What Is RTI in Payroll and How Does It Work?

This guide provides general payroll information and is not tax, legal or employment advice. Payroll requirements can vary according to your business and employees, and HMRC rules can change. Check current official guidance or seek appropriate professional advice where necessary.

RTI stands for Real Time Information. It is the way employers report payroll information to HMRC as employees are paid, rather than waiting until the end of the tax year. In most routine pay runs, this involves sending a Full Payment Submission through payroll software on or before payday.

RTI reporting covers information such as employee pay, Income Tax, National Insurance and relevant deductions. In certain circumstances, employers also use an Employer Payment Summary. Understanding when those two submissions apply makes RTI much easier to manage.

RTI at a glance

RTI is part of operating PAYE. It sits alongside calculating wages, approving payroll and paying employees rather than being a separate annual exercise.

The two reports employers will encounter are:

RTI submission	Main purpose	Typical timing
Full Payment Submission (FPS)	Reports employee pay and deductions	Each time employees are paid
Employer Payment Summary (EPS)	Reports specified adjustments, claims or periods with no employee payments	When the relevant circumstances apply

The FPS is the routine submission used when employees are paid, while an EPS is used when one of the relevant reporting circumstances applies.

What goes into a Full Payment Submission?

The FPS tells HMRC what happened when employees were paid.

Depending on the employee and pay run, the information can include:

• employee identifying details
• taxable pay
• Income Tax deducted or refunded
• National Insurance information
• student and postgraduate loan deductions
• tax codes
• pay frequency
• payment date
• starter information
• leaving information where applicable

HMRC’s guidance on reporting payroll information says employers operating PAYE should normally send the FPS on or before employees’ payday.

Payroll software generates the submission from the payroll data entered, so errors in employee details, pay or payment dates can carry into the report.

Where does RTI fit into a normal pay run?

RTI reporting should sit inside the normal payroll timetable, alongside calculation, approval and payment.

A typical cycle might look like this:

1. Payroll changes and employee information are collected.
2. Gross pay and deductions are calculated.
3. The payroll is reviewed and approved.
4. The FPS is submitted no later than the applicable payday.
5. Employees are paid according to the agreed payday and payment arrangements.
6. Any relevant EPS requirements are dealt with separately.
7. The employer pays the resulting PAYE liability to HMRC by the applicable deadline.

The sequence may differ according to the payroll setup. What matters is that the FPS meets HMRC’s applicable reporting deadline.

Treating RTI as part of the pay run also makes the submission easier to include in internal checks and approval processes.

When is an EPS needed?

An Employer Payment Summary has a different role from the FPS.

An EPS may be needed in circumstances including:

• reclaiming qualifying statutory payments
• claiming Employment Allowance
• reporting eligible Construction Industry Scheme deductions for a limited company
• reporting certain Apprenticeship Levy information
• telling HMRC that no employees were paid in a tax month

HMRC’s Employer Payment Summary guidance explains the circumstances in which an EPS is required.

Where an EPS is being used so HMRC can apply a reduction to the amount due, it normally needs to reach HMRC by the 19th of the following tax month.

An EPS is not an alternative version of the FPS. The correct submission depends on what has actually happened during the payroll period.

What happens if you do not pay anyone?

A business may have a tax month in which no employees receive pay.

In that situation, you should not send an FPS simply showing zero payments. An EPS is generally used to tell HMRC that no employees were paid during the tax month.

The EPS is normally due by the 19th following the relevant tax month.

If you expect not to pay anyone for a longer period, HMRC also allows an eligible period of inactivity to be reported in advance through an EPS for between one and 12 months.

Reporting this correctly matters because HMRC may otherwise estimate an amount it believes is due.

Why is the payment date important?

The payment date reported through RTI affects how HMRC records the payment within PAYE.

The payment date entered on the FPS needs to follow HMRC’s rules for the circumstances. For example, where a regular payday falls on a non-banking day and employees receive their money on the preceding or following working day, HMRC may require the normal contractual payday to remain as the payment date reported on the FPS.

The same issue can arise where:

• a normal payday changes
• employees are paid early
• payroll crosses from one tax month into another
• an additional payment is made
• an earlier submission needs correcting

HMRC’s guidance on what payroll information to report explains how payment dates should be handled in different circumstances.

Christmas payroll is a common example because employers may pay staff earlier than usual. We cover that separately in our guide to RTI reporting when employees are paid early at Christmas.

When a payment date changes, check the applicable HMRC rule rather than choosing the date based purely on when payroll was processed internally.

What if an RTI submission contains an error?

Discovering an error does not mean every submission should simply be resent in the same way.

The correct action depends on what is wrong, when the error is discovered and whether the problem relates to an FPS or EPS.

HMRC’s guidance on correcting FPS and EPS errors covers situations involving:

• incorrect pay or deductions
• an incorrect payment date
• starter or leaving information
• employee details
• National Insurance categories
• amounts reported through an EPS

For that reason, identify the actual error before making another submission.

If the issue has also affected the employer’s PAYE account, check what was reported through RTI as well as what was paid. Our guide to claiming an HMRC PAYE refund explains why payroll records, RTI submissions and payment records need to be compared when investigating an apparent overpayment.

Can late RTI reporting lead to penalties?

Sending an FPS late without a valid reason can result in an HMRC warning or penalty.

HMRC recognises specified circumstances in which reporting after payday is permitted, so the correct treatment depends on why the submission is late.

Where a submission genuinely qualifies for one of HMRC’s recognised late-reporting reasons, the appropriate reason should be recorded correctly. Those reasons should not be treated as a routine workaround for payroll processes that repeatedly miss the reporting deadline.

A practical control is to set payroll cut-offs early enough for inputs, calculations and approval to be completed before payday.

RTI reporting and paying HMRC are separate tasks

Sending an FPS or EPS does not itself pay the PAYE liability.

RTI reports what happened in payroll. The employer must still make any required payment to HMRC by the applicable payment deadline.

The reverse is also true.

Paying HMRC the correct amount does not repair an inaccurate or missing RTI submission. Where the payroll report itself is wrong, the reporting position needs to be corrected using the appropriate process.

Keeping reporting and payment as separate items on the payroll checklist can make discrepancies easier to trace.

What should be checked before an RTI submission?

Payroll software generates RTI submissions from the payroll information entered, so the quality of the report depends on the underlying records.

Before the payroll is finalised, useful checks can include:

• employee names and identifying details
• starter and leaver information
• pay rates and gross pay
• overtime and bonuses
• tax codes
• National Insurance categories
• student or postgraduate loan deductions
• statutory payments
• the relevant payment date
• year-to-date figures where payroll information has been transferred or corrected

These checks are particularly useful when changing payroll software or moving payroll from another provider because continuity of employee records and year-to-date information matters.

They are practical payroll controls rather than a substitute for following HMRC’s rules for the particular submission.

How we handle RTI within payroll

RTI submission should form part of the agreed payroll workflow rather than being treated as a separate task after payroll has been approved.

As part of our payroll services, we handle payroll processing and electronic submissions to HMRC. The information supplied for each payroll feeds into the calculations and reporting required for that pay cycle.

Your business still needs to provide accurate and timely information about matters such as starters, leavers, pay changes and variable payroll inputs within the agreed timetable.

If RTI reporting, payroll calculations and recurring deadlines are becoming difficult to manage internally, we can discuss how your existing payroll works and which parts of the process you need support with.

The key point about RTI

RTI is not a separate tax or an additional payroll deduction. It is the reporting system used to give HMRC payroll information as employees are paid.

For a routine pay run, the relevant report is generally the FPS. An EPS is used where particular adjustments, claims or periods without employee payments need to be reported.

For each pay period, check the underlying payroll information and make any FPS or EPS submission required for that period within HMRC’s applicable timetable. Including RTI in the payroll timetable makes the reporting deadline visible alongside payroll approval and payday.