Pay as you earn in construction PAYE
The Pay as you Earn scheme, or more familiarly, PAYE, is the means by which HM Revenue and Customs (HMRC) deduct tax and National Insurance contributions from employees.
Any person, whether an individual or company, who employs someone under a contract of employment is obliged to operate a PAYE scheme and then deduct tax and national insurance before passing those deductions to HMRC.
It is important for potential employers to have a full understanding of these rules and to ensure that they are applied correctly. In particular it is necessary to understand the meaning of “employee” so that PAYE is applied only to those individuals who can be so categorised.
For construction industry employers the application of PAYE has added complexity as the requirements of IR 35 and the Construction Industry Scheme have a direct bearing on the applicability of PAYE in particular cases.
Administering PAYE can be a time-consuming process for employers with a variety of reporting requirements and deadlines to be met. For this reason many small employers prefer to outsource the administration of the scheme to external service providers who undertake full payroll and reporting obligations via the use of proprietary software.
For more details visit HMRC: PAYE
[edit] Related articles on Designing Buildings
- Capital gains tax.
- Construction industry scheme.
- Construction Industry Scheme or IR35?
- Construction recruitment agency.
- Court of appeal ruling on holiday pay and employment status.
- Employee.
- Hourly rate.
- Human resource management in construction.
- IR35.
- IR35: essential steps for compliance.
- Limited appointment.
- National insurance.
- Payroll companies.
- Status determination statement SDS.
- Tax relief.
- Umbrella companies.
- Tax.
- VAT.
[edit] External references
Featured articles and news
Construction industry reactions to the election result
ECA, CIAT and more to come as published.
At a Crossroads; Pathways to a Net Zero Future
Background to and summary of this key Renewable UK report.
Installing solar panels on listed structures.
The current and future global market dynamics of boilers
Significant challenges but adaptation to sustain for longer.
Designing sustainability and performance into buildings
Specifying and selecting sustainable resilient timber products.
Modifying wood to improve resistance to decay and movement.
A last minute, long look for built environment professionals.
The architecture of creative reuse. Book review.
Sustainable development global goals, history in progress?
"Unless we act now, the 2030 Agenda will become an epitaph for a world that might have been."
Mike Kagioglou FCIOB named CIOB President
'Sustainable Development Goals must be focus for construction'
BSRIA training; a look at what's on offer
From energy management to compliance training.
TESP video warns to beware of rogue trainers.
Highlighting the slippery tactics of non-approved providers.
New Building Safety Wiki launched
Boosting awareness and understanding of the new fire safety regime.
New playbook on AI in construction published by CIOB
How to get to grips with, and the best from AI.
Digital Construction Report NBS
BIM, cloud, off-site, immersive tech, AI, twins and sustainability.