PAYE72001 | PAYE operation: payments for PAYE purposes: introduction

The PAYE regulations set out how an employer who makes payments of PAYE income is required to deduct and account for the income tax due.

PAYE income consists of

• Employment income

• Pension income

• Social security income

This section of the Manual is concerned with the taxation of payments of PAYE income.

The Employer Further Guide to PAYE and NICs (booklet CWG2) also gives a detailed list of the kinds of payment that count as pay for PAYE purposes. It covers

• Payments made by cash or cheque

• Credits made to the employee’s bank or building society account

• Credits made to an account in the employer’s name but from which the employee can draw

• Amounts voted to a director and credited to an account from which the director can draw

• Some non-cash pay such as vouchers or credit tokens

• Payments in the form of readily convertible assets