GOV.UK Employer PAYE Reference Number 2024 Explained

In the UK, any organisation with employees—including charities, public sector entities, and private companies—must register for a PAYE (Pay As You Earn) number if it meets specific criteria.
The number consists of a unique set of letters and numbers issued by HMRC to identify your employer and their Pay As You Earn (PAYE) scheme.

What is an employer PAYE reference number?

Also known as an employer reference number (ERN), ‘employer paye reference number’, ‘paye reference’ or the tax office employer reference, the PAYE reference is a unique alphanumeric identifier used to manage the collection of Income Tax and National Insurance contributions from employees' salaries. It consists of two parts: the first is a three digit code (e.g., 123) that identifies the specific HMRC office number responsible for handling the company's PAYE matters. The second part, which follows a forward slash (e.g., AB12345), is the unique reference assigned to the employer by the tax office. When combined, the complete number typically appears as 123/AB12345.

Who needs to register for PAYE, and what are the requirements?

All UK businesses or organisations with employees must register for PAYE if during the current tax year (starting from 6 April), any of the following applies to an employee:

Earnings: They are paid £123 or more per week. Above this amount, they become eligible for National Insurance Contributions (NICs), which the employer must report.
Expenses or Benefits: They receive expenses or company benefits (known as benefits in kind). Some of these benefits may affect tax liability and be subject to NICs.
Pension Income: They are receiving a pension. If the combined income from work and pension pushes them into a higher tax bracket, this affects their tax rate.
Multiple Jobs: They have had another job. If income from multiple jobs exceeds tax-free thresholds, the correct tax must be applied to the total earnings.
Taxable Benefits: They have received Jobseeker’s Allowance, Employment and Support Allowance, or Incapacity Benefit, all of which are taxable and can impact the employee’s overall tax position.

✅ Insight

If you do not meet the requirements for PAYE, you can still register as an employer and obtain a PAYE reference number.

When to Register as an Employer

You can register as an employer even if you are the sole director of a limited company and are paying yourself. You are required to complete this registration before your first payday, as it can take up to 30 working days to receive your employer's PAYE reference number. But you cannot register as an employer two months before you start employing.

If you need to pay an employee (including yourself as director) before receiving your PAYE number, follow these steps:

Run payroll as usual.
Store your Full Payment Submission (FPS).
Once you receive your PAYE reference number, submit a late FPS to HMRC.

When to Register for PAYE

You must register for PAYE when wages exceed the Lower Earnings Limit (LEL) or any of the conditions specified above. This ensures you manage income tax and National Insurance contributions on your employee's behalf. Registering for PAYE helps you comply with tax regulations while confirming your status as an employer.

How do employers calculate PAYE deductions from employees' salaries?

PAYE income tax is calculated by determining how much an employee earns above the personal allowance, set at £12,570 for the 2024/25 tax year. Employers deduct tax based on the portion of the employee's salary that exceeds this allowance.

After that, deductions are made according to the income UK tax brackets below.

Band	Rate	Taxable Income
Personal exemption	0%	Up to £12,570
Basic rate	20%	£12,571 to £50,270
Higher rate	40%	£50,271 to £125,140
Additional rate	45%	Over £125,140

How do changes in employee tax codes affect PAYE calculations?

Tax codes indicate how much income tax is deducted from an employee's earnings under the PAYE (Pay As You Earn) system. They classify taxpayers based on their eligibility for various tax allowances and rates. The table below outlines common tax code letters and their meanings, clarifying how each code affects PAYE calculations.

Letters	Meaning
L	You’re entitled to the standard tax-free Personal Allowance
M	Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance.
N	Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner.
T	Your tax code includes other calculations to work out your Personal Allowance
OT	Your Personal Allowance has been used up, or you’ve started a new job, and your employer does not have the details to give you a tax code.
BR	All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
DO	All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
D1	All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
NT	You’re not paying any tax on this income
S	Your income or pension is taxed using the rates in Scotland
SOT	Your Personal tax exemption (Scotland) has been used up, or you’ve started a new job, and your employer does not have the details they need to give you a tax code.
SBR	All your income from this job or pension is taxed at the basic rate in Scotland (usually used if you’ve got more than one job or pension)
SD1	All your income from this job or pension is taxed at the higher rate in Scotland (usually used if you’ve got more than one job or pension)
SD2	All your income from this job or pension is taxed at the advanced rate in Scotland (usually used if you’ve got more than one job or pension)
SD3	All your income from this job or pension is taxed at the top rate in Scotland (usually used if you’ve got more than one job or pension)
C	Your income or pension is taxed using the rates in Wales
C0T	Your Personal Allowance (Wales) has been used up, or you’ve started a new job, and your employer does not have the details they need to give you a tax code.
CBR	All your income from this job or pension is taxed at the basic rate in Wales (usually used if you’ve got more than one job or pension)
CD0	All your income from this job or pension is taxed at the higher rate in Wales (usually used if you’ve got more than one job or pension)
CD1	All your income from this job or pension is taxed at the additional rate in Wales (usually used if you’ve got more than one job or pension)

What are the deadlines for paying PAYE tax to HMRC?

PAYE tax payments to HMRC must be made by specific deadlines based on your payment frequency:

Monthly Payments: If you pay every month, your payment is due by the 22nd of the following tax month.
Quarterly Payments: For quarterly payments, such as those covering April 6 to July 5, your payment is due by the 22nd of the month following the end of the quarter, which would be July 22 in this example.
Cheque Payments: If you choose to send your payment via cheque through the post, ensure that it arrives at HMRC by the 19th of the month.

Where can I find my PAYE number—on my P60, P45, or payslips?

You should be able to find your PAYE and national insurance number on your P60s, P45, P11D or wage slip, as each of these documents plays an important role in tracking your salary and tax contributions.

P60: This form provides a summary of your total earnings and deductions for the tax year. It includes your PAYE number because it records all tax paid through your employer, which is linked to your PAYE scheme.
P45: When you leave a job, your P45s details your income and tax paid up to the point of leaving. The PAYE number is included here to ensure continuity of tax records if you start a new job or need to reference past tax payments.
Wage slip: Your wage slip shows the breakdown of your pay, including deductions like tax and National Insurance. The PAYE number is present because it links your tax payments to the HMRC system through your employer.
Form P87: Used when claiming for tax relief on employment expenses, this form also requires your PAYE number, ensuring accurate processing of tax claims through your employer’s payroll.

By having the PAYE number on these documents, you can easily track your tax contributions across different stages of your employment.

What software or tools are available to help employers manage PAYE?

There are several local and international payroll management solutions available to help employers manage PAYE for UK employees. These tools streamline the process of calculating tax deductions, submitting information to HMRC, and ensuring compliance. Some popular options include:

Deel: Provides both local and international PAYE management, making it ideal for companies with a global workforce. It simplifies payroll, tax filings, and compliance across different countries, including the UK.
Xero: A cloud-based accounting software that integrates payroll features to automate PAYE calculations, submissions to HMRC, and other payroll-related tasks for UK businesses.

Sage Payroll: A robust solution that helps manage payroll for businesses of all sizes, automating PAYE, tax, and pension contributions while ensuring accurate reporting to HMRC.

Each of these tools simplifies the PAYE process by automating tax calculations, reducing errors, and ensuring timely submissions to HMRC, which helps businesses stay compliant with UK tax regulations.

What steps should an employer take to correct an error in PAYE deductions?

✅ Insight

Your PAYE number is different from the following.

DUNS Number: A unique nine-digit identifier Dun & Bradstreet issued to identify and track businesses globally, especially for credit reporting.
Company Registration Number (CRN Number): A unique number assigned to a company upon formation in the UK, used to identify it on the Companies House register.
Company UTR Number: Issued by HMRC to identify a company for corporation tax purposes.
EORI Number: The Economic Operator Registration and Identification (EORI) number is used for customs purposes, enabling businesses to trade with non-EU countries.
Accounts Office Reference Number (AORN): This unique number issued by HMRC identifies the employer’s payroll account for PAYE payments.
Webfiling Authentication Code: Used to verify identity when filing documents online with Companies House, ensuring secure access to a company's records.
Tax Identification Number UK (TIN): Includes UTR, NINo, CRN, VAT Registration Number, and PAYE reference, critical identifiers for individuals and businesses to meet tax and compliance requirements.