Payroll Legislation

How to Pay Your PAYE Settlement Agreement

Legislation

How to Pay Your PAYE Settlement Agreement

Due Date

22 October 2021

Summary

A PAYE Settlement Agreement (PSA) allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

Any electronic payments for a PSA for the tax year ended 5 April 2021 must clear into the HMRC bank account by 22 October 2021. If you pay late you may have to pay interest or a late payment penalty, or both.

To pay your PSA you will need to use the PSA reference number, for example, XA123456789012. If you do not have your PSA reference number, please contact the office dealing with your application for advice.

Do not use your PAYE Accounts Office reference (123PA12345678) to make your PSA payment, because payments received with your PAYE Accounts Office reference are allocated to your normal PAYE account and you will continue to receive reminders for the PSA even though you have paid.

PSA1 Form

HMRC wants to encourage the correct method of reporting which is form PSA1.

The online PSA1 form offers several benefits for employers:

  • Standardised reporting
  • Improved accuracy
  • Speedier processing times and fewer queries

Making payroll & HR easy