With payroll year end just around the corner, many businesses will be finalising their payroll records before the end of the tax year. Payroll year end is an important process to ensure that employee pay, tax deductions and statutory reporting are accurate. Completing it correctly also ensures that businesses remain compliant with the requirements that HMRC set out.
In this guide, we will explain what payroll year end is, the key deadlines to be aware of, and the steps businesses should take to complete the process smoothly using software such as Sage.
What is Payroll Year End?
Payroll year end refers to the final payroll process at the end of the UK tax year, which runs from 6th April to 5th April the following year. Once the final pay run has been completed, employers must submit their final payroll reports to HMRC and issue employee tax documents.
The purpose of payroll year end is to:
- Confirm total pay and deductions for each employee
- Ensure tax and National Insurance calculations are correct
- Submit the final payroll reports to HMRC
- Provide employees with a P60, summarising their pay and tax for the year
Payroll software such as Sage 50 payroll helps simplify the process by automating most of these tasks. However, it is still the responsibility of the employer to ensure the data is accurate before the final submission.
Important Payroll Year End Dates
Understanding the key payroll deadlines is essential in order to prevent penalties or late submissions. The following dates remain the same each year, so keep a note of them.
| Date | What It Means |
| 5 April | Final day of the UK tax year |
| 6 April | First day of the new tax year |
| 19 April | Deadline to submit final payroll reports to HMRC |
| 31 May | Deadline to give employees their P60 |
How to Complete Payroll Year End Smoothly
1. Check your payroll period
If your business pays employees weekly, there is sometimes an odd occasion where the calendar falls in a way that there are 53 weekly paydays in the tax year. If this is the case, the extra payroll should be processed as the final pay run of the year before completing year end. Checking this early prevents any errors in tax calculations or reporting.
2 Review employee records
Accurate employee information is key before submitting your final payroll reports. The following details should be reviewed for each employee:
- Tax codes
- National insurance numbers
- Total taxable pay
- Statutory payments (maternity / sick pay)
- Student loan deductions
- Pension contributions
3. Process your final pay run
The next stage is to run the final payroll of the tax year. This pay run should be processed as normal, but must include all payments and deductions due before the 5th April. These may include salaries, wages, bonuses, commissions, overtime payments, statutory pay, and holiday pay.
Once the final pay run has been processed, the payroll software will automatically generate the correct submissions to HMRC, including the Full Payment Submission (FPS).
4. Submit your final payroll reports
At the end of the tax year, employers must confirm that the payroll information submitted through the year end is complete, which is typically done through:
- Final Full Payment Submission (FPS)
- Employer Payment Summary (EPS) where required
These reports confirm the total pay, tax and National Insurance contributions for all employees during the year. The final submission then must be sent to HMRC by 19th April following the end of the tax year.
5. Generate and distribute P60 forms
One of the most important outputs of the payroll year end is the P60. This summarises each employee’s total pay for the tax year, income tax paid, and national insurance contributions.
Employers must provide P60 forms to employees by the 31st May following the end of the tax year. Most payroll software allows employers to distribute P60s digitally for employees.
6. Prepare for the new tax year
Once the year end process is complete, it isn’t time to forget about it all until the next year. Preparation is key, and there are a few things to help for the new tax year:
- Update payroll software to the latest version
- Applying new tax codes issued by HMRC
- Checking changes to tax thresholds
- Setting up the new payroll calendar
How Payroll Software Helps
Modern payroll software such as Sage can help automate lots of the administrative tasks involved in year end. The main benefits of using payroll software are:
- Automatic HMRC submissions
- Built-in compliance checks
- Automated tax & NI calculations
- Digital employee documents e.g. P60s
- Year end reporting and payroll summaries
By automating these tasks, payroll software reduces the risk of manual errors and ensures that businesses stay compliant with the UK payroll legislation. With the right systems in place, payroll year end becomes less about stress and more about ensuring accurate financial records.
*This article contains general information in order to assist all of our customers and is meant for guidance only – there are no guarantees that the information we provide will be suitable for your particular needs. If you require specific assistance, we recommend that you seek professional guidance on your individual circumstances. Reality Solutions are in no way responsible for any loss or damage arising from any information contained within our articles.
