RTI PAYE: What Is Real Time Information and How to Get Ready
As a UK employer, you are legally required to report employee payments and deductions to HMRC through Real Time Information (RTI) — the modernised version of the PAYE (Pay As You Earn) system.
Introduced by HMRC to improve accuracy and transparency in payroll reporting, RTI requires that every time you pay your staff, you also send payroll information electronically. If your business employs staff — even part-time, casual, or on a director-only basis — understanding RTI PAYE is essential to stay compliant and avoid penalties.
This guide from Persona Finance explains what RTI is, how to prepare, the software you need, and how our payroll specialists can ensure your business remains fully compliant.
What Is RTI PAYE?
RTI (Real Time Information) is an HMRC system that requires employers to submit payroll information every time employees are paid, rather than at the end of the tax year.
The system links to PAYE (Pay As You Earn), meaning income tax and National Insurance contributions are reported and collected in real time.
This process ensures HMRC always has an accurate record of your payroll data — reducing errors and helping employees receive the correct tax deductions.
What does RTI mean for employers? RTI means that employers must use digital payroll software to send data about employee pay, tax, and deductions to HMRC every time they run payroll — not just annually.
Who Must Use RTI?
All employers operating PAYE schemes are required to report via RTI. That includes:
Limited companies and partnerships.
Sole traders with employees.
Charities and not-for-profit organisations.
Employers of casual, temporary, or part-time workers.
If you are running payroll — even for just one employee or director — you must comply with RTI.
Does RTI apply to small businesses? Yes. Every employer, regardless of size, must submit RTI payroll data to HMRC through approved payroll software.
How RTI Payroll Reporting Works
RTI submissions occur every time you pay an employee. There are three main types of submissions that HMRC recognises:
Full Payment Submission (FPS): Sent each time employees are paid. It includes employee details, gross pay, tax, and National Insurance deductions.
Employer Payment Summary (EPS): Used to report adjustments such as statutory payments, CIS deductions, or recovery amounts.
Final Submission: Sent at the end of the tax year or when you cease employing staff under that PAYE scheme.
Once submitted, HMRC uses the data to update tax records, ensuring your employees’ contributions and entitlements are correct.
How often do I need to report RTI PAYE? You must submit an FPS every time you make a payment to employees — whether weekly, fortnightly, or monthly.
RTI Software and Record-Keeping Requirements
To comply with RTI, you must use HMRC-recognised payroll software that can automatically send submissions to HMRC. Examples include Sage, Xero, QuickBooks, and BrightPay. Employers must maintain digital records containing:
Employee personal information (full name, NI number, date of birth).
Payment frequency and gross salary.
Tax codes and deductions.
Benefits, pension contributions, and reimbursements.
If you manage payroll manually or through outdated systems, you risk delays, submission errors, and penalties.
Can I use spreadsheets for RTI? No, not on their own. Spreadsheets are not compliant unless linked to HMRC via approved bridging software. Using dedicated payroll software is strongly recommended.
Benefits and Challenges of RTI for Employers
Benefits:
Accurate and up-to-date tax records — HMRC receives information in real time.
Faster issue resolution — tax code errors can be corrected quickly.
Simplified year-end process — fewer reconciliations and manual forms.
Improved transparency — employees see accurate deductions on payslips.
Challenges:
More frequent reporting — requires organised payroll scheduling.
Software setup — may involve initial training or migration.
Penalties for errors or delays — even minor mistakes can trigger HMRC fines.
What happens if I miss an RTI submission? HMRC may charge late filing penalties depending on how many employees are affected and how frequently submissions are missed.
Common RTI Mistakes and How to Avoid Them
Even experienced payroll teams can encounter RTI issues. Here are the most common errors and how to avoid them:
Late FPS submissions: Always schedule payroll in advance and automate reporting.
Incorrect employee details: Double-check NI numbers and addresses.
Missing starters or leavers: Update records immediately when staff join or leave.
Incorrect payment dates: Ensure reporting reflects the actual pay date.
Tip: Keep payroll software updated and conduct monthly reconciliations. Persona Finance can manage this for you to ensure complete compliance.
How Persona Finance Can Help
Complying with RTI requirements can be challenging, especially for small businesses without in-house payroll teams. That is where Persona Finance comes in. Our payroll specialists handle every aspect of your RTI compliance, including:
Setting up HMRC-approved payroll software.
Running payroll and submitting FPS/EPS reports accurately and on time.
Managing employee records, tax codes, and pension contributions.
Providing detailed reports and end-of-year summaries.
Handling communication with HMRC on your behalf.
We ensure that your payroll process is efficient, accurate, and fully compliant — so you can focus on growing your business.
👉 Contact us today to simplify your RTI PAYE obligations with professional support.
Frequently Asked Questions
What is RTI PAYE in simple terms? It is a payroll reporting system where employers send HMRC information about employee pay and tax deductions every time staff are paid.
When should I submit an RTI return? On or before the date employees are paid.
What is an FPS in RTI? A Full Payment Submission — a digital report containing details of each employee’s pay and deductions.
What if I pay staff irregularly? You still need to report payroll through RTI whenever payments are made, even if they are irregular.
Do I still need to file a P60 or P45? Yes, those forms still exist, but RTI has simplified how data is shared with HMRC.
Does RTI apply to directors’ payroll? Yes. Director salaries and bonuses must also be reported via RTI.
Final Thoughts
RTI PAYE is not just a compliance obligation — it is part of a more efficient, transparent payroll system that benefits employers and employees alike.
By adopting the right software and maintaining accurate records, businesses can ensure smooth submissions, avoid penalties, and improve overall payroll management.
Persona Finance helps businesses of all sizes stay compliant with RTI regulations through expert payroll management, digital software setup, and ongoing advisory support.
Start simplifying your payroll reporting today with Persona Finance — your trusted partner for RTI PAYE compliance.