Pay as you earn (PAYE) is the basic tax taken out of your employees’ salary or wages. The amount of PAYE you deduct depends on your employee’s tax code.
PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.
Each pay period you need to calculate and deduct PAYE. Each payday you send Inland Revenue these details for your employees.
Note: Sometimes different rules apply to some payments, e.g., lump sum payments like bonuses or retirement payouts, or to special kinds of workers. Check out the links below.