Pay As You Earn (PAYE)

Pay As You Earn (PAYE) is a system of collecting taxes payable by an employee by direct deduction from their pay.

Employees pay Schedule E income tax and the employer is responsible for deducting the tax due (in accordance with the employee's allocated tax code) and paying it to the Inland Revenue. Certain PAYE records must be kept by the employer for the benefit of the Inland Revenue.