Employer Payment Summary (EPS)

Definition

The Employer Payment Summary (EPS) is a tax document used in the UK as part of the pay as you earn (PAYE) system.

What is an Employer Payment Summary?

An Employer Payment Summary is submitted by employers to HM Revenue and Customs (HMRC) to report additional details about their payroll, including adjustments to tax and statutory payments. 

The EPS contains various sections where employers can report different types of payments and deductions, including:

• Statutory payments: Such as sick pay, maternity pay, paternity pay, and adoption pay.
• Employment allowance: Employers can claim the employment allowance, a reduction in their employer National Insurance contributions, if they are eligible.
• CIS deductions suffered: Construction Industry Scheme contractors can report deductions suffered from payments made to subcontractors.

The EPS is typically submitted to HMRC on a monthly basis. However, employers only need to submit an EPS if they have certain types of adjustments or additional information to report. By submitting accurate EPS reports, employers ensure compliance with tax regulations and avoid penalties for incorrect or late submissions.

Employers are responsible for ensuring that their EPS reports are accurate and submitted on time to HMRC. Failure to submit EPS reports, or submitting incorrect information, may result in penalties or fines imposed by HMRC.

Example of an Employer Payment Summary (EPS)

ABC Company submits an Employer Payment Summary to HMRC for the month of March. In the EPS, ABC Company reports the following adjustments and details:

• Sick pay: ABC Company reports sick pay payments made to employees who were absent due to illness, totaling £500.

• Employment allowance claim: ABC Company claims the employment allowance for the month, totaling £100.
• CIS deductions suffered: ABC Company reports CIS deductions suffered from payments made to subcontractors for construction work, totaling £300.

ABC Company submits the EPS electronically through its PAYE software, ensuring that HMRC receives accurate and timely information about the company’s payroll adjustments.