Quarterly PAYE payments: when a small employer can pay HMRC every three months

Most employers pay PAYE and National Insurance to HMRC monthly, but an employer that reasonably expects average monthly payments below £1,500 can pay quarterly. Quarterly payment reduces banking frequency, but it also means the business must hold three months of payroll-tax cash without spending it.

Quarterly payment is available below an average £1,500 monthly liability

HMRC's September 2026 PAYE manuals say employers with reasonable grounds to believe their average monthly PAYE payment over the full tax year will be below £1,500 can pay quarterly. That is less than £18,000 across the year.

All employers can pay monthly, so quarterly treatment is optional where the threshold is met. A business expecting rapid hiring may prefer monthly payment even while technically small enough to pay quarterly.

Electronic quarterly payments are due on 22 July, October, January and April

HMRC's current payment-frequency table says quarterly electronic payments for the periods ending 5 July, 5 October, 5 January and 5 April are due by the 22nd of the same month. Cheque deadlines are the 19th.

Put all four dates into the payroll calendar. The January quarter can be especially easy to overlook because it falls shortly after year-end holidays.

Reserve the tax every payroll even though the bank payment is quarterly

Do not treat the money as free cash for the first two months of the quarter. Post PAYE, employee NIC and employer NIC liabilities as payroll runs and move an internal cash reserve if needed.

If the quarter will total £3,600, management should see that £3,600 as committed HMRC cash before the due date. The bank balance can otherwise look healthier than the company's real free liquidity.

Move to monthly payment if expected liability rises above the threshold

HMRC says employers should pay monthly when payments exceed £1,500 per month or £18,000 a year. If headcount or wages rise materially, update the payment frequency rather than continuing quarterly by habit.

Keep a forecast using expected employer NIC, PAYE and other payroll amounts. A company that crosses the threshold mid-year should contact HMRC or adjust its payment pattern as appropriate.

Tell HMRC when there is nothing to pay

HMRC's manuals say employers should declare periods where there is nothing to pay so unnecessary reminders are not generated. Irregular or director-only payrolls can otherwise appear overdue even where no deductions arose.

Coordinate the Employer Payment Summary or other required reporting with the banking calendar. A missing bank payment and a genuine nil period are not the same event.

Reconcile three payroll months into one HMRC payment

Before the quarterly transfer, total the monthly liabilities, EPS adjustments and any CIS amounts included in the PAYE/CIS scheme. The bank payment should equal the quarter's net HMRC liability.

Keep a month-by-month bridge. If HMRC later queries the quarter, finance can show exactly how July's payment was built from April, May and June payroll rather than trying to recreate it from one bank debit.

Worked example: an employer expects PAYE and NIC of £1,200 per month. Over a quarter that builds to roughly £3,600, due electronically by the 22nd after quarter end. If the company spends that £3,600 during the quarter because the money remains in the current account, the quarterly option has made cash control worse rather than easier.

Keep a monthly internal PAYE control even while paying quarterly. That lets management see how much of the bank balance already belongs to HMRC and makes it easier to switch to monthly payment if wages or headcount increase above the threshold.

When a business has both PAYE and CIS in one scheme, include the CIS deductions in the same quarterly affordability review. The legal payment frequency should be confirmed with HMRC where the combined liability changes the expected average.

Before choosing quarterly payment, compare the administrative saving with the behavioural risk of holding tax cash for longer. Some very small employers prefer monthly payment precisely because it removes the temptation to use HMRC money as working capital. The legally available option is not always the best treasury choice.

At each quarter end, reconcile FPS submissions, EPS adjustments and the PAYE account before paying. A quarterly employer has three times as many payroll periods inside one bank payment, so a small error repeated each month can become a larger difference by the time HMRC is paid.