Payroll deadlines and penalties: what happens if you report or pay late
acrenvo.com/guides/payroll-deadlines-and-penalties, last reviewed 21 October 2026
Rhys is fictional. Rhys is a builder trading as a sole trader with two employees, paid every month. Last spring Rhys was away when payday came round, the report went in a week late, and the payment to HMRC followed a few days after that. Rhys wants to know what that could cost and how to avoid it happening again. This guide sets out the dates and the penalties for Pay As You Earn (PAYE) as GOV.UK states them.
The dates in each tax month
Payroll runs to the tax month. Tax months run from the 6th of one month to the 5th of the next. Within it, three dates matter most.
- Send the FPS on or before your employees’ payday, even if you pay HMRC quarterly instead of monthly.
- Send an EPS by the 19th of the following tax month for HMRC to apply any reduction (for example statutory pay) on what you’ll owe from your FPS.
- Pay what you owe by the 22nd of the month (or the 19th if paying by post) - you may have to pay a penalty if you do not.
If you pay by cheque through the post, it must reach HMRC by the 19th of the month. If you usually pay less than £1,500 per month, you may be able to pay quarterly instead of monthly. Contact the payment helpline to find out.
Penalties for late or missing reports
HMRC looks at whether each report arrived when it should. You can get a penalty if:
- your Full Payment Submission (FPS) was late
- you did not send:
- the expected number of FPSs
- an Employer Payment Summary (EPS) when you did not pay any employees in a tax month
There is some room for a slip. HMRC will not charge a penalty if:
- your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday, however employers who regularly file after the payment date but within 3 days may be contacted or considered for a penalty
- you’re a new employer and you sent your first FPS within 30 days of paying an employee
- it’s your first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme)
When a penalty does apply, its size follows the size of the payroll. What you pay depends on how many employees you have.
| Number of employees | Monthly penalty |
|---|---|
| 1 to 9 | £100 |
| 10 to 49 | £200 |
| 50 to 249 | £300 |
| 250 or more | £400 |
If you run more than one PAYE scheme, you can be charged penalties for each.
Rhys has two employees, so a penalty for the late month would be £100. Whether one is charged at all depends on the exceptions GOV.UK lists, including whether it was the first late report of the tax year.
HMRC can also estimate what you owe when reports are missing. It can raise a specified charge, based on its estimate of what you should pay, if you do not:
- submit your FPS on time
- tell HMRC, by sending an EPS, that you have not paid any employees
A specified charge does not replace the need for you to send your FPS or EPS.
Penalties for paying late
Late payment is charged separately from late reporting. HMRC charges late payment penalties on PAYE amounts that are not paid in full and on time. The first failure to pay on time does not count as a default.
| Number of defaults in a tax year | Penalty percentage applied to the amount that is late in the relevant tax month (ignoring the first late payment in the tax year) |
|---|---|
| 1 to 3 | 1% |
| 4 to 6 | 2% |
| 7 to 9 | 3% |
| 10 or more | 4% |
Daily interest will continue to build up on all unpaid amounts from the due and payable date to the date of payment.
If you’ve still not paid a monthly or quarterly payment in full after 6 months, you’ll be charged an additional penalty of 5% of the amounts unpaid. A further penalty of 5% will be charged if you’ve not paid after 12 months. These additional penalties apply even where only one payment in the tax year is late.
GOV.UK’s page on late payment penalties for PAYE and National Insurance also covers amounts that fall due once a year or now and then, which follow different penalty dates.
Keeping payroll records
The records behind each report are a duty of their own. Your records must show you’ve reported accurately, and you need to keep them for 3 years from the end of the tax year they relate to. HMRC may check your records to make sure you’re paying the right amount of tax.
If you do not keep full records, HMRC may estimate what you have to pay and charge you a penalty of up to £3,000.
If you get a penalty notice
HMRC sends penalty notices every quarter. If you pay the penalty within 30 days of getting the notice you will not be charged interest.
You can appeal if you think:
- the penalty is not due
- the amount of the penalty is wrong
- you had a reasonable excuse for sending your reports late
GOV.UK’s page on what happens if you do not report payroll information on time lists the grounds HMRC accepts and explains how to appeal online or in writing. The guide to reporting payroll in real time covers the reports themselves.
Questions about payroll deadlines and penalties
How much is the late filing penalty for a small employer?
GOV.UK sets the late filing penalty by the number of employees. For 1 to 9 employees it is £100 a month. If you run more than one PAYE scheme, you can be charged penalties for each.
Will HMRC penalise my first late report in a tax year?
GOV.UK allows for one slip in the year. HMRC will not charge a penalty if it’s your first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme).
Does my first late payment count towards a penalty?
GOV.UK leaves the first one out of the count. The first failure to pay on time does not count as a default. Interest still applies, though. Daily interest will continue to build up on all unpaid amounts from the due and payable date to the date of payment.
How long do I have to pay a penalty notice?
GOV.UK gives 30 days to pay a penalty notice without interest. If you pay the penalty within 30 days of getting the notice you will not be charged interest. If you disagree with the penalty, GOV.UK explains how to appeal.
More in: Payroll for small employers
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Sources
This is general information, not tax, payroll, pensions or legal advice. For advice on your own business, speak to an accountant, a payroll adviser or a tax adviser.