Real Time Information (RTI) (UK)

HMRC's system requiring UK employers to report PAYE information (pay, tax, NI, and deductions) electronically on or before each payday, replacing the previous end-of-year reporting model.

What Is Real Time Information (RTI)?

Key Takeaways

  • ✓RTI is HMRC's electronic reporting system that requires employers to submit details of employee pay and deductions on or before each payday, rather than reporting once at the end of the tax year.
  • ✓The system uses two main submission types: Full Payment Submission (FPS) for pay details and Employer Payment Summary (EPS) for adjustments like statutory pay reclaims and NI credits.
  • ✓RTI replaced the P35 (annual return) and P14 (individual employee end-of-year summary) forms, which were abolished when RTI became mandatory in 2013.
  • ✓All UK employers operating PAYE must use RTI. There are no exemptions. Even employers with just one employee must submit electronically through HMRC-recognized payroll software.
  • ✓RTI data feeds directly into HMRC's systems, enabling real-time tax code updates, accurate benefit calculations by DWP, and faster identification of PAYE errors.

Real Time Information changed how UK payroll works. Before 2013, employers reported PAYE information to HMRC once a year through an end-of-year return (the P35). HMRC didn't know what employees earned or what tax was deducted until months after the tax year ended. This made it difficult to issue correct tax codes, calculate benefit entitlements, and detect errors or fraud. RTI fixed that by requiring employers to report with every pay run. When you run payroll on the 28th of the month, HMRC gets the data on the 28th of the month. They see each employee's gross pay, tax deducted, NI contributions, student loan deductions, and pension contributions in near real time. The transition was significant. Over 2 million PAYE schemes had to upgrade their payroll software or processes. HMRC invested over GBP 300 million in the RTI infrastructure. The rollout started in April 2012 with pilot schemes and became mandatory for all employers by October 2013. Today, RTI is the backbone of UK payroll compliance. It connects employer payroll data to HMRC's tax systems, DWP's Universal Credit calculations, and the Student Loans Company's repayment tracking. When an employer files an FPS, it doesn't just satisfy a reporting obligation. It triggers tax code updates, benefit payment adjustments, and loan balance changes across multiple government systems.

2013Year RTI was introduced for all UK employers, replacing the end-of-year P35 and P14 submission process
2M+PAYE schemes operating under RTI across the UK (HMRC, 2024)
GBP 400Maximum monthly penalty for late FPS filing for employers with 250+ employees
45M+FPS submissions processed by HMRC each month during peak payroll periods

The Full Payment Submission (FPS)

The FPS is the primary RTI submission. It's sent on or before every payday and contains detailed information about each employee who was paid.

What the FPS contains

For each employee paid in the period: their name, NI number, date of birth, and address. Pay details: gross pay, taxable pay, tax deducted, employee NI contributions, employer NI contributions, student loan deductions, pension contributions, and statutory payments (SSP, SMP, SPP, etc.). Employment details: start date, leaving date (if applicable), pay frequency, tax code, NI category, hours worked (for NMW compliance). The FPS also contains employer-level data: the employer PAYE reference, Accounts Office reference, and payment period.

When to submit the FPS

The FPS must be submitted on or before the date employees are paid. If payday is the last Friday of the month and that falls on March 28, the FPS must reach HMRC by March 28. For monthly payrolls with a consistent payday, this is straightforward. For weekly payrolls, it means weekly submissions. Employers paying different groups on different dates need separate FPS submissions for each pay date. Late FPS submissions trigger automatic penalties.

Correcting FPS errors

If you submit an FPS with incorrect data, you can correct it by including the corrected figures in your next regular FPS. The payroll software should indicate which records are being corrected. For errors in previous tax years, an Earlier Year Update (EYU) is required. HMRC can accept EYUs for up to 6 years after the end of the relevant tax year. Avoid submitting multiple FPS submissions for the same pay date unless absolutely necessary, as this can cause processing issues in HMRC's systems.

The Employer Payment Summary (EPS)

The EPS is the secondary RTI submission, used to report information that reduces or adjusts the employer's PAYE liability.

When to use an EPS

An EPS is needed when: you're reclaiming statutory maternity, paternity, adoption, shared parental, or parental bereavement pay. You're claiming the Employment Allowance (up to GBP 5,000 off your employer NI bill). You're claiming NI credits for apprentices under 25 or employees under 21. You didn't pay any employees in a tax month and want to tell HMRC so they don't expect a PAYE payment. You're reporting CIS deductions suffered. The EPS must be submitted by the 19th of the month following the tax month. Tax month 1 (April 6 to May 5) requires an EPS by June 19.

EPS vs FPS

The FPS reports what you paid employees and what you deducted. The EPS reports adjustments to what you owe HMRC. Think of it this way: the FPS creates the liability (total tax, NI, student loan deductions), and the EPS reduces it (statutory pay recovery, Employment Allowance, NI holiday). Both submissions feed into HMRC's calculation of what the employer owes for each tax month. If the EPS reductions exceed the FPS liability, HMRC issues a refund or credit.

RTI Deadlines and Penalties

HMRC enforces RTI deadlines through an automated penalty system that scales with employer size.

Number of EmployeesMonthly Late Filing PenaltyApplies From
1-9GBP 100Second default onwards (first is penalty-free)
10-49GBP 200Second default onwards
50-249GBP 300Second default onwards
250+GBP 400Second default onwards

How RTI Penalties Are Calculated and Appealed

Understanding the penalty structure helps employers respond correctly when things go wrong.

Penalty calculation

Each tax month where an FPS is late counts as one default. The first late FPS in the tax year is penalty-free (a grace period). From the second default, monthly penalties apply. If a late FPS remains outstanding for more than 3 months, HMRC charges an additional 5% penalty on the tax and NI outstanding. After 6 months, another 5%. After 12 months, another 5%. For FPS inaccuracies (not just lateness), HMRC can charge separate inaccuracy penalties of up to 100% of the additional tax due, depending on whether the error was careless, deliberate, or concealed.

Appealing penalties

Employers can appeal RTI penalties within 30 days of the penalty notice. Valid grounds include: the filing was actually submitted on time (provide the submission reference), reasonable excuse (such as the death of a close relative, serious illness, fire or flood destroying records, or HMRC system outages). HMRC is generally reasonable about system-related issues and will cancel penalties if their own systems were down. Commercial software failures aren't automatically a reasonable excuse, but HMRC considers each case individually. Appeals are submitted through the employer's PAYE online account or in writing.

RTI and Payroll Software Requirements

RTI submissions must be made through HMRC-recognized payroll software. Manual submissions aren't possible for most employers.

Software options

Commercial payroll software (Sage, Xero, QuickBooks, BrightPay, IRIS, etc.) handles RTI automatically. When you finalize a pay run, the software generates and submits the FPS to HMRC using the Government Gateway. HMRC's own Basic PAYE Tools is free software for employers with 9 or fewer employees. It handles FPS, EPS, and year-end submissions but lacks the features of commercial software. Bureau payroll providers and accountants submit RTI on behalf of their clients using their own software. The employer remains legally responsible for the accuracy and timeliness of submissions, even when outsourcing.

Technical requirements

RTI submissions use the Government Gateway, HMRC's online authentication system. Employers (or their agents) need a Government Gateway user ID and password, an active employer PAYE scheme, and payroll software that can produce submissions in HMRC's required XML format. Submissions are acknowledged by HMRC with a receipt reference. If the submission fails validation (wrong format, missing fields, NI number mismatches), HMRC returns an error message. The employer must fix the error and resubmit. Most payroll software handles validation checks before submission to prevent rejections.

RTI's Impact on Benefits and Tax Credits

RTI data feeds directly into benefit calculations, making accurate and timely submissions even more important than just avoiding penalties.

Universal Credit

DWP uses RTI earnings data to calculate Universal Credit payments each month. When the employer submits the FPS, DWP receives the earnings data and adjusts the claimant's UC payment accordingly. Late or inaccurate FPS submissions directly affect employees' UC payments. An employee who receives too much UC because the employer filed the FPS late may face an overpayment recovery from DWP, creating financial hardship.

Tax code accuracy

HMRC uses RTI data to monitor whether employees' tax codes are correct throughout the year. If RTI shows an employee earning significantly more or less than expected, HMRC may adjust their tax code. Before RTI, these adjustments happened at year end, often resulting in large underpayment or overpayment notices. RTI enables in-year adjustments, spreading the tax impact more evenly. However, this means FPS errors can trigger incorrect tax code changes, causing problems for both the employee and the employer.

Common RTI Issues and How to Resolve Them

Even with modern payroll software, RTI submissions regularly encounter problems. Here are the most frequent issues and their fixes.

  • NI number mismatches: HMRC rejects FPS records where the NI number doesn't match their records. Verify NI numbers during the onboarding process. If you can't obtain the correct NI, use the employee's date of birth and gender. HMRC will attempt a match and return the correct NI number.
  • Duplicate employment records: if an employee leaves and rejoins the same employer, the payroll must create a new employment record with a new start date. Reusing the old record causes RTI processing errors and incorrect tax calculations.
  • FPS showing wrong pay date: the pay date on the FPS must match the actual date employees are paid, not the date the payroll was processed. A discrepancy can trigger late filing penalties even when the FPS was submitted on time relative to the processing date.
  • Year-end FPS not marked as final: the last FPS of the tax year must be flagged as the final submission. Missing this flag means HMRC doesn't know your payroll reporting for the year is complete, which can delay P60 issuance and year-end reconciliation.
  • EPS not submitted for nil payment months: if you don't pay any employees in a tax month, submit an EPS with a "no payment" indicator. Without this, HMRC expects a PAYE payment and may issue penalties for the "missing" payment.
  • Cross-tax-year payments: if a pay run straddles two tax years (processed in March but paid in April), the FPS must use the actual payment date. The payment falls in the new tax year for RTI purposes, even if the payroll was finalized in the old year.

Frequently Asked Questions

Can I submit the FPS after payday if I have a legitimate reason?

HMRC allows late FPS submission in very limited circumstances: if it's impractical to report on or before payday (e.g., your first FPS as a new employer). You should include a late reporting reason code on the FPS. Valid reason codes include: the first FPS for a new PAYE scheme (code G), a correction to an earlier submission (code H), or a payment to someone not on the payroll at the time of the regular FPS (code A). Using these codes doesn't guarantee you won't receive a penalty, but it provides context that HMRC considers when assessing penalties.

Do I need to submit an FPS if I pay employees weekly and monthly?

Yes, you need separate FPS submissions for each pay frequency and pay date. If you pay weekly staff on Fridays and monthly staff on the last day of the month, you submit an FPS each Friday for weekly employees and one FPS at month-end for monthly employees. Most payroll software handles this automatically by generating separate FPS submissions for each pay group.

What happens if HMRC's systems are down when I need to submit?

If HMRC's Government Gateway or online filing service is unavailable, submit the FPS as soon as the system comes back online. Note the date and time of the outage and any error messages. HMRC tracks their system availability and cancels late filing penalties caused by their own technical failures. Keep evidence of the failed submission attempt (screenshots, error logs from your payroll software) in case you need to appeal a penalty.

How does RTI work for employers with multiple PAYE schemes?

Each PAYE scheme has its own employer reference and requires separate FPS and EPS submissions. A group of companies where each subsidiary has its own PAYE scheme must file independently for each. The submissions don't cross-reference each other. However, if an employee works for two group companies, they should be on both payrolls with separate employment records. Each employer submits the FPS for their own portion of the employee's pay.

Does RTI replace the need for P45s, P60s, and P11Ds?

Partially. RTI replaced the P35 (annual employer return) and P14 (individual employee summary), which no longer exist. However, P45s, P60s, and P11Ds are still required. P45s are still issued to leavers (though Part 1 is transmitted through the FPS). P60s must still be given to employees by May 31. P11Ds are still filed separately from RTI for benefits in kind (unless the employer uses payrolling). HMRC has signaled that P45s may eventually become redundant as RTI data transfer becomes more reliable, but no formal timeline exists.

Can I outsource RTI to my accountant or payroll bureau?

Yes. Many employers, especially small businesses, use accountants or payroll bureaus to handle RTI submissions. The agent files using their own Government Gateway credentials but under the employer's PAYE reference. The legal responsibility for accurate and timely submissions remains with the employer, not the agent. If the agent files late or makes errors, HMRC penalizes the employer. Choose an agent carefully and maintain oversight of submission dates.
Adithyan RKWritten by Adithyan RK
Surya N
Fact-checked by Surya N
Published on: 25 Mar 2026Last updated:
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