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Payrolling your tax employee’s benefits and expenses makes it easier for employees to see they're paying the right amount of tax. It’s also easier for you as an employer as you will not have to send in form P11D for the payrolled benefits.

You can payroll all benefits except:

• employer provided living accommodation
• interest free and low interest (beneficial) loans

For more information, see:

Payrolling: tax employees' benefits and expenses through your payroll

If you decide to payroll benefits and expenses, you must register them with HMRC using the payrolling employees taxable benefits and expenses service before the start of the tax year on the 6th April.

During the process you must tell HMRC which benefits you want to payroll.

Once you register, the tax codes for all employees receiving these benefits will be amended, unless you exclude the employee from payrolling benefits in the online service.

If you miss the registration deadline, you cannot payroll benefits until the following tax year and you must still complete form P11D at the end of the tax year.

Payrolling benefits and expenses online service

You’ll still need to work out the Class 1A National Insurance contributions on the cash equivalent and fill in form P11D(b).

For more information, see:

Class 1A National Insurance contributions