Lets know first what does PAYE stand for?

The Pay As You Earn (PAYE) scheme is the system used in different countries to collect Income Tax and USC from employees’ pay.

Under PAYE, an employee’s tax and USC is deducted at source by their employer. The tax and USC are then paid over by the employer to Revenue.

Employers deduct tax and USC from their employees’ gross pay before they pay it to them. Employers then send the amounts deducted to Revenue. This is called Pay Related Social Insurance (PRSI) contributions, if they are employees of the State or Department of Defence. If they are not, it is called Universal Social Charge (USC).

The Pay-As-You-Earn (PAYE) system is a method of collecting income tax from employees who are not self-employed and whose employer deducts their tax from their pay.

The PAYE system was introduced in 1944 as a simple, effective means for employers to collect income tax from employees without the need for lengthy tax returns. It’s now used throughout the UK by millions of employees.

If you’re an employee paid through the PAYE system, your employer deducts income tax from your wages or salary before paying you. They also deduct national insurance contributions (NICs), which fund state benefits such as free healthcare (the NHS), unemployment benefit and a state pension when you retire.

Your employer deducts these amounts on behalf of HM Revenue & Customs (HMRC).

The PAYE (Pay As You Earn) is a method of paying Income Tax and National Insurance Contributions (NICs) through your pay.

The PAYE system depends on employers making deductions from their employees’ wages.

There are two types of PAYE scheme:

PAYE (for employees)

CIS (Construction Industry Scheme)

The Pay As You Earn (PAYE) system is a method for calculating and collecting income tax from employees. It works through employers deducting tax from employees’ wages and salaries before they are paid.

The PAYE system is operated by HM Revenue and Customs (HMRC). If you have an employee working for you, you must operate the PAYE system. This means that you will need to:

• Deduct Income Tax from their pay
• Deduct National Insurance contributions from their pay
• Send these deductions to HMRC
• Give your employees a payslip each time you pay them 

Pay As You Earn (PAYE) is a way of paying Income Tax and National Insurance contributions. Your employer deducts PAYE from your wages or pension before paying you.

You usually pay tax and National Insurance through PAYE if you’re an employee, for example if you get wages or a salary.

Most other people who get income from the UK, for example landlords, have to file a Self Assessment tax return to report it and pay any tax they owe.You can only get money back through PAYE if you’ve paid too much tax.