What Are PAYE Schemes and How to Register for PAYE as an Employee?

If you’ve started a new job in the UK, you’ve probably heard the term PAYE thrown around. But what really is a PAYE scheme, and do you, as an employee, need to register for PAYE yourself? Let us clear up the confusion.

What Is a PAYE Scheme?

PAYE (Pay As You Earn) is the system HMRC uses to collect Income Tax and National Insurance (NI) directly from your wages before they hit your bank account. Instead of paying a big tax bill at the end of the year, your employer deducts the correct amount each payday and sends it to the tax office.

Think of it like a Netflix subscription: small, automatic payments rather than one big charge. It keeps things hassle-free for you and makes sure the government gets what it’s owed on time.

Do Employees Need to Register for PAYE as employee?

As an employee, you don’t usually need to register for PAYE yourself. That’s your employer’s job. When you start a new job, they’ll:

1. Ask for your P45 (if you had a previous job that tax year).
2. If you don’t have a P45, they’ll have you fill out a Starter Checklist (formerly called a P46) to determine your tax code.
3. Set you up on their PAYE scheme, deducting the right tax and NI from your payslip.

There are a few cases, however, where you might need to take action.

• If you’re self-employed as well as employed – You’ll need to file a Self Assessment tax return.
• If your employer isn’t deducting tax properly – Check your payslips and contact HMRC if something looks off.
• If you’re a company director – Even if you’re the only employee, your company must registering for PAYE to pay you a salary.

How Does PAYE Work for Employees?

Once your employer registers you under their PAYE scheme, here’s what happens.

• Your tax code is assigned (like 1257L, the most common one).
• Tax and NI are automatically deducted from your wages.
• Your employer sends these deductions to HMRC every month.
• You get a payslip showing your earnings, deductions and net pay.

If you’ve ever wondered why your take-home pay is less than your salary, now you know. PAYE is doing its thing in the background.

What If Something Goes Wrong?

Sometimes mistakes happen. If you think you’re paying too much (or too little) tax, here’s what to do.

• Check your tax code – HMRC sometimes gets it wrong, especially if you’ve changed jobs.
• Contact HMRC – They can adjust your code if needed.
• Keep an eye on your payslips – If tax isn’t being deducted at all, flag it ASAP.

Final Thoughts

As an employee, you don’t need for PAYE: your employer handles that. But it’s still good to understand how the system works so you can spot errors and avoid nasty surprises.

If you’re ever unsure about your tax, HMRC’s helpline or online portal can help. And if you’re juggling employment with self-employment, remember: PAYE covers your salary, but you’ll still need to file a Self Assessment for other income.