Running payroll as a micro‑employer can feel like juggling while walking a tightrope — one missed deadline and HMRC will let you know about it. Over the years I’ve helped dozens of sole‑traders and tiny teams get payroll right without burning time or losing sleep. Below are the simple, practical checks I use with clients to avoid late filing and, crucially, late payment penalties.
Why simple checks matter
You don’t need a payroll team to be compliant — you need a consistent, repeatable process. Late payment penalties and interest add up quickly and are painful for businesses with tight cashflow. Small mistakes (wrong PAYE reference, forgetting an EPS, not transferring NI on time) are common, but also largely preventable with a short checklist and the right tools.
Daily and weekly checks
Make a habit of a few light checks more often than trying to remember everything at pay‑run time. These are quick and save bigger headaches later.
Check HMRC online for any messages or debt reminders — don’t assume you’ll get an email.Reconcile your payroll bank account weekly so you know how much sits ready for PAYE and NICs.Confirm employee starters and leavers are recorded (and that you submitted FPS for starters on or before first pay).Check student loan and attachment of earnings deductions for any staff changes.Pre‑payrun checklist (the day before you run payroll)
Run through this short list before you process pay: it stops last‑minute panics and missed items.
Confirm pay periods and pay dates in your payroll software (Xero Payroll, QuickBooks, Sage, or HMRC Basic PAYE Tools).Verify employee pay details: hours, rates, expenses, statutory pay (SSP/SMP), and any arrears or one‑offs.Ensure National Insurance category letters and student loan types are correct.Check statutory payments have been calculated correctly — if you pay SMP/SSP/SSP or furlough adjustments, confirm you’ve got the correct offsets or reclaim procedure.Create a payment summary so you know the total PAYE & employer NICs liability before you start the bank transfer.Filing checks at payrun
HMRC expects you to submit Real Time Information (RTI) returns on or before the employee’s paydate. Submitting late or not at all can lead to penalties.
Send a Full Payment Submission (FPS) on or before the pay date for all employees paid that period.If you don’t pay anyone in a period, submit an Employer Payment Summary (EPS) to zero‑rate the period — this avoids HMRC assuming you should have paid PAYE liabilities.Keep a copy (or PDF export) of every FPS/EPS confirmation from your software as proof of filing.Payment checks (how and when to transfer funds)
Paying HMRC on time is different from filing on time. Make sure both happen.
Check your PAYE payment reference (13 characters) — it must be used on your bank transfer or direct debit to ensure HMRC allocates your payment correctly.Allow banking lead time: Faster Payments can clear same day, CHAPS same day (higher cost), but BACS is typically three working days. If you use BACS, start the transfer early.Consider HMRC’s Budget Payment Plan (Direct Debit) for smoothing monthly or quarterly cashflow — it helps avoid missing a deadline.If cashflow is tight, call HMRC early to request a Time to Pay arrangement; they’re more likely to help if you approach them before a deadline is missed.Common payroll pitfalls that attract penalties
Being aware of typical errors is half the battle. These are the mistakes I see most often with micro‑employers:
Missing the FPS or submitting it late (this can trigger late filing penalties).Paying HMRC late or with the wrong reference (leads to interest and allocation problems).Forgetting to submit EPS when reclaiming statutory payments or furlough amounts.Using the wrong PAYE scheme reference after taking over payroll for a business — always check the reference on HMRC accounts.Not updating employee tax codes after receiving coding notices.Simple templates and tools I recommend
I prefer tools that keep the process visible and create automatic reminders. A few options that work well for micro‑employers:
Xero Payroll — good for integration with bookkeeping and clear reporting.QuickBooks Payroll — user friendly and solid HMRC submission features.Sage Business Cloud Payroll — robust if you need more detailed payroll controls.HMRC Basic PAYE Tools — free and compliant, though less user friendly for growing needs.Whichever system you use, create a simple in‑business checklist (paper or digital) and set calendar alerts for:
FPS/EPS deadlines (paydate)PAYE payment date (usually 22 or 19 of the following month depending on payment method)Quarterly pension re‑enrolment or auto‑enrolment staging checksQuick reference table: typical PAYE dates and actions
| Action | Deadline | Notes |
| Submit FPS | On or before employee paydate | Essential for RTI compliance |
| Submit EPS (if no employees paid) | On or before expected paydate | Prevents HMRC assuming you owe PAYE |
| Pay PAYE & NICs to HMRC | Usually 22nd (electronically) or 19th (bank transfer) of following month | Check HMRC guidance and your payment method |
| Annual Employer Payment Summary | Year end via final FPS | Confirm final values and P60s for employees |
What to do if you miss a payment or filing
If you realise you’ve missed a filing or payment, act quickly and calmly.
Submit the missing FPS/EPS immediately — filing penalties are based on how late the filing is, so speed reduces risk.Pay what you can straightaway and contact HMRC’s employer helpline if you cannot clear the full balance. Early contact makes a big difference when negotiating Time to Pay.Keep clear records of correspondence and any agreed payment plans — they’re useful if penalties or charges are later disputed.Final practical habit: a two‑step payroll PM
I recommend a two‑step payroll procedure that small businesses can copy:
Step 1: Before paydate — run payroll, submit FPS/EPS, export confirmation, and prepare bank transfer for the PAYE total.Step 2: After bank transfer — reconcile the payroll bank feed, check HMRC payment allocation after 48 hours, file any adjustments promptly.This routine takes about 30–60 minutes each pay period and massively reduces the chance of late payments or misfilings. If you want, I can send a printable checklist based on this — it’s the same one I give my micro‑employer clients.
