If you employ staff, you are responsible for deducting Pay-As-You-Earn (PAYE) tax from their salaries and remitting it to the relevant State Internal Revenue Service (IRS). PAYE is not your company's tax — it is your employees' personal income tax, which you collect and pass on. Treating it as anything else is where employers get into difficulty.
The monthly cycle
PAYE deducted in a month is remitted to the State IRS by the 10th day of the following month. The amount each employee pays depends on their taxable income after statutory reliefs and allowable deductions such as pension and the Consolidated Relief Allowance.
The annual return
Beyond the monthly remittances, employers file an annual return of all emoluments paid and taxes deducted for the previous year. This reconciles what was withheld across the year with what each employee actually owed, and it is a compliance requirement in its own right.
PAYE is your employees' tax, collected by you. The monthly deadline is the 10th of the following month; the annual employer return closes off the year.
Getting it right
- Register with the State IRS in the state where your employees are based.
- Apply the correct reliefs before calculating tax, or you will over-deduct.
- Remit by the 10th to avoid penalties and interest.
- Keep payslips and remittance evidence — employees and auditors both rely on them.
We run payroll and PAYE for clients end to end: correct deductions, on-time remittance, payslips, and the annual return — so your team is paid properly and your obligations are met without you having to track them.