Payroll Glossary
These terms appear throughout Zoho Payroll and this help. Each definition is to help you understand the terms, with a short note on how it is used in the product.
For an overview of the product, see What is Zoho Payroll?.
Tax, National Insurance, and HMRC
HMRC
HM Revenue and Customs is the UK tax authority. Employers report pay, Income Tax, and National Insurance to HMRC each time they pay employees.
In Zoho Payroll, you store your HMRC employer references in Tax and National Insurance, then submit RTI reports from Pay Runs and Forms & Filing.
PAYE
PAYE stands for Pay As You Earn. It is how Income Tax is taken from an employee’s pay before they receive it, instead of the employee paying a lump sum later.
HMRC issues a tax code for each employee. Payroll uses that code, and the employee’s earnings, to work out how much tax to deduct in the pay run.
In Zoho Payroll, PAYE is calculated automatically from the employee’s tax details and your organisation’s tax settings.
Tax code
A tax code (for example 1257L) tells payroll how much tax-free pay an employee is allowed in the tax year, and therefore how much Income Tax to deduct.
You enter the tax code on the employee’s tax details. If HMRC issues a new code, update it before the next pay run so tax is deducted correctly. Learn more in Add Employees.
National Insurance (NI)
National Insurance is a contribution paid on earnings, by both the employee and the employer. The amounts depend on how much the employee earns and which NI category they are in.
In Zoho Payroll, employee NI is deducted from pay and employer NI is calculated as a cost for your organisation. Both appear in the pay run and in reports such as the National Insurance Contributions Report.
NI category
An NI category is a letter (for example A, J, or C) that sets which National Insurance rates apply to an employee. Most employees are category A. Other letters apply in specific cases, such as employees who have deferred NI or who are over State Pension age.
You record the category on the employee’s tax details. Zoho Payroll uses it when it calculates NI in each pay run.
Tax year
The UK tax year runs from 6 April to 5 April, not from 1 January to 31 December. Year-to-date pay, tax, and National Insurance usually follow this year.
If you join Zoho Payroll part-way through a tax year, record payments you already made so year-to-date figures stay correct. See Configure Prior Payroll.
YTD (year to date)
Year to date means totals from the start of the current tax year up to now: pay, tax, National Insurance, and similar amounts.
Payslips and reports often show both the current pay run and the YTD figure. Accurate YTD values matter for tax, NI, and year-end documents such as the P60.
Prior payroll
Prior payroll is pay you already processed outside Zoho Payroll earlier in the same tax year, for example with another provider.
You record those year-to-date figures before your first pay run in Zoho Payroll. If you skip this, later payslips, FPS submissions, and P60s can show incomplete totals.
RTI
RTI stands for Real Time Information. It is HMRC’s system for receiving payroll data each time you pay employees, rather than only at the end of the year.
The two RTI reports you will see most often in Zoho Payroll are the FPS (with each pay run) and the EPS (for certain employer-level details).
FPS
FPS stands for Full Payment Submission. It is the RTI report you send to HMRC for a pay run. It includes who you paid, how much, and the tax and National Insurance deducted.
In Zoho Payroll, the FPS is prepared automatically when you approve a pay run. You then submit it from Pay Runs. You do not type the FPS figures manually.
EPS
EPS stands for Employer Payment Summary. It is an RTI report for employer-level information that is not on the FPS, for example:
- You are claiming Employment Allowance
- You are reclaiming statutory payments
- You paid no employees in a tax month
You manage EPS filings in Forms & Filing.
Pay, employees, and records
Pay schedule
A pay schedule is the repeating pattern you use to pay employees: how often (every week, fortnightly, or every month) and on which day.
Once you save it, Zoho Payroll generates each regular pay run from that pattern. You cannot change the schedule after you process the first pay run, so set it carefully. Learn more in Pay Schedule.
Pay run
A pay run is the payroll for one pay period. It brings together each employee’s earnings, deductions, tax, National Insurance, pensions, and net pay for that period.
In Zoho Payroll you review the figures, approve, submit the FPS to HMRC, and record payment. See Pay Runs.
Payslip
A payslip shows an employee what they earned and what was deducted in a pay run: gross pay, tax, National Insurance, pensions, other deductions, and net pay.
Zoho Payroll generates payslips when you process payroll. Employees can download them from the Employee Portal when you enable access. Learn more in Access Payslips.
Gross pay and net pay
Gross pay is pay before tax, National Insurance, and most deductions. Net pay is take-home pay: what the employee actually receives after those amounts are taken.
The pay run and payslip show both. Reports such as Payroll Summary and Employees Pay Summary use the same figures.
Attachment of Earnings
An Attachment of Earnings is an official order to deduct money from an employee’s pay, for example to repay a debt. The deduction continues until the order is satisfied or cancelled.
In Zoho Payroll you record the attachment on the employee, and it is taken in pay runs. You can review totals in the Attachment of Earnings Summary.
P60
A P60 is the end-of-year summary of an employee’s pay and deductions for the tax year. Employees often need it for tax returns, mortgages, or benefits claims.
When documents are available, employees can open them in the Employee Portal.
Pensions and benefits
Workplace pension
A workplace pension is a retirement savings scheme you provide as an employer. Under automatic enrolment, most employers must assess their workforce and enrol eligible employees into a qualifying scheme, then pay contributions regularly.
In Zoho Payroll, the Pensions module is where you connect a provider, set contribution groups, and calculate contributions in each pay run.
Benefit in Kind (BiK)
A Benefit in Kind is a non-cash benefit you give an employee, such as a company car or private medical insurance. Some benefits are taxable and must be reported to HMRC, often on a P11D.
You record Benefit in Kind on the employee. Totals appear in pay and in the Benefits in Kind Summary.
P11D
A P11D is the form used to report certain Benefits in Kind and expenses to HMRC for the tax year.
When Zoho Payroll generates these documents, employees can view them in the Employee Portal. Learn more about recording benefits when you add employees.