How to Submit Payroll to HMRC: A Complete RTI Filing Guide

It's payday. The bank file is ready, employees are expecting their wages, and someone remembers that HMRC also needs a report. In a small business, that last step often gets treated as an afterthought, especially when payroll is processed through Xero or another cloud app and the software appears to have handled the calculations automatically.

The calculation is only part of the job. Submitting payroll to HMRC means sending accurate Real Time Information (RTI) reports on the correct dates, checking that HMRC accepted them, and knowing how to correct the record when something goes wrong. The difficult problems usually come from small details, such as an incorrect payment date, a tax period mapped to the calendar month, or an employee address containing a formatting character the system can't process.

Understanding What HMRC Expects From Every Payroll Run

HMRC doesn't treat payroll as an annual declaration. Under the Real Time Information system, an employer must send a Full Payment Submission (FPS) on or before each payday. The FPS tells HMRC about the employees paid in that run, including pay, deductions, and the relevant payroll information. This reporting duty continues throughout the tax year, every time staff are paid. HMRC's RTI guidance sets out the continuing submission cycle and the final reporting requirements.

That means paying employees and reporting payroll are connected, but they aren't the same obligation. The FPS is normally due on or before the actual payment date, even if the employer pays the PAYE liability to HMRC monthly or quarterly. Confusing the RTI filing deadline with the PAYE payment deadline is a common way for an otherwise organised employer to fall behind.

Practical rule: Treat every payday as an HMRC reporting event, not merely a banking event.

An Employer Payment Summary (EPS) has a different purpose. It adjusts the liability calculated from the FPS, for example where the employer needs to reclaim statutory pay or report a period in which no employees were paid. If you need a practical overview of wider employer duties, see this guide to essential employer payroll responsibilities in the UK for 2026.

Before opening Xero, establish three facts:

• Who was paid: Confirm the employees included in the pay run and whether any starters or leavers need attention.
• When they were paid: Use the date money reached employees, not the date the payroll was calculated.
• What HMRC needs to know: Decide whether the FPS is sufficient or whether an EPS is also required.

This mindset prevents a dangerous assumption, namely that pressing “finalise” in payroll software completes the compliance process. It doesn't. You still need to send the submission, authenticate it, and retain evidence of the result.

Getting Your PAYE Online Account and Software Ready

A clean first submission starts with correct setup. You need to register as an employer with HMRC, obtain access to PAYE Online, and have the Government Gateway credentials needed to authenticate the filing. HMRC's Basic PAYE Tools user guide describes the core process, including checking outstanding submissions, sending them, signing in with the Government Gateway ID and password, and reviewing the status.

Your payroll software also needs the right employer identifiers. Enter the PAYE reference and Accounts Office reference exactly as HMRC issued them. HMRC says the FPS must contain these references in the payroll software. A single incorrect character can prevent the submission from matching the employer record, so copy the details from official correspondence rather than relying on memory or an old spreadsheet.

Build the employer record before adding calculations

In Xero Payroll and similar cloud applications, review the organisation settings before processing the first pay run. Check the legal employer name, PAYE details, payment frequency, tax-year settings, and connection to the relevant HMRC service. The labels differ between products, but the control points are broadly the same.

Then review each employee record. Pay particular attention to:

• Full name: Remove accidental leading spaces and check spelling against the employee's official records.
• National Insurance number: Enter the number carefully and investigate missing or apparently invalid details before filing.
• Date of birth: Check the day, month, and year fields, including zero-padding where the software requires a particular format.
• Address: Avoid unsupported formatting, including commas where the payroll application or submission interface can't accept them.
• Employment details: Confirm tax code, National Insurance category, director status, start date, and leaving information.

HMRC's user-guide material identifies small formatting issues, including commas in addresses, leading spaces, missing fields, and incorrect or zero-padded birth-date details, as causes of early RTI submission failures. The lesson is straightforward: data validation is a payroll control, not a cosmetic tidy-up.

Before the first live run, complete a test review with the person responsible for payroll approval. Keep the Government Gateway credentials secure, restrict access to authorised users, and make sure someone else knows how to access the process if the usual payroll operator is absent. For a broader setup checklist, use this guide on how to set up payroll correctly.

Submitting Your Full Payment Submission Correctly

The FPS is the central RTI report. In practical terms, the process is: prepare the pay run, review the figures and employee data, finalise the payroll, send the FPS, authenticate the submission, and confirm that HMRC accepted it.

Start with the payment date. HMRC requires the FPS on or before the date employees are paid, and the FPS must use the actual employee payment date, not the day payroll was processed. If wages are processed on one day but reach employee accounts later, the report should reflect the payment date used for the payroll obligation.

Before selecting the submission button in Xero or another cloud payroll app, review the following:

1. Payment date: Confirm it matches the date employees are paid.
2. Employee population: Check that every paid employee is included and no inactive record has been selected accidentally.
3. Gross pay and deductions: Compare the payroll summary with approved timesheets, salary changes, benefits, pension information, and statutory payments.
4. Year-to-date figures: Look for unusual movements, particularly after a correction or a change in director pay.
5. Employer references: Verify the PAYE reference and Accounts Office reference.
6. Warnings and validation messages: Resolve errors before sending rather than treating them as harmless notifications.

Tax periods also need careful handling. HMRC's tax-month calendar runs from the 6th of one month to the 5th of the next, not from the first to the last day of a calendar month. A payroll date mapped to the wrong period can leave HMRC expecting a liability in one period while your internal records show it in another.

Send, authenticate, and prove acceptance

Once the figures pass review, choose the option to submit the FPS. The exact wording varies, but HMRC's Basic PAYE Tools workflow uses “Send all outstanding submissions”, followed by Government Gateway authentication and a review of the submission status and results.

Don't stop at the confirmation screen. Save the accepted status, submission reference, payroll report, and any warning messages in the payroll records. If HMRC later shows an unexpected liability, you need to demonstrate what was sent and when.

The video below shows the type of software workflow employers may encounter when submitting payroll information.

If a submission is rejected, don't repeatedly resend the same data without identifying the cause. Read the validation message, correct the employee or employer record, rerun the relevant payroll checks, and submit through the proper route. Repeated attempts can create confusion if one version is accepted and another remains outstanding.

When and How to File an Employer Payment Summary

An Employer Payment Summary (EPS) adjusts the liability calculated from the FPS. It does not replace the FPS. Employers use it when payroll information changes the amount due for a tax period, such as reclaiming eligible statutory pay or reporting that no employees were paid during the relevant tax month.

The HMRC EPS guidance says to submit an EPS by the 19th of the following tax month when it reduces the amount owed from the FPS. This timing matters because, without the adjustment, HMRC may calculate the employer's liability from the FPS alone.

Situations that call for an EPS

Create an EPS when the payroll circumstances require a change to the reported liability. Common examples include:

• Statutory pay recovery: Enter the relevant reclaim in Xero or your payroll software, then send the EPS through its HMRC submission area.
• No employees paid: Report the period when the business paid nobody. Leaving out the FPS without an EPS can appear as an unexplained gap.
• Other liability reductions: Check the EPS options in the payroll software and the applicable HMRC instructions when an adjustment changes the employer amount due.

The practical sequence is straightforward, but the tax period must be right. Finalise the payroll information, select the correct tax month, create the EPS, review the adjustment, submit it, authenticate if required, and confirm that HMRC accepted it. In cloud payroll apps, a payroll date or accounting-period setting can point to the wrong tax month, so compare the software's period with the PAYE record before sending.

Keep the FPS and EPS records together. HMRC uses both submissions to establish the employer's position for the period.

A missing EPS can leave HMRC treating the full FPS liability as payable.

If you find an error, changing the completed payroll record alone does not update HMRC. File a corrected EPS as soon as possible through the appropriate amended-submission route. Depending on the software, you may need to release the period, reverse a pay run, or create an amendment. Check the resulting submission status rather than assuming that an on-screen change has been transmitted.

National Insurance category errors need careful handling. HMRC guidance describes remedial treatment that can involve entering “0” in all National Insurance fields for the incorrect category letter for the remainder of the tax year, followed by the correct treatment. Do not improvise this adjustment. Check the software instructions and correction process, particularly when several employees or earlier pay periods are affected. Save the original figures, amended report, submission reference, and acceptance message so the correction can be traced later.

Key Payroll Deadlines and Penalty Risks

RTI deadlines are easier to manage when they sit on a payroll calendar rather than in someone's memory. The central distinction is between the recurring FPS, the adjustment-based EPS, and the final submissions that close the tax year.

The final dates come from HMRC's RTI guidance. HMRC's internal manual describes allowable EPS submission windows by tax month, from the window beginning on 6 March and ending on 19 May for tax month 1, through the final tax-month window, which runs from 6 February to six years after the tax year. Those windows are useful for planning, but they don't remove the need to file promptly.

Separate lateness from payment

A late FPS and a late PAYE payment are different problems. Sending the FPS on payday doesn't itself pay HMRC, and paying HMRC doesn't repair a missing or inaccurate RTI report. Keep separate controls for filing, payment, and reconciliation.

Penalty exposure depends on the circumstances, including the size of the payroll and the duration or pattern of non-compliance. Rather than relying on a generic penalty estimate, investigate every late or rejected submission immediately, keep evidence of the cause, and correct the underlying record. At year end, remember that HMRC allows correction FPS returns up to 19 April after the end of the tax year, as described in its PAYE reporting guidance.

Common Filing Mistakes and How to Fix Them

A payroll submission can fail because of one incorrect character, even when the gross pay calculation is right. In Xero and other cloud payroll apps, the common problems are poorly formatted employee data, an incorrect payment date, and figures carried into the wrong tax period. Treat a rejected submission as a data-tracing exercise. Record the rejection message, identify the affected employee or employer field, correct the source record, and check whether payroll totals or year-to-date values also need amendment.

Faults that appear repeatedly

• Name or NI mismatch: Compare the employee's details with official documentation. Do not guess an NI number or change a name to force acceptance.
• Address formatting: Remove unsupported commas, leading spaces, or incomplete fields flagged by the software. Save the corrected record, then review it before resending.
• Birth-date formatting: Confirm the date components and the format required by the application, especially where a missing or zero-padded value causes rejection.
• Director pay: Check director-specific National Insurance treatment and cumulative figures. A change made after the pay run can affect more than the latest payslip.
• Incorrect payment date: Use the date employees were paid, not the date the operator completed or approved the payroll.
• NI category error: Follow the software's formal correction route and apply HMRC's treatment for the incorrect category letter.

Tax-period alignment causes a separate class of errors. Check the pay date, tax month, payroll period, and year-to-date figures together. A payroll run completed late can still belong to the period determined by the actual payment date. Correcting only the payslip may leave the RTI totals wrong.

The correction route depends on the error and tax year. For a current-year mistake, the next FPS may need corrected year-to-date figures. For a previous-year issue, follow the route specified by HMRC and your software. An Earlier Year Update should not be selected automatically. Check the PAYE manual guidance on Earlier Year Updates before choosing that process, because the available correction workflow can differ between products.

Do not overwrite an internal payroll record and treat the problem as closed. HMRC needs the correction submitted through RTI.

After resubmission, reconcile the HMRC liability against the corrected FPS and any relevant EPS. Keep the original and amended reports, the reason for the change, and the acceptance confirmation together. That audit trail makes later questions far easier to answer and shows exactly how the correction was handled.

Deciding Whether to Manage Payroll In-House or Outsource

In-house payroll works when one person owns the process, understands RTI, has reliable employee data, and can cover payday absences. Cloud tools such as Xero can make approvals and record access easier, but they don't remove the need for judgement when a submission is rejected or a director's pay needs correction.

Outsourcing becomes more attractive when payroll includes variable hours, multiple pay frequencies, statutory leave, pension changes, directors, or frequent starters and leavers. The right comparison isn't only the software subscription. Consider the owner's review time, the cost of correcting errors, the need for cover during holidays, and the risk of missing an RTI deadline while dealing with normal business demands.

Outsourcing doesn't transfer legal responsibility away from the employer, so choose a provider that explains its workflow, approval points, correction handling, and evidence retention. Stewart Accounting Services' outsourced payroll service is one option for businesses that want payroll processing and RTI administration handled through a supported cloud workflow, including Xero-based processes.

The practical decision is simple. If payroll remains predictable and someone can operate it properly every pay period, in-house management may be suitable. If the business is growing, exceptions are increasing, or the owner is still the only person who knows how to file, outsourcing can remove a fragile dependency.

Review your next payroll before payday, not after it. Check the actual payment date, validate employee master data, confirm the PAYE references, submit the FPS, and save the acceptance result. If your team lacks time or confidence to manage rejected filings and corrections, contact Stewart Accounting Services to discuss a payroll process built around Xero and compliant RTI submissions.