Pay as you earn in construction PAYE
The Pay as you Earn scheme, or more familiarly, PAYE, is the means by which HM Revenue and Customs (HMRC) deduct tax and National Insurance contributions from employees.
Any person, whether an individual or company, who employs someone under a contract of employment is obliged to operate a PAYE scheme and then deduct tax and national insurance before passing those deductions to HMRC.
It is important for potential employers to have a full understanding of these rules and to ensure that they are applied correctly. In particular it is necessary to understand the meaning of “employee” so that PAYE is applied only to those individuals who can be so categorised.
For construction industry employers the application of PAYE has added complexity as the requirements of IR 35 and the Construction Industry Scheme have a direct bearing on the applicability of PAYE in particular cases.
Administering PAYE can be a time-consuming process for employers with a variety of reporting requirements and deadlines to be met. For this reason many small employers prefer to outsource the administration of the scheme to external service providers who undertake full payroll and reporting obligations via the use of proprietary software.
For more details visit HMRC: PAYE
[edit] Related articles on Designing Buildings
- Capital gains tax.
- Construction industry scheme.
- Construction Industry Scheme or IR35?
- Construction recruitment agency.
- Court of appeal ruling on holiday pay and employment status.
- Employee.
- Hourly rate.
- Human resource management in construction.
- IR35.
- IR35: essential steps for compliance.
- Limited appointment.
- National insurance.
- Payroll companies.
- Status determination statement SDS.
- Tax relief.
- Umbrella companies.
- Tax.
- VAT.
[edit] External references
Featured articles and news
Apprenticeships and the responsibility we share
Perspectives from the CIOB President as National Apprentice Week comes to a close.
The first line of defence against rain, wind and snow.
Building Safety recap January, 2026
What we missed at the end of last year, and at the start of this...
National Apprenticeship Week 2026, 9-15 Feb
Shining a light on the positive impacts for businesses, their apprentices and the wider economy alike.
Applications and benefits of acoustic flooring
From commercial to retail.
From solid to sprung and ribbed to raised.
Strengthening industry collaboration in Hong Kong
Hong Kong Institute of Construction and The Chartered Institute of Building sign Memorandum of Understanding.
A detailed description from the experts at Cornish Lime.
IHBC planning for growth with corporate plan development
Grow with the Institute by volunteering and CP25 consultation.
Connecting ambition and action for designers and specifiers.
Electrical skills gap deepens as apprenticeship starts fall despite surging demand says ECA.
Built environment bodies deepen joint action on EDI
B.E.Inclusive initiative agree next phase of joint equity, diversity and inclusion (EDI) action plan.
Recognising culture as key to sustainable economic growth
Creative UK Provocation paper: Culture as Growth Infrastructure.
Futurebuild and UK Construction Week London Unite
Creating the UK’s Built Environment Super Event and over 25 other key partnerships.
Welsh and Scottish 2026 elections
Manifestos for the built environment for upcoming same May day elections.
Advancing BIM education with a competency framework
“We don’t need people who can just draw in 3D. We need people who can think in data.”