What an Employer Payment Summary is and when to send one
Eligible employers can cut their annual National Insurance bill by up to £10,500, and small employers can reclaim 109% of the statutory parental pay they hand out [1][2]. Both of those reductions are claimed through the same return, the Employer Payment Summary, and both are lost if that return misses the 19th of the month [3]. For a business paying out maternity or adoption pay, the difference between filing and forgetting can run to thousands of pounds.
The Employer Payment Summary, usually shortened to EPS, is the second of the two Real Time Information returns an employer sends to HMRC. Where the Full Payment Submission reports what employees were paid, the EPS reports the adjustments that reduce what the employer owes HMRC, along with the months in which no one was paid at all.
This article sets out exactly when an EPS is required, how each type of claim works, what happens in a month with no payroll, and how a late or missing EPS is penalised. The rules apply to every UK employer operating PAYE, but they matter most to the businesses claiming reliefs, because those are the businesses leaving money on the table when the return is skipped.
Key takeaways
- The EPS reports reductions to what an employer owes HMRC, and is sent alongside or instead of the Full Payment Submission [3].
- It must reach HMRC by the 19th of the following tax month for the reduction to apply to the amount due [3].
- Employers reclaim 92% of most statutory parental payments, or 109% if they qualify for Small Employers' Relief [2].
- The Employment Allowance, worth up to £10,500 for the 2026-27 tax year, is claimed once a year through the EPS [1].
- In a tax month with no payments, the employer sends an EPS instead of an FPS to avoid a specified charge and penalty [3].
What an Employer Payment Summary is
How the EPS differs from the FPS
The two RTI returns do opposite jobs. The Full Payment Submission tells HMRC what each employee was paid and what was deducted, and it goes on or before every payday [4]. The EPS works in the other direction, telling HMRC about amounts that reduce the employer's bill or about a month with no pay at all [3]. Where the Full Payment Submission is a near-constant of payroll life, the EPS is occasional and conditional.
The distinction matters because the FPS cannot carry a reduction. When an employer reclaims statutory pay or claims the Employment Allowance, the FPS still reports the gross figures, and the EPS is what tells HMRC to lower the net amount owed [3]. Sending an FPS without the matching EPS means paying HMRC the full liability and forgoing the relief for that month [2].
The EPS deadline and the payment cycle
The EPS is bound to the same monthly PAYE cycle as everything else in RTI. The tax month runs from the 6th to the 5th, and the EPS must reach HMRC by the 19th of the following tax month for the reduction to be applied to that month's bill [3]. After sending, the employer can view the claim and the revised balance in the online PAYE account within two days, or by the 14th if the EPS went before the 11th [3].
Payment itself follows the standard deadline: HMRC must be paid by the 22nd electronically, or the 19th by post [5]. The table below shows how the EPS slots into the month.
| Point in the cycle | EPS action |
|---|---|
| Tax month | Runs from the 6th to the 5th [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| By the 19th of the next month | Send the EPS so the reduction applies [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| Within 2 days (or by the 14th) | View the revised balance in the PAYE account [[3]](https://www.gov.uk/running-payroll/reporting-to-hmrc-eps) |
| By the 22nd of the next month | Pay HMRC the net amount (19th if by post) [[5]](https://www.gov.uk/running-payroll/paying-hmrc) |
Because the timing window is tight, the reduction is easy to miss when payroll is handled by hand. HMRC-recognised payroll software for SMEs tracks which months need an EPS and files it inside the deadline, so a maternity reclaim or an allowance claim is not lost to a diary slip.
When an employer must send an EPS
Reclaiming statutory parental pay
The most common reason to send an EPS is to reclaim statutory parental payments. Employers can usually recover 92% of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay [2]. The claim is made by including the recovered amount on the EPS [3].
Smaller employers recover more. A business that qualifies for Small Employers' Relief, meaning it paid £45,000 or less in Class 1 National Insurance in the relevant year, can reclaim 100% of those statutory payments plus a further 9% compensation, a total of 109% [2]. The 9% is meant to offset the employer National Insurance paid on the statutory sums.
| Employer type | Reclaim rate on statutory parental pay |
|---|---|
| Standard employer | 92% [[2]](https://www.gov.uk/recover-statutory-payments) |
| Qualifies for Small Employers' Relief | 109% (100% plus 9% compensation) [[2]](https://www.gov.uk/recover-statutory-payments) |
A worked example shows the scale of the difference. Suppose a business pays £6,000 of Statutory Maternity Pay across an employee's leave. A standard employer reclaims 92%, recovering £5,520 through the EPS, and carries the remaining £480 as a cost [2]. A business qualifying for Small Employers' Relief reclaims 109% on the same £6,000, recovering £6,540, which covers the payment in full and adds £540 of compensation towards the employer National Insurance paid on it [2]. The only thing standing between the employer and that recovery is an EPS filed by the 19th.
An employer that cannot afford to make the statutory payments upfront can apply to HMRC for an advance, and the EPS is still used to account for the sums even where an advance was received [6]. Note that Statutory Sick Pay is not on this list, because the relief that once allowed employers to recover it no longer exists, so an EPS does not reclaim SSP [2].
Claiming the Employment Allowance
The Employment Allowance reduces an employer's Class 1 National Insurance liability by up to £10,500 for the 2026-27 tax year [1]. It is not paid as a lump sum. Instead the employer pays less employer National Insurance each pay run until the allowance is used up or the tax year ends [1]. Because the allowance offsets employer National Insurance, it interacts directly with how employer National Insurance is calculated.
Claiming is a single action. The employer sets the Employment Allowance indicator to 'Yes' on the next EPS, and the claim then runs for the rest of the year [7]. Not every employer qualifies, and the exclusions are specific. A company whose only employee paid above the secondary threshold is a single director cannot claim, nor can a business doing more than half its work in the public sector unless it is a charity, and earnings within the off-payroll working rules cannot be counted towards the claim [8].
CIS deductions and the Apprenticeship Levy
Two further situations require an EPS, both affecting particular kinds of business. A limited company working as a subcontractor under the Construction Industry Scheme can have deductions taken from its payments by contractors, and it reclaims those deductions through the EPS against its own PAYE liabilities [9]. This is a frequent EPS trigger for construction businesses, and it sits alongside the wider mechanics of payroll under the Construction Industry Scheme.
The Apprenticeship Levy is the other. An employer, or a group of connected employers, with an annual pay bill above £3,000,000 pays the levy and reports it through the EPS [10]. The reporting is monthly and cumulative across the year, which means the EPS carries the running levy figure even in months where no other adjustment applies. Larger and multi-entity employers handling this often do so through an HMRC-recognised payroll API that calculates the levy and populates the EPS automatically.
Sending an EPS when no employees are paid
The nil EPS
An EPS is not only for claims. When an employer runs payroll but pays no one in a tax month, it must not send an FPS. Instead it sends an EPS to tell HMRC that no payments were made, by the 19th of the following month [3]. This is often called a nil EPS or a no-payment EPS.
Skipping it is costly. If HMRC receives neither an FPS nor a nil EPS, it may issue a notice through PAYE Online, estimate the amount it thinks is due as a specified charge, and add a penalty [3]. A specified charge does not disappear on its own, so the nil EPS is the simplest way to keep a quiet month from turning into an estimated bill [11].
Periods of inactivity
Where an employer knows in advance that no one will be paid for a stretch, it can report the gap ahead of time rather than filing a nil EPS every month. The EPS carries 'Period of inactivity' fields, into which the employer enters the start and end dates of a break of between one and twelve months [3].
Declaring the period keeps the PAYE scheme open and stops HMRC chasing missing submissions for those months [3]. It suits seasonal businesses and dormant companies that expect to run payroll again later. A payroll bureau managing many client schemes uses inactivity periods to manage clients that pause payroll, so the bureau is not filing nil returns by hand across dozens of schemes each month.
Getting the EPS right
Correcting a mistake
An EPS error is fixed by sending a corrected EPS as soon as the mistake is found [12]. Unlike the FPS, which corrects through year-to-date totals on the individual employee record, the EPS carries scheme-level figures such as recovered statutory pay and the levy, so the corrected return restates those figures for the period [12].
Timing still matters after a correction. If the corrected EPS restores a reduction that was understated, the adjustment applies once HMRC processes it, and the online PAYE account will show the revised balance [3]. Getting the original EPS right the first time avoids the lag, which is why the recovered amounts and the allowance indicator should be checked before the return goes rather than after.
What a late or missing EPS costs
A missing EPS is treated the same way as a missing FPS. HMRC can raise a specified charge based on its estimate of the liability, and it can charge a penalty for the failure to report [11]. The penalty scale runs from £100 to £400 a month depending on how many employees are in the scheme [11].
The subtler cost is the lost relief. A statutory pay reclaim or an Employment Allowance claim submitted after the 19th does not reduce that month's bill, so the employer pays the full amount and waits for the adjustment to catch up [3]. Across a year of maternity pay or a full £10,500 allowance, repeated late EPS filing turns a cash-flow benefit into a cash-flow problem [1].
Conclusion
The Employer Payment Summary is the return that puts money back into the business, which is exactly why it deserves the same discipline as the return that reports pay. Statutory reclaims, the Employment Allowance, CIS repayments and the levy all flow through this one channel, and each of them has a deadline that quietly forfeits the benefit when it passes.
The practical takeaway is that the EPS should never be an afterthought bolted onto the pay run. When payroll automatically flags the months that need an EPS, populates the recovered amounts and files inside the window, the reliefs land when they are meant to and the quiet months stay quiet. That turns the EPS from a compliance risk into what it is designed to be, a mechanism for paying HMRC no more than the law actually requires.
Frequently asked questions
Does every employer need to send an Employer Payment Summary?
No. An employer only needs an EPS when it has something to report to HMRC that the FPS cannot carry, such as reclaiming statutory pay, claiming the Employment Allowance, reporting CIS deductions or the Apprenticeship Levy, or telling HMRC that no employees were paid in a month [3]. An employer with none of those situations in a given month sends only the FPS [4].
How often is the Employment Allowance claimed?
Once per tax year. The employer sets the Employment Allowance indicator to 'Yes' on an EPS, and the claim then runs for the rest of that tax year until the £10,500 is used up or the year ends [7]. The claim does not carry over automatically, so it has to be made again at the start of each new tax year [1].
Can an employer reclaim Statutory Sick Pay through the EPS?
No. The percentage reclaim through the EPS covers statutory parental payments such as maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay [2]. Statutory Sick Pay is not recoverable, because the relief that previously allowed employers to reclaim a portion of it was withdrawn, so SSP stays a full cost to the employer [2].
What happens if an employer forgets the nil EPS in a no-pay month?
HMRC may send a notice through PAYE Online, estimate what it thinks is owed as a specified charge, and add a penalty [3]. The specified charge does not clear itself, so the employer should send the nil EPS for the month to correct the record, or use the online service to tell HMRC no payment is due [13].
