking Shared Parental Leave (SPL) can split their leave into up to 3 separate blocks instead of taking it all in one go, even if they are not sharing the leave with their partner.

If both parents are taking SPL then they can take their leave at the same time as each other or at different times.

The employee must give you at least 8 weeks’ notice before a block of leave begins.

Splitting blocks

If you agree, the employee can split a block of leave into shorter periods of at least a week. For example they could work every other week during a 12-week block, using a total of 6 weeks of their SPL.

You cannot turn down a request for a block of leave if the employee is eligible and gives you the right notice. You do not have to agree to the employee breaking the block of leave into shorter periods.

Record keeping

You must keep records for HM Revenue and Customs (HMRC), including:

the evidence provided by the employee to show that they’re eligible for ShPP

the date ShPP began

your ShPP payments (including dates)

the ShPP you’ve reclaimed

any weeks you did not pay and why

You must keep records for at least 3 years from the end of the tax year they relate to.

Help with statutory pay

For financial help with statutory pay, you can:

reclaim payments (usually 92%)

apply for an advance if you cannot afford payments


Statutory Adoption Pay and Leave: employer guide

Entitlement

When an employee takes time off to adopt a child or have a child through a surrogacy arrangement they might be eligible for Statutory Adoption Pay and Leave.

Statutory Adoption Leave

Employees can take up to 52 weeks’ Statutory Adoption Leave. The first 26 weeks is known as ‘Ordinary Adoption Leave’, the last 26 weeks as ‘Additional Adoption Leave’.

Leave can start:

on the date the child starts living with the employee or up to 14 days before the expected placement date (UK adoptions)

when an employee has been matched with a child to be placed with them by a UK adoption agency

when the child arrives in the UK or within 28 days of this date (overseas adoptions)

the day the child’s born or the day after (parents in surrogacy arrangements)

Statutory Adoption Pay

Statutory Adoption Pay (SAP) for employees is:

90% of their gross average weekly earnings for the first 6 weeks

£151.97 a week or 90% of their gross average weekly earnings (whichever is lower) for the next 33 weeks

Tax and National Insurance need to be deducted.

Calculate an employee’s adoption leave and pay using the maternity and paternity calculator.

Some employment types like agency workers, directors and educational workers have different rules for entitlement.

Extra leave or pay

You can offer more than the statutory amounts if you have a company scheme for adoption leave and pay. You must make sure your scheme’s policies are clear and available to staff.

Employment rights

An employee’s employment rights (like the right to pay, holidays and returning to a job) are protected during adoption leave. You still have to pay Statutory Adoption Pay even if you stop trading.

Eligibility

Some employees will not qualify for both leave and pay.

Statutory Adoption Leave

Employees must:

give you the correct notice

be classed as an employee

They do not have to give you proof of the adoption or surrogacy unless you ask for it.

Leave for employees adopting a child from overseas

Employee must also sign form SC6 if they’re adopting from overseas with a partner. This confirms they’re not taking paternity leave or pay.

Statutory Adoption Pay

Employees must:

have been continuously employed by you for at least 26 weeks up to any day in the week they were matched with a child

be on your payroll and earn at least £120 a week in an 8-week period - the ‘relevant period’

give you the correct notice

give you proof of the adoption

If your employee usually earns an average of £120 or more a week, and they only earned less in some weeks because they were paid but not working (‘on furlough’) under the Coronavirus Job Retention Scheme, they may still be eligible.

Use the adoption pay calculator to check an employee’s eligibility and work out their matching week, relevant period, notice period and adoption pay.

There are special rules for some employee situations, for example if they leave, become sick or if they or their child dies.

Pay for employees adopting a child from overseas

The requirements are the same for employees adopting from overseas, except they must have been continuously employed by you for at least 26 weeks at the start of the week when the pay will begin.

They must also sign form SC6 if they’re adopting with a partner. This confirms they’re not taking paternity leave or pay.

Pay for employees in surrogacy arrangements

The requirements are the same for employees in surrogacy arrangements, except they must have been continuously employed by you for at least 26 weeks up to any day in the 15th week before the baby is due.

If you ask for it, they must also give you proof that they intend to become the baby’s legal parent.

Who cannot qualify

Employees will not qualify for either adoption leave or pay if they:

become a special guardian or kinship carer

adopt a stepchild or family member

adopt privately, for example without permission from a UK authority or adoption agency

Notice period

Notice does not have to be in writing unless you request it.

Statutory Adoption Pay

Employees must give you 28 days’ notice before they want to be paid Statutory Adoption Pay, unless the time between the child being matched and placed is less than that.

Statutory Adoption Leave

Within 7 days of being matched with a child, employees must tell you:

how much leave they want

their leave start date

the ‘date of placement’ - the expected or actual date the child is placed with them

You have 28 days to write to them confirming their leave start and end date.

There are different rules for overseas adoptions and surrogacy arrangements.

Within 28 days of getting their ‘official notification’, employees adopting from overseas must tell you the date of the notification and when they expect the child to arrive in the UK.

If they’ve worked for you for less than 26 weeks, they can tell you within 28 days of the Sunday in their 26th week instead.

They must also tell you:

the actual date the child arrives in the UK - within 28 days of this date

how much leave they want and when they want it to start - giving you 28 days’ notice

Leave for employees in surrogacy arrangements

At least 15 weeks before the due date, employees in surrogacy arrangements must tell you when the baby is due and when they want to start their leave. You can ask for this in writing.

Changes to leave dates

Employees must tell you about changes to leave dates at least 28 days before their original start date or the new start date - whichever is earlier.

You must write to them if you have to amend their leave start and end dates.

Employees must give 8 weeks’ notice if they want to change the date they return to work.

Proof of adoption

Employees must give you proof of adoption to qualify for Statutory Adoption Pay. Proof is not needed for Statutory Adoption Leave unless you ask for it.

For adoption, the proof must show the:

name and address of the agency and employee

date the child was matched, for example the matching certificate

expected or actual date of placement, for example a letter from the agency

relevant UK authority’s ‘official notification’ confirming the parent is allowed to adopt (overseas adoptions only)

date the child arrived in the UK, for example a plane ticket (overseas adoptions only)

You must keep records of the proof.

Surrogacy arrangements

Proof is not needed for leave or pay unless you ask for it.

If you ask, employees must give you a written statement (‘statutory declaration’) to confirm that they:

intend to apply for a parental order in the 6 months after the baby’s birth

expect the order to be granted (for example because they do not have any convictions involving children, and the birth mother or father agree to the arrangement)

Refusing pay or leave

Statutory Adoption Leave

You cannot refuse adoption leave or change the amount of leave employees want to take off.

For adoption, you can delay the start date if the employee does not have a reasonable excuse for giving you the wrong amount of notice. To delay it, write to them within 28 days of their leave request.

Statutory Adoption Pay

You can refuse Statutory Adoption Pay if the employee does not qualify.

To refuse it, give the employee form SAP1 within 7 days of your decision. They must get this form within 28 days of their request for Statutory Adoption Pay or the date they were matched with the child (whichever is earlier).

Record keeping

You must keep records for HM Revenue and Customs (HMRC), including:

proof of adoption

the date Statutory Adoption Pay started

the payments of Statutory Adoption Pay you’ve made - including dates

the payments you’ve reclaimed

any weeks you did not pay and why

You must keep records for 3 years from the end of the tax year they relate to (for example by using form SAP2 or keeping your own records).

Help with statutory pay

For financial help with statutory pay, you can:

reclaim payments (usually 92%)

apply for an advance if you cannot afford payments