UK payroll jargon, translated

Updated June 2026 · Bookmark-worthy

UK payroll has a dialect all of its own — and if you're an overseas employer it can feel like a second language on top of a second language. Here's every term you'll actually meet, in plain English, plus the dates that matter.

The abbreviations, A–Z

Term	Stands for	In plain English
AE	Auto-Enrolment	The legal duty to enrol eligible staff into a workplace pension (minimum 3% employer / 8% total on qualifying earnings).
BACS	Bankers' Automated Clearing System	The standard UK bank-transfer system used to pay wages and HMRC.
BIK	Benefit in Kind	Non-cash perks (company car, private health cover) that may be taxable.
DCNI	Direct Collection (NI only)	A direct-payment scheme where only National Insurance is operated at source.
DPNI	Direct Payment (tax + NI)	The scheme that lets an overseas employer with no UK entity run compliant UK payroll. Full guide · we set these up.
EE / ER	Employee / Employer	Shorthand you'll see on payslips and pension statements — e.g. "ER pension" is the employer's contribution.
EOR	Employer of Record	A third party that legally employs staff on your behalf, for a premium fee. One of the three routes to UK payroll.
EPS	Employer Payment Summary	The RTI submission used for adjustments — reclaiming statutory pay, or telling HMRC nobody was paid.
FPS	Full Payment Submission	The RTI report sent to HMRC on or before every payday, showing who was paid what. RTI explained.
HMRC	His Majesty's Revenue & Customs	The UK tax authority — the body your payroll reports and pays to.
NI / NIC	National Insurance (Contributions)	A tax on earnings paid by both employee and employer. The employer's share — 15% above £5,000/yr — is the main hidden cost of a UK hire. Employer NI explained.
NINO	National Insurance Number	A worker's unique NI reference — needed before their first payslip.
PAYE	Pay As You Earn	The UK system for deducting Income Tax and NI from wages at source, every payday.
PEPM	Per Employee Per Month	A common payroll pricing model (ours is published on the pricing table).
P11D	—	The form reporting employees' benefits in kind to HMRC, due 6 July.
P32	—	The employer's monthly summary of PAYE/NI owed to HMRC.
P45	—	The leaver's document showing pay and tax to date — given when someone leaves a job.
P60	—	The year-end summary of pay and deductions each employee must receive by 31 May.
RTI	Real Time Information	HMRC's regime of reporting payroll on or before every payday, not annually. Full guide.
SMP / SPP / SSP	Statutory Maternity / Paternity / Sick Pay	Legal minimum payments run through payroll when staff are off for these reasons.
TPR	The Pensions Regulator	The body that polices auto-enrolment compliance.
UTR	Unique Taxpayer Reference	A 10-digit tax reference for a business or individual — needed for Self Assessment.
YTD	Year To Date	Cumulative pay/tax figures within the current tax year.

Terms that confuse everyone

Tax year — runs 6 April to 5 April, not the calendar year. Payroll resets each 6 April.
Tax month — runs from the 6th of one month to the 5th of the next (this is why HMRC payment deadlines look odd).
Tax code — tells payroll how much tax-free pay an employee gets (e.g. 1257L). Wrong codes are the #1 cause of "my tax looks wrong" queries.
Gross vs net pay — gross is before deductions; net is what lands in the employee's bank.
Qualifying earnings — the slice of pay used to calculate auto-enrolment pension contributions.
Employer's NI — not deducted from the employee: an extra cost on top of gross salary. Calculate the true cost of a hire.

The dates that matter

When	What
On or before payday	FPS due to HMRC (every single payday)
22nd of the month	PAYE/NI for the previous tax month due to HMRC (electronic; 19th by post)
6 April	New tax year — new rates and thresholds apply
31 May	P60s must be given to all employees
6 July	P11D / benefits returns due
31 January	Self Assessment online filing & payment deadline
Within 6 weeks of duties start	Eligible staff enrolled in a workplace pension (declaration to TPR within 5 months)

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Definitions are simplified for clarity and reflect our understanding as at June 2026. Rates and thresholds change — always confirm current figures on GOV.UK or ask us.