Getting Payroll Information Right: FPS, EPS and Payroll IDs
Every payroll report you send HMRC is built from what you enter in your payroll software. If the details are right, you pay the right amount, your employees' tax codes and benefits are right, and you avoid time-consuming corrections. This plain-English guide covers what to record, when to send a Full Payment Submission (FPS) and an Employer Payment Summary (EPS), when to pay, what you can reclaim and how to handle payroll IDs. It is based on HMRC's webinar "Getting payroll information right" and HMRC's published guidance, with links to the official sources at the end.
The 5 key points
1. Your reports are only as good as what you enter
Your software builds every report from your employer details, your employees' details and each payment. Record everyone you pay, however little, even if they earn below £96 a week or pay no Income Tax.
2. Send an FPS on or before every payday
Sent early? Send a corrected FPS if anything changes. Sent after payday? Give a late reporting reason, or you may be charged a penalty.
3. Check from the 12th, pay by the 22nd
You can see what you owe from the 12th of the month after you send your reports. Payment must reach HMRC by the 22nd, or the 19th if you pay by post.
4. Use an EPS to reduce what you pay
Send an EPS by the 19th of the following month to reclaim statutory pay, recover CIS deductions, claim Employment Allowance, or tell HMRC you paid nobody that month.
5. Keep payroll IDs stable
An employee's payroll ID should stay the same throughout their employment. Never reuse an old ID, and tell HMRC on your next FPS if new software changes them.
Where your payroll reports come from
Your payroll software turns what you enter into the reports you send online to HMRC. That happens when you set up your employer details, when you first record an employee, whenever an employee's details change and every time you pay someone.
From those details your software works out the deductions: Income Tax, National Insurance, and student and postgraduate loan repayments. Accuracy matters beyond your own PAYE bill too. If an employee claims Universal Credit, the pay you report is used to work out their entitlement, so late or wrong reports affect their benefits.
Employee details to get right
Name, date of birth and National Insurance number, plus their start date and, when they go, their leaving date.
For employees under 21, and apprentices under 25, there is no employer Class 1 National Insurance to pay unless they earn more than £96 a week. A wrong date of birth means a wrong bill.
National Insurance category letters
The category letter tells your software how much National Insurance you and your employee pay. These are the main letters.
What changed from April 2026
Mariners on foreign-going vessels (deep-sea fishermen) now use letter A. You must give HMRC an employee's workplace postcode through payroll if you use a Freeport or Investment Zone category letter, and from April 2026 also if you pay Statutory Parental Bereavement Pay on Northern Ireland eligibility terms.
The Full Payment Submission (FPS)
The FPS tells HMRC what you paid each employee and what you deducted. If employees are paid on different cycles, for example some weekly and some monthly, you need an FPS on or before each of those paydays.
After the FPS: checking and paying
Tax months run from the 6th of one month to the 5th of the next. Here is how the dates work for reports sent between 6 July and 5 August.
Paying quarterly
If you usually pay HMRC less than £1,500 a month, you may be able to pay every three months instead. You still send an FPS on or before every payday.
The Employer Payment Summary (EPS)
An EPS tells HMRC about anything that reduces what you owe, or that you paid nobody in a tax month. These are the four reasons to send one.
Why the 19th matters
HMRC applies the reduction to the July tax month, so you pay the lower amount for July.
HMRC applies the reduction to the August tax month instead. You must pay the full amount due for July.
Reclaiming statutory pay
All employers can reclaim at least 92% of these statutory payments. If you qualify for Small Employers' Relief, you reclaim 100% plus an extra 9%. Your software includes the tax month, the amount claimed and any extra 9%, and each EPS shows the year-to-date total so HMRC can work out the reduction month by month.
Recovering CIS deductions
This only applies if your business is a limited company working as a subcontractor in construction and had CIS tax deducted from payments it received. The EPS shows the full CIS deductions taken in the tax month and your company's Corporation Tax reference. HMRC offsets the year-to-date amount against your PAYE bill automatically, adding any deductions from your own monthly CIS return if you are also a contractor.
What you should do
Check the company's HMRC online account for the balance to pay each month, keep a record of how much has been offset, and reclaim any outstanding balance at the end of the tax year.
Paid nobody this month?
If you paid no employees for at least one tax month, no FPS is due but you must send an EPS by the 19th of the following month. If you don't, HMRC will send you an estimate of what it thinks you owe and you may be charged a penalty.
Employment Allowance
Employment Allowance reduces your employer Class 1 National Insurance bill by up to £10,500 a year from 6 April 2026. The old rule that shut out employers with a Class 1 liability of £100,000 or more no longer applies, so more employers can claim. If you were eligible in 2025 to 2026 and nothing has changed, you are still eligible.
Businesses and charities with employees, whatever their total National Insurance bill. A company whose only employee paid above the secondary threshold is a director can't claim. You need to claim every tax year.
A public body, a public authority that is not a charity, or a business whose work is wholly or mainly public functions. Public funding can point to public functions, but funding alone does not decide it.
How the claim works
Worked example
An employer owes £1,000 of employer Class 1 National Insurance every month and sets the indicator to Yes at the start of the tax year.
Payroll IDs
Your own reference for each employment in your payroll records. Most software allocates one when you add an employee; if not, you choose it. HMRC shows it on the notices it sends you, such as tax code notices.
Unique to the person, not the job. Use it in your payroll records so tax and National Insurance are credited to the right employee.
Avoiding payroll ID errors
Official guidance
- Running payroll: reporting to HMRC (FPS)
- Sending an FPS after payday
- National Insurance category letters
- Pay employers' PAYE
- Get financial help with statutory pay
- Employment Allowance
- Employment Allowance: further employer guidance
- Our guide: Payroll risks for employers
Want your payroll reports right first time? We run payroll for businesses across Paisley and Renfrewshire, and can check your set-up, reclaim what you're entitled to and keep your FPS and EPS on time.
Talk to us about payrollThis guide is general information based on HMRC's published guidance and webinar, and is not advice for your specific circumstances. Rules change, so check the official guidance or speak to us before acting.