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A system where Income Tax and National Insurance are deducted from your pay before you receive it.
PAYE (Pay As You Earn) is how most employees pay UK Income Tax and National Insurance. Your employer or pension provider deducts the correct amount from your pay or pension before you receive it, using a tax code provided by HMRC. This means the right amount of tax is collected automatically throughout the year.
This definition is for informational purposes only and does not constitute tax, legal, or financial advice. Rules may change and outcomes depend on your circumstances.
These GOV.UK and HMRC sources provide the official context for this glossary entry. The definition is educational and does not determine your individual tax position.