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For employees · Setting money aside

How much should I put aside on a direct payment scheme?

14 October 2026 · For employees on a direct scheme

Your salary arrives with no UK income tax taken off it. On a direct payment scheme that's how it's meant to work, and it's also how people end up spending money that was never theirs. We won't give you a figure, because yours depends on your pay, your tax code and your scheme. We'll give you the method instead, so the figure is yours and stays right.

The short version. Every payday, work out the tax and National Insurance due on that pay, move it to a separate account the same day, and leave it there until the payment to HMRC goes. Run the sum again whenever your pay or your tax code changes.

First, what you're holding it for

Your scheme decides what you hold back and for how long. If you aren't sure which one you have, ask whoever set it up.

On a DPNI

The employee sets up a DPNI and pays both their income tax and their employee National Insurance to HMRC under one PAYE reference. The tax and National Insurance due on the scheme are paid every quarter, within 14 days after the end of each tax quarter. So you hold back both, a quarter at a time.

On a DCNI

A DCNI collects only employee National Insurance, every quarter, and any income tax due goes through Self Assessment. So your pot splits in two. The National Insurance goes each quarter, and the income tax waits for a Self Assessment bill paid by 31 January after the tax year ends. If you make payments on account, there's a second payment date of 31 July.

The first year needs more. GOV.UK says that if you didn't make payments on account last year, you'll need to pay both the full amount of your tax calculation and your first payment on account towards your next bill. Our page on Self Assessment on a direct scheme covers the return.

On a tax-only scheme

This one carries income tax only, with no National Insurance on it. The income tax due on the scheme is paid every quarter, within 14 days after the end of each tax quarter.

The tax quarters run from 6 April to 5 July, 6 July to 5 October, 6 October to 5 January and 6 January to 5 April. Paid monthly, that's three paydays in each.

The method, in four steps

  1. Find your tax code. GOV.UK's Check your Income Tax service shows your Personal Allowance and tax code, and how much you're likely to pay for the rest of the year. If the code looks wrong, get it fixed first.
  2. Run the year through the calculator. Put your yearly salary and tax code into the take-home tab of our salary calculator. It shows income tax and employee National Insurance as separate lines. Add up the ones your scheme carries and divide by the number of paydays in the year.
  3. Move it on payday. The day your salary lands, move that amount into an account you use for nothing else. Leaving it in your current account and remembering it's spoken for is the version that goes wrong.
  4. Pay the quarter from that account, not from this month's salary.

When to run the sum again

A yearly figure divided by twelve is only right while nothing changes. Run it again when your pay goes up, when a bonus or commission is paid, and when your tax code changes. On a DPNI or a tax-only scheme the tax is worked out according to your tax code, so a new code changes the figure.

It can move in your favour too. Where a new code gives you more allowance and the amount involved is small, HMRC's manual says the usual step is a smaller next quarterly payment.

Where the calculator stops

Our calculator uses the rates for England, Wales and Northern Ireland, and GOV.UK says income tax bands are different if you live in Scotland. Even outside Scotland it's an estimate. What you owe is the total worked out on the scheme, so once the scheme's own figures are produced each payday, hold back exactly what they show. The rates behind the calculator are on our 2026/27 rates page.

An illustration

A wine producer in Montevideo with no UK address employs a sales representative in Lincoln. Her tax and National Insurance run through a DPNI, and she's paid at the end of each month.

She checks her tax code online, runs her salary through the calculator, adds the two lines and divides by twelve. That amount moves to a savings account every payday. The quarter from 6 October to 5 January holds three of her paydays, so the money is there when the payment falls due. In December she's paid a commission, so she runs the year again with it included and moves the extra across that day. It happens on payday, not when the bill arrives.

Would you rather someone else did the sums?

If we run your DPNI, it works like this. The company pays your salary, we work out your income tax and National Insurance each payday, and you pay that to HMRC.

Not on a scheme yet? We'll ask HMRC for the scheme that fits your facts, and once they have the full facts they may suggest a different one.

See how direct scheme setup works

Or ask us a question →

Common questions

How much should I set aside on a DPNI?

The income tax and employee National Insurance due on each payday's pay, worked out from your salary and tax code, and kept in a separate account until the quarter's payment goes to HMRC.

When is the money paid to HMRC on a DPNI?

The tax and National Insurance due on the scheme are paid every quarter, within 14 days after the end of each tax quarter. The tax quarters end on 5 July, 5 October, 5 January and 5 April.

Is it different on a DCNI?

Yes. A DCNI collects only employee National Insurance, every quarter, and any income tax due goes through Self Assessment. Hold the income tax back too, for a bill paid by 31 January after the tax year ends. If you make payments on account, there's a second payment date of 31 July.

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General information for employees on a direct payment scheme, not tax advice. It reflects HMRC and GOV.UK guidance as published in October 2026, which can change. Please check your own position before acting.