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UK payroll glossary: terms explained

Find plain-English explanations of UK payroll terms, HMRC reports, pension language and the forms that support a controlled payroll process.

84+ payroll termsReviewed for the 2026/27 tax yearWritten for UK employers

84 terms shown.

APayroll terms
Accounts Office referenceHMRC reporting
The reference HMRC uses to identify employer PAYE payments. It is separate from the employer PAYE reference and must be recorded accurately in payroll.
Additional FPSAdditional Full Payment SubmissionHMRC reporting
An extra payroll report used in some correction situations. The maintained payroll route depends on what was wrong, the tax year and whether another payment is being made.
Agency workerPAYE and tax
A worker supplied through an agency or intermediary. The contractual arrangement must be checked to establish who is responsible for operating PAYE.
Annual leavePayroll records
Paid time away from work that must be recorded and reflected using the employer’s approved holiday-pay process.
Apprenticeship LevyHMRC reporting
A levy that can apply to employers above the relevant pay-bill threshold. It is reported through payroll but needs its own eligibility and calculation checks.
Attachment of earnings orderPAYE and tax
An official instruction requiring deductions from an employee’s pay for a court, authority or other body. The order’s priority and protected-earnings rules must be followed.
Auto-enrolmentAEPensions
The employer duty to assess eligible workers and enrol them into a workplace pension scheme when the applicable conditions are met. Learn more →
BPayroll terms
Back payPAYE and tax
Pay owed for an earlier period, such as an approved pay rise applied late. Retain the effective date, earned period and calculation evidence.
Bank release datePayroll records
The date an employer releases a payment instruction to its bank. It is not necessarily the contractual payday or the date funds reach the employee.
BACSPayroll records
A UK electronic payment method often used for salary payments. Bank release, bank acceptance and confirmed employee payment are separate controls.
Basic rate taxPAYE and tax
One of the Income Tax rates applied by maintained payroll software where the employee’s tax code and taxable pay require it.
Benefits in kindPAYE and tax
Non-cash benefits provided through employment, such as certain company cars or private medical cover. Their tax and reporting treatment depends on the benefit and arrangement.
Brought forward balancePayroll records
A controlled balance carried into a new period, for example an authorised recovery balance or continuing attachment order.
CPayroll terms
CISConstruction Industry SchemeHMRC reporting
A scheme for tax deductions from payments to construction subcontractors. It is a specialist workflow and is not simply ordinary employee PAYE.
Class 1 National InsuranceNational Insurance
National Insurance normally calculated through payroll on employee earnings, with employee and employer contributions where the maintained rules apply.
Collective pension schemePensions
A workplace pension arrangement with its own rules for membership, contributions and communications. Confirm how payroll should exchange information with the provider.
CommissionPAYE and tax
Variable pay linked to sales or another agreed measure. Payroll needs an approved source, earned period and clear calculation evidence.
ContractorPAYE and tax
A label for someone engaged to provide services. It does not decide tax status by itself; the actual working arrangement and PAYE responsibility must be checked.
Cut-off datePayroll records
The internal deadline for approved payroll inputs. It helps control a payroll run but does not automatically determine when pay can lawfully be deferred.

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DPayroll terms
Deduction from earnings orderDEOPAYE and tax
A type of official order requiring payroll deductions, often connected with a public authority. Keep the instruction, priority and payment evidence together.
DirectorPAYE and tax
A company office holder. A director who is paid through payroll can require specific payroll treatment, including the applicable National Insurance method.
DeductionsPAYE and tax
Amounts taken from an employee’s pay, such as PAYE, employee National Insurance, pensions, loans or authorised recoveries. Each deduction needs an applicable basis and destination.
EPayroll terms
Earnings periodPayroll records
The period in which work was done or pay was earned. It can differ from the payroll period and the date the employee is paid.
Eligible jobholderPensions
A worker who meets the relevant age and earnings conditions for automatic enrolment in the applicable pay reference period.
Employer National InsuranceNational Insurance
National Insurance payable by the employer where the maintained rules apply. It is an employer liability and does not reduce the employee’s net pay.
Employer PAYE referenceHMRC reporting
The reference HMRC gives an employer when a PAYE scheme is registered. It identifies the scheme in payroll reporting and records.
Employment AllowanceHMRC reporting
A relief that eligible employers may claim against employer National Insurance. Eligibility and the once-per-tax-year claim should be checked using current guidance.
Employment start datePayroll records
The agreed date employment begins. It is distinct from the date a starter record is received or the first date an employee is paid.
EPSEmployer Payment SummaryHMRC reporting
A report used for certain employer-level PAYE updates, including some recovery or no-payment situations. It is not sent automatically after every FPS. Learn more →
FPayroll terms
FPSFull Payment SubmissionHMRC reporting
The report employers normally send to HMRC on or before every payday. It contains pay, tax and National Insurance information for reportable employments. Learn more →
Full-time equivalentFTEPayroll records
A way of expressing a part-time role or workforce as the equivalent number of full-time roles. It is an HR measure, not a payroll pay calculation.
GPayroll terms
Gross payPAYE and tax
The approved pay total before employee deductions. It should be built from controlled salary, hours, variable-pay and statutory-payment inputs. Learn more →
HPayroll terms
HMRCHis Majesty’s Revenue and CustomsHMRC reporting
The UK government department that administers tax, PAYE reporting and related employer obligations.
Holiday payPAYE and tax
Pay for annual leave. The amount and calculation basis depend on the worker’s working pattern, pay and applicable employment rules.
Hours workedPayroll records
Approved time that may drive variable pay. Keep a reliable source, the earned period and the applicable rate with the payroll input.
IPayroll terms
Income TaxPAYE and tax
Tax deducted from employee pay through PAYE where required. Maintained payroll software applies the relevant instructions and tax rules.
Irregular payment indicatorHMRC reporting
An RTI indicator used where an employee is not paid regularly. Use the maintained payroll guidance and facts rather than setting it as a convenience.
JPayroll terms
Jobseeker’s AllowanceJSAPAYE and tax
A benefit that can be relevant to an employee’s PAYE starting information. Follow the current starter process and employer guidance.
LPayroll terms
Late reporting reasonHMRC reporting
Evidence explaining an FPS sent after payday in a permitted reporting situation. It is not a general permission to file late or to conceal an operational failure.
LeaverForms and documents
An employment that has ended. Final pay, leaving date, FPS reporting and P45 issue are related but may occur on different dates. Learn more →
Loan deductionPAYE and tax
A student or postgraduate loan deduction applied when a valid maintained instruction and the applicable payroll rules require it.
MPayroll terms
Maternity paySMPStatutory pay
Statutory Maternity Pay for eligible employees. Entitlement and recovery follow specialist rules and should be processed through maintained payroll software.
Minimum wagePAYE and tax
The legal minimum pay framework. Gross pay divided by recorded hours is not always a sufficient compliance test because pay and working time have specific rules.
NPayroll terms
National InsuranceNINational Insurance
Contributions connected with employee earnings and employment. Employee and employer National Insurance are separate amounts with different effects on payroll.
National Insurance category letterNational Insurance
The category maintained payroll software uses to apply the relevant National Insurance treatment. It must be supported by the correct employee evidence.
Net payPAYE and tax
The amount payable to the employee after defined employee deductions have been taken from the approved payroll result. Learn more →
Net pay arrangementPensions
A pension contribution method where the employee contribution is normally taken before Income Tax is calculated, subject to the scheme’s arrangements.
Non-eligible jobholderPensions
A worker in an automatic-enrolment category with rights that differ from an eligible jobholder. The employer must respond using the applicable rules.
Notice of codingForms and documents
An HMRC instruction that can update an employee’s tax code. Employers should apply valid maintained instructions rather than changing a code because an employee asks.
OPayroll terms
Overpayment recoveryPAYE and tax
The controlled process of recovering money previously paid in error. Establish the payroll correction, actual net balance, authority and deduction treatment separately.
OvertimePAYE and tax
Pay for approved work above the employee’s ordinary hours. Keep the authorised hours, rate and earned period so the amount can be reproduced.
PPayroll terms
P11DForms and documents
A form used in certain benefits and expenses reporting situations. It is a separate specialist year-end process, not a standard monthly payroll report.
P45Forms and documents
A leaving document with tax and pay information from a previous employment. A new employer uses it, where valid, as part of the starter process. Learn more →
P60Forms and documents
The year-end document employers give eligible employees showing required payroll information for the tax year.
PAYEPay As You EarnPAYE and tax
The HMRC system through which employers report pay and deduct Income Tax and National Insurance where required.
PAYE OnlineHMRC reporting
HMRC’s online service for employers and agents to view and manage aspects of a PAYE scheme.
PaydayPayroll records
The normal contractual date an employee is paid. It can be different from the bank release date and, in some cases, the date funds become available.
Pay frequencyPayroll records
How often an employee is paid, such as weekly, fortnightly or monthly. It informs the payroll calendar and relevant pay-period controls.
Payroll IDHMRC reporting
An identifier for an employment in payroll records and RTI reporting. Retain it where possible when payroll software or providers change.
Payroll periodPayroll records
The contractual period being processed by payroll. It is separate from the period work was earned and HMRC’s tax period.
Pensionable payPensions
The pay definition a pension scheme uses for contributions. It may differ from gross pay, taxable pay and National Insurance earnings.
Postgraduate loanPAYE and tax
A loan deduction type applied through payroll when the employer receives the relevant maintained instruction.
PostponementPensions
An optional deferral of automatic-enrolment duties for a permitted period. It does not remove worker rights and requires the correct notice and reassessment.
QPayroll terms
Qualifying earningsPensions
A statutory earnings band that can be used as the basis for minimum workplace-pension contributions. It is not automatically every scheme’s pensionable-pay definition.
RPayroll terms
Real Time InformationRTIHMRC reporting
HMRC’s system for employers to report payroll information electronically, normally through FPS and EPS submissions.
Recovery of statutory payHMRC reporting
An employer-level adjustment for eligible statutory payments. Use maintained year-to-date values and the applicable EPS process rather than manual estimates.
Relief at sourcePensions
A pension contribution method where the provider claims basic-rate tax relief and adds it to the pension pot, subject to the scheme’s rules.
SPayroll terms
Salary sacrificePensions
A contractual change where an employee agrees to reduce cash salary in return for a non-cash benefit, often pension contributions. It needs an effective agreement and correct payroll treatment.
Starter checklistForms and documents
HMRC’s form for collecting PAYE starting information when a new employee does not have a usable P45. The employee makes the declaration; payroll should not guess it. Learn more →
Statutory adoption paySAPStatutory pay
Statutory pay for eligible employees taking adoption leave. It has specific entitlement, evidence and reporting rules.
Statutory parental bereavement paySPBPStatutory pay
Statutory pay that may apply following the death of a child or qualifying event. Follow current specialist guidance for eligibility and processing.
Statutory paternity paySPPStatutory pay
Statutory pay for eligible employees taking paternity leave, subject to the current entitlement and payroll rules.
Statutory Sick PaySSPStatutory pay
Statutory pay that may be due when an eligible employee is off sick. Eligibility, waiting days and record keeping follow maintained rules.
Student loanPAYE and tax
A repayment deduction made through payroll when a valid HMRC instruction applies. It is separate from a postgraduate-loan deduction.
TPayroll terms
Tax codePAYE and tax
An instruction used by payroll software to apply Income Tax treatment to an employee’s pay. It should be supported by starter information or a valid HMRC notice.
Tax monthHMRC reporting
The HMRC tax-period cycle running from the 6th of one month to the 5th of the next. It is separate from an employer’s contractual pay period.
Tax yearHMRC reporting
The PAYE tax year running from 6 April to the following 5 April. Payroll year-end and new-year controls follow this cycle.
Taxable payPAYE and tax
The earnings figure on which Income Tax is calculated under maintained payroll rules. It can differ from gross pay and pensionable pay.
TimesheetPayroll records
A controlled record of time worked. Payroll should use approved timesheets, rotas or another reliable source rather than unverified entries.
UPayroll terms
Umbrella companyPAYE and tax
A company that may employ a worker and operate PAYE for assignments. The arrangement and responsibilities must be checked rather than assumed.
Unpaid leavePayroll records
Authorised time away from work without normal pay. Its payroll effect depends on the employment terms, period and approved record.
VPayroll terms
Variable payPayroll records
Pay that changes between periods, such as approved hours, overtime, commission or bonuses. Each input needs a source, approval and earned period.
WPayroll terms
Week 1 / Month 1W1 / M1PAYE and tax
A non-cumulative tax basis shown in a tax-code instruction. Apply and remove it only as the current maintained instruction requires.
YPayroll terms
Year to dateYTDPayroll records
Cumulative payroll values since the start of the relevant tax year. They are critical for reporting continuity, corrections and year end.

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