Payroll Hub · Simple employer guide
What will employees notice when benefits appear in payroll?
A plain-English explanation of payslips, take-home pay and what employers should tell their teams.
Best for: Business owners and people working in payroll, finance or HR
- Plain-English guide
- Reviewed 11 August 2026
In simple terms
Status: HMRC interim guidanceFrom April 2027, employees may pay tax on affected benefits sooner, so their take-home pay can change. The benefit is not extra salary and will not be added to their bank payment. A clear payslip label and a short explanation before the first affected payday will prevent most confusion.
Will take-home pay change?
It can. Tax on the benefit will usually be collected during the year, which may reduce the amount paid into the employee’s bank account. The exact change depends on the employee’s pay, tax code and benefit value.
What should the payslip show?
Show the benefit separately from wages or salary. The payslip should make it clear that the figure was used to calculate tax but was not added to the employee’s cash pay.
Optional detail
Official guidance behind this answer
The short answers above are enough to get started. Open these sections only if you need to check the current HMRC position or source.
What should employers tell employees before April 2027?
Status: HMRC interim guidanceBefore April 2027, tell affected employees that tax on their benefit will be collected through payroll and that the benefit is not extra salary or cash pay.
Read the full answer and official source
Name the benefit, explain what may appear on the payslip and give the employee a clear contact if the cost, vehicle or dates look wrong. Some employees may also have older benefit tax being collected through their tax code.
Source: HM Revenue and Customs — Getting ready for mandatory payrolling of benefits in kind
Source updated: . Workmax reviewed: .
What Benefits in Kind must be payrolled from 6 April 2027?
Status: HMRC interim guidanceFrom 6 April 2027, HMRC says employers will need to put company cars, car fuel, vans, van fuel and employer-provided medical benefits through payroll.
Read the full answer and official source
These are the first five benefit groups in the change. HMRC currently plans to add most other Benefits in Kind from April 2028, while loans and accommodation will continue to have separate arrangements.
Source: HM Revenue and Customs — The phased introduction of mandatory payrolling for benefits in kind
Source updated: . Workmax reviewed: .
Plain-English Benefits in Kind glossary
- Benefit in Kind (BiK)
- A non-cash benefit or expense provided by an employer that may create an Income Tax liability.
- Payrolling benefits
- Including a benefit's taxable value in payroll so Income Tax is collected through PAYE.
- Cash equivalent
- The statutory taxable value of a benefit, which may differ from its purchase price or cash cost.
- Class 1A NIC
- An employer National Insurance liability charged on many taxable benefits and expenses.
- P11D
- The end-of-year form traditionally used to report taxable expenses and benefits for an employee.
- FPS
- The Full Payment Submission employers send through Real Time Information when payroll is reported to HMRC.
