Your Annual Year-End Payroll Processes and Checklist

Managing year-end payroll can feel like a juggling act, especially for HR, finance, and payroll teams working against tight deadlines and strict HMRC requirements. A smooth year-end ensures accurate reporting, compliant submissions, and a confident start to the new tax year.

This guide walks you through each essential step of the UK payroll year-end process, supported by a practical checklist and preparation tips. Whether you're managing payroll in-house or partnering with a payroll provider like Payroll Solution Services, these insights will help you stay organised, avoid errors, and meet every deadline with confidence.

Payroll year-end is the process of finalising all pay and deduction records for the tax year, submitting required reports to HMRC, and preparing statutory documents for your team members.

It’s also a valuable opportunity to review your payroll processes, ensure your data is fully up-to-date, and implement improvements for the year ahead.

A successful year-end hinges on three things:

• Accurate employee data
• Accurate financial records
• Timely FPS, EPS, and other filings

Get these right, and the transition into the new tax year runs far more smoothly.

Key year-end payroll dates

While dates can vary slightly year to year, the following deadlines remain consistent:

More than a compulsory compliance exercise, year-end payroll is your opportunity to bring the entire year’s pay records together, correct any inconsistencies, and start the new tax cycle with complete clarity. 

Below is a clearer, more detailed walkthrough of the key processes HR, finance, and payroll teams must complete before the tax year closes.

1. Get your team member records up to date

Year-end begins with making sure your workforce data is accurate and complete. Payroll calculations are only ever as reliable as the information behind them, so this is your chance to tidy up any changes that naturally occur throughout the year.

This includes reviewing personal details such as full legal names, home addresses, and National Insurance numbers, essential for accurate reporting to HMRC. It also means checking employment information:

• starter and leaver records
• contract changes
• working pattern updates
• adjustments to pay, bonuses, and overtime.

Student loan statuses, postgraduate loan requirements, and tax codes can also change mid-year, so confirming those details now reduces the risk of discrepancies that lead to employee queries or HMRC corrections later. 

If your business provides Benefits in Kind, ensure these have all been logged and categorised correctly, ready for reporting in the next steps.

2. Deliver your final full payment submission (FPS)

Your Full Payment Submission is the central report that tells HMRC exactly what each employee has been paid in the tax year. For your final FPS of the year, accuracy is crucial as this submission captures every employee’s year-to-date pay, tax deductions, National Insurance contributions, statutory payments such as maternity or sick pay, and any student loan amounts withheld.

This submission must be sent on or before your final payroll run of the tax year. Many payroll systems require you to mark this FPS as the ‘final submission’, signalling to HMRC that you have completed your payroll reporting for the year.

3. Provide your final employer payment summary (EPS)

While the FPS reports employee payroll information, the Employer Payment Summary deals with the employer's year-end adjustments. 

Not every business needs to submit an EPS, but if your organisation claims statutory payments (such as maternity pay recovery), employment allowance, or has Construction Industry Scheme (CIS) deductions to report, the EPS becomes a vital part of your year-end process.

This submission is also where you report any adjustments to tax due or confirm if you haven’t paid any employees in the final reporting period. The final EPS of the year must reach HMRC by 19 April and needs to include your organisation’s official year-end declaration.

Completing this ensures HMRC has a full picture of what you owe, and what reliefs or allowances apply to you as an employer.

4. Prepare company-wide P60s and send them out

A P60 provides a complete summary of their total pay and tax deductions for the tax year, including how much income tax and National Insurance they’ve paid. It’s one of the most important documents your employees will receive each year.

Every employee who is still working for you on the final day of the tax year must receive a P60 by 31 May. These documents are often needed for mortgage applications, rental checks, tax credit claims, and other personal admin, so accuracy and clarity matter.

Producing and distributing P60s is compulsory, but prompt issuing also helps build trust, reduces the likelihood of employee queries, and ensures your duty as an employer is fully met.

5. Round up and report expenses and benefits

If your business offers any taxable benefits, such as company vehicles, private healthcare, interest-free loans, or reimbursed expenses, these need to be declared to HMRC at year-end.

How you report them depends on your internal processes and the nature of the benefits you provide.

P11Ds

If you use P11Ds, each employee who received a Benefit in Kind will require their own form. The P11D outlines exactly what benefit they received and its taxable value. You must give employees their copy so they can check the information matches their expectations and records.

P11D(b)s

If you use a P11D(b), you’re reporting the total value of all Benefits in Kind your organisation has provided that year. This form also confirms the amount of Class 1A National Insurance due on those benefits. The filing deadline is 6 July, and payment of Class 1A NI must reach HMRC by 22 July if paying electronically.

Accurately reporting benefits ensures your organisation stays compliant and avoids penalties, while giving your employees full transparency about the value of the non-cash rewards they received.

6. Establish National Insurance for company directions

Unlike typical employees, company directors have their National Insurance calculated differently. Most directors follow the annual earnings period method, where their contributions accumulate and adjust across the whole tax year rather than pay period by pay period.

At year-end, your responsibility is to review how each director’s NI has been calculated, and correct any discrepancies before you make your final submissions. 

For businesses that have switched directors between methods mid-year or introduced new directors partway through, this check becomes especially important.

7. Submit your monthly Pay As You Earn (PAYE) Payment

After completing your FPS and EPS submissions, you’ll need to ensure the final PAYE payment for the tax year is sent to HMRC. This payment covers all PAYE tax, National Insurance contributions, student loan deductions, and other statutory payments collected throughout the year.

Most organisations pay monthly, and the deadlines remain the same at year-end:

• electronic payments are due by the 22nd
• postal payments must arrive by the 19th

The final payment must reflect any corrections or adjustments identified during your year-end review. Getting this right closes the year on a clean accounting slate.

8. Check for an HMRC updates

Finally, before you process your first payroll of the new tax year, take some time to review HMRC updates. Each year brings changes to tax codes, calculation thresholds, statutory rates, and repayment bands for student loans.

These updates influence how your payroll operates from the very first payslip of the new tax year. Ensuring your systems and processes are aligned not only avoids errors but also builds confidence among employees — who rely on accurate pay from day one.

Before you run your first payroll of the new tax year, it’s important to review the latest P9X document issued by HMRC. This guidance explains how to update or uplift tax codes — particularly for employees with codes ending in “L”, which indicate eligibility for the standard tax-free Personal Allowance.

HMRC may send you updated tax codes for specific team members, but even if no changes are issued, you should still check whether the standard Personal Allowance has been revised for the new tax year. If it has, you’ll need to ensure your payroll system applies the correct adjustments.

In cases where team members’ tax codes are carried over unchanged, make sure to remove any Week 1/Month 1 markers from their records. Clearing this indicator ensures payroll operates on a cumulative basis again, preventing incorrect tax calculations as the new year begins.

Assess department capacity and resource needs

Finally, it’s worth considering whether your internal resources are still capable of meeting your organisation’s payroll needs. If your team is already at capacity, or if compliance changes are becoming more time-consuming to manage, outsourcing payroll can bring both reassurance and efficiency. 

A specialist provider like Payroll Solution Services gives you direct access to expert support, ensures every process remains compliant, and frees up your internal teams to focus on strategic HR or financial priorities.

Year-end can place a heavy administrative burden on busy HR and finance teams. At Payroll Solution Services, we take that weight off your shoulders with accurate, dependable, and fully compliant payroll support.

Our specialists stay ahead of HMRC reporting and changes, manage all essential submissions, and handle even complex payroll scenarios, giving you complete peace of mind as you close out the tax year and prepare for the next.

If you’d like support with your payroll year-end, or want to explore outsourcing your payroll entirely, we’re here to help.

Discover our affordable payroll services for large enterprise, payroll bureau, and Construction Industry Scheme (CIS), and get in touch with our friendly payroll experts today to discuss your requirements.