Employer Payment Summary: everything you need to know about EPS payroll

It is important that every small business owner understands what is expected of them by HMRC – and when you put your first employees on payroll, it is crucial to understand the additional forms that must be submitted.

One of the essential forms is called an Employer Payment Summary (EPS), which employers must submit to HMRC if they pay employees via a Pay As You Earn (PAYE) payroll system. 

This guide will look at everything you need to know about the EPS process, including what the form is, what employers need to include within it and how to go about submitting it correctly and on time to HMRC. 

What is EPS?

An Employer Payment Summary – or EPS – is an essential form that UK employers must submit to HMRC as part of the Real Time Information (RTI) system. This system is a government programme that strives to improve how employers share PAYE information about their employees with HMRC. 

UK employers can use an EPS to share information about their employees’ income tax, National Insurance contributions and statutory payments – examples of the latter include maternity pay, paternity pay and shared parental pay. 

Employers can also use an EPS form to claim Employment Allowance, which reduces an employers’ National Insurance contributions. EPS is important for employers so they are able to reclaim or refund some liabilities from the HMRC regarding the employee payroll. Employers can also claim allowances and deductions from the HMRC through this.

The form is different from the Full Payment Submission (FPS), which is the report sent to HMRC about payments and deductions made to employees every time they are paid. Instead, an EPS only needs to be submitted in certain scenarios – but it’s important to do so by the monthly deadline when it is applicable.

These instances include:

• If you pay Apprenticeship Levy
• To reclaim statutory payments, like Statutory Maternity Pay or Shared Parental Pay
• To claim Construction Industry Scheme (CIS) deductions if applicable and employee allowance
• If employees haven’t been paid within the tax month
• If you’re not operating your business for an extended period of time – this is applicable to seasonal businesses, for example – or if you’re no longer an employer
• To ​​indicate you’re making your final submission for the tax year

HMRC then uses the information from your EPS to check employers are paying the right sums of tax and other contributions on behalf of their staff.

How do I submit an EPS?

There are a few ways you can submit your EPS, and the best method for you is an individual choice for each business. The methods to choose from are:

• Via a payment software: Payroll software that is compatible with HMRC’s RTI system can generate and submit an EPS form electronically. This is generally the most popular method for businesses.
• HMRC’s Basic PAYE Tools (BPT): Small businesses with a maximum of nine employees can use this tool to submit their EPS form online.
• Through an agent or payroll company: Employers can outsource support for submitting the EPS form to a qualified third party, who will complete and send it on your behalf.

Remember, it’s important to double-check all information included on an EPS before sending it over to HMRC.

When should I submit an EPS?

It’s important you complete your EPS submission at the right time. A tax month in the UK starts on the 6th of the month and runs to the 5th of the following month. 

Employers should submit their EPS by the 19th of the following tax month at the latest. If you wanted to submit an EPS for September, for example, the window is open from the 20th of September until the 19th of October. 

If you submit the form after this date, this means you wouldn’t be able to claim or reclaim any statutory payments, or be credited for any statutory pay. It also means you have to pay the full amount and PAYE liability owed. 

But don’t panic – when a late EPS form is submitted, HMRC will credit you in the following tax month instead.

What happens after the EPS is sent to HMRC?

Congratulations, you’ve submitted your EPS form – so, what now? If your EPS has been received by HMRC, you will see ‘Accepted’ in the status field on your account along with a time and date for when it was sent and accepted. You will also receive a confirmation email from HMRC – make sure you keep this safe.

Sending the EPS means you can confirm how much you’ve claimed and check how much you owe via your HMRC account. Be sure to confirm this within two days, or by the 14th of the month if you sent your EPS before the 11th.

And don’t forget – make sure to pay HMRC by the 22nd of the month.

What are the common mistakes made with an EPS?

With most small business owners juggling multiple responsibilities, it can be easy to make a mistake on forms that are asking for complicated information.  Here are a few common errors made when submitting an EPS form to keep in mind when completing yours:

• Incomplete or inaccurate details and data
• Failing to submit an EPS when the form is needed
• Missing the submission deadline for the tax month denoted
• Not keeping an extra copy of the completed EPS form for future reference or auditing.

Final thoughts

While HMRC obligations like EPS forms can feel overwhelming, they become quicker and easier to complete with the right research, practice and support.  We’ve got expert guides on  how to pay your employees and how to find the right payroll provider for your small business.

Kirstie Pickering - business journalist

Kirstie is a freelance journalist writing in the tech, startup and business spaces for publications including Sifted, TNW, UKTN, The Business Magazine and Maddyness UK. She also works closely with agencies such as CEW Communications to develop content for their startup and scaleup clients.