Send EPS, reconcile and pay HMRC

When an Employer Payment Summary is needed

An FPS reports payments and deductions for individual employments. An EPS reports specified employer-level information that is not carried by the FPS. Begin with the full tax month, from the 6th to the following 5th, rather than looking only at one weekly or monthly payroll run.

Use payroll software to send an EPS when the employer needs to report supported statutory-payment recoveries, make an eligible Employment Allowance claim, reclaim CIS deductions suffered as a limited company or report Apprenticeship Levy information. Send an EPS instead of an FPS when nobody was paid during the whole tax month. HMRC explains the current EPS uses and deadline.

A no-pay month is a tax-month decision

Missing one weekly payday does not automatically create a no-payment EPS. If another employee was paid at any point during that same tax month, the employer did not have a complete no-pay tax month. Reconcile every payday before deciding.

If nobody was paid during the complete tax month, send the appropriate EPS by the 19th after that tax month. Without it, HMRC may expect a submission, estimate a liability or issue a notice. If the scheme will pay nobody for a longer period, HMRC allows an inactivity period of between one and twelve months to be reported. That is different from repeatedly treating each month as an isolated surprise.

Specialist reasons need specialist eligibility evidence

Employment Allowance is a once-per-tax-year claim subject to eligibility. CIS deductions suffered can be reclaimed through EPS only in the applicable limited-company circumstances. Apprenticeship Levy reporting depends on the employer’s pay bill and connected-employer rules. This lesson teaches the reporting and reconciliation control, not the underlying eligibility calculation. Use the relevant current specialist guidance and retain the decision.

Submit maintained EPS values

Populate each EPS field using the maintained current-period, year-to-date or declaration value required by HMRC’s current RTI specification. Do not convert period values into year-to-date values manually. Keep the field name, value basis and source reference together so a current-period figure cannot be substituted for a cumulative one.

For Riverside, the payroll software holds an accepted year-to-date statutory-payment recovery value. The current tax month changes that maintained value, so Maya compares the proposed EPS value to the prior accepted EPS and the current payroll evidence. She does not recreate the statutory calculation in a spreadsheet or submit only the current-month movement as though it were the year-to-date total.

Meet the reduction deadline

Send an EPS by the 19th after the tax month for HMRC to apply the reported reduction to that period. A corrected or late EPS may affect when HMRC reflects the adjustment. HMRC says the account may update within two days, or by the 14th when an EPS was sent before the 11th. Keep the submission timing and account-capture time beside any latency decision.

Preserve every attempt

Keep the scheme references, tax year, tax period, reporting reasons, year-to-date source references, submission timestamp, response and warnings. If HMRC rejects the EPS, preserve that attempt. Correct the underlying information and link the next submission to the rejected attempt. If an accepted EPS contains a warning, acceptance and warning review remain separate states.

How to reconcile and pay your PAYE bill

Use three separate evidenced snapshots. The payroll snapshot records the expected current-period liability. The accepted RTI snapshot records FPS charges and EPS reductions supported by HMRC responses. The HMRC account snapshot records the charge, credits, payments, balance, capture time and update state. Compare these ledgers; never add the three totals together.

The PAYE bill may include employee Income Tax, employee and employer National Insurance, student and postgraduate loan deductions, applicable CIS contractor deductions and Apprenticeship Levy. Supported EPS claims may reduce what is due. Keep pension-provider contributions, employee payments and employer-retained deductions outside this HMRC settlement unless their own official treatment says otherwise. Review what HMRC includes in an employer PAYE bill.

Reconcile charges and reductions separately

Do not net the EPS into the FPS before review. Show the FPS-derived charge, each accepted EPS reduction or credit, other evidenced adjustments and the resulting proposed payment. This lets a reviewer identify whether a difference arose from an employee report, an employer-level claim, a prior credit or payment allocation.

The HMRC account balance is not automatically the current-period liability. Keep prior-period balances, interest and penalties, known credits and unallocated payments separate. An unknown credit is not permission to reduce the next payment until its source and period are confirmed. A small unexplained difference remains visible even where policy permits payment; a correction or material unexplained difference blocks settlement.

Allow for HMRC processing time

HMRC says accepted EPS claims and the online-account balance can take time to update. PAYE Online can be used to check what is owed, payment history and notices. A temporary timing difference should remain visible with a review date; it should not force a duplicate submission or duplicate payment. If the account remains wrong after the expected update window, compare the payroll figures with accepted reports and use HMRC’s correction or PAYE-bill help route.

The board keeps the final allocation open even though payroll, accepted RTI and the payment amount agree. That is deliberate. A real period closes only when the employer has evidence appropriate to the payment and account state.

Derive the payment deadline

Monthly employers normally pay electronically by the 22nd after the tax month. A cheque through the post must reach HMRC by the 19th. If the deadline falls on a weekend or bank holiday, plan for the payment to reach HMRC within the official rule for the chosen method. Processing time varies: payment preparation must begin early enough for the method, rather than treating the date the instruction was created as the receipt date.

Some employers may arrange quarterly payment if they satisfy HMRC’s conditions. Store the verified schedule and HMRC arrangement reference. Quarterly payment changes when the accumulated liability is settled; it does not remove monthly payroll reporting. Do not switch merely because one month’s liability is small.

Use the Accounts Office reference correctly

For a normal on-time PAYE payment, use the employer’s 13-character Accounts Office reference. HMRC’s online payment service can construct the applicable reference. When making an early or late payment through a method covered by HMRC’s guidance, add the required four digits showing the tax year ending and the relevant tax month or quarter. Check HMRC’s early and late reference rules.

For example, a fictional early or late payment for tax month 3 of 2026/27 adds 2703 to the maintained 13-character Accounts Office reference. An on-time payment does not receive that suffix merely because the payroll system knows the tax period. Quarterly references use the quarter-ending month, so only months 3, 6, 9 and 12 are valid quarter endings.

Authorise the reconciled amount

Bind the payment instruction to the reconciliation, tax year, tax period, evidenced schedule and typed payment-reference result. Derive the statutory due date, the date funds must reach HMRC and the recommended initiation date from the payment method. Initiating an electronic payment by the deadline is insufficient if the method requires HMRC to receive it earlier. Separate preparation and authorisation where staffing permits. If the employer cannot pay on time, contact HMRC promptly.

Sent, received and allocated are different states

A bank instruction marked sent does not prove that HMRC received the payment. Receipt does not prove the payment was allocated to the intended PAYE period. Track prepared, authorised, sent, received, allocated, misallocated and failed states separately.

HMRC says the online account should normally update within six working days of payment. Wait for the appropriate processing window before assuming a missing update means failure. Do not send a duplicate payment merely because the online account has not changed immediately. Check the current payment-receipt guidance.

If the amount or reference was wrong, or HMRC allocated the payment to another period, keep the original payment evidence and the account view. Follow HMRC’s payment-correction route. A misallocated payment is not closed simply because the correct total left the bank.

CIS deductions withheld from subcontractors are potential charges due to HMRC. CIS deductions suffered by an eligible limited company are potential EPS reductions. They move in opposite directions and must never be netted merely because both contain “CIS.” Pension contributions and other third-party deductions have their own deadlines and evidence; they are not part of the HMRC PAYE settlement.

Build the settlement evidence pack

Retain the FPS and EPS acceptance evidence, warnings and corrections; internal liability schedule; HMRC account comparison; explanation of timing differences; authorised payment instruction; reference and deadline review; bank evidence; receipt and allocation evidence; and unresolved actions with owners. Payroll records are generally retained for three years from the end of the relevant tax year, while other employment, pension and minimum-wage records can have different requirements.

Three key takeaways

1. EPS is used for supported employer-level information, not as an automatic step after every FPS.
2. Reconcile payroll, accepted RTI and HMRC’s account independently before authorising payment.
3. Payment sent, received and allocated are different states, and normal on-time payments do not automatically need a period suffix.

What comes next

Continue to Lesson 11, Handle changes, leavers and corrections, for employee changes, final pay, P45s and the appropriate correction route.