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
Buildings that changed the future of architecture. Book review.
The Sustainability Pathfinder© Handbook
Built environment agency launches free Pathfinder© tool to help businesses progress sustainability strategies.
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
Inspiration for a new 2026 wave of Irish construction professionals.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.