Last updated: 14 October 2026
Can small businesses pay PAYE quarterly?
Yes. If you expect your average monthly payments to HMRC for PAYE, NIC, student loans and CIS deductions to be less than £1,500, you can choose to pay quarterly instead of monthly. Quarterly payments are due by the 22nd after the end of each quarter (19th by post): 22 July, 22 October, 22 January and 22 April. You still have to send Full Payment Submissions each time you pay employees, so only the payment is less frequent, not the reporting.
Monthly versus quarterly
| Feature | Monthly | Quarterly |
| Who can use it | All employers | Average monthly liability under £1,500 |
| Payment due (electronic) | 22nd of the following month | 22nd after quarter end |
| RTI reporting | Every payday | Every payday |
| Employment Allowance | Offset each month | Offset each quarter |
Quarter dates
| Quarter (tax months) | Covers | Payment due |
| 1 to 3 | 6 April to 5 July | 22 July |
| 4 to 6 | 6 July to 5 October | 22 October |
| 7 to 9 | 6 October to 5 January | 22 January |
| 10 to 12 | 6 January to 5 April | 22 April |
How to switch
Tell HMRC by calling the payment enquiry helpline. You can switch at the start of a quarter, and you should switch back to monthly if your average liability rises above £1,500. Your Accounts Office reference stays the same.
Spreading PAYE costs another way
If you’re struggling to pay, you can contact HMRC for a Time to Pay arrangement on PAYE arrears. This is separate from quarterly payments and may involve interest. Paying PAYE late regularly can lead to penalties of 1% to 4% of the late amount, depending on how many times you’re late in the year.
Example
Jo runs a café with 3 part-time staff. Her monthly PAYE and NIC average £1,100 after the Employment Allowance is used up. She switches to quarterly payments, paying about £3,300 on each quarter date. She keeps running payroll every 4 weeks and sends FPS submissions on time. This eases her cash flow and cuts admin.
Employment Allowance
In 2026/27, eligible employers can claim £10,500 off their employer NIC bill. Many small employers pay nothing until the allowance is used, which keeps average monthly liability low and makes quarterly payments easier to qualify for.
Penalties
- Late FPS: from £100 a month depending on employer size
- Late payment: 1% to 4% of the late amount, plus 5% for amounts unpaid after 6 and 12 months
- Interest on late payments at base rate plus 4%
Common mistakes
- Switching to quarterly but delaying FPS submissions
- Staying quarterly after liability rises
- Missing the 22 April payment at year end
- Paying to the wrong reference
Records to keep
Keep payroll reports for each pay period, FPS and EPS confirmations and payment receipts.
Frequently asked questions
Can I pay annually?
Only if you pay all employees once a year, such as some director-only companies, and HMRC agrees to an annual scheme.
Can CIS deductions be paid quarterly?
Yes, included in the same calculation.
Does the 22nd change at weekends?
Payment must clear by the last working day before.
Do I need to file an EPS?
If you claim Employment Allowance or have no payments due.
Related: Self Assessment payments on account, what RTI means and paying HMRC without internet banking.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with payroll and PAYE payments. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
