Abbreviations and Terminology for UK Payroll

Some terminology or abbreviations might not be familiar to audiences outside of the UK who might have to work with UK payroll, including implementation consultants and support users.

Common terminology related to UK payroll
Abbreviation or Term	Definition
AEO	Attachment of Earnings Order. An official form issued to an employer by the court instructing them to deduct an outstanding debt from an employee directly from their wages. Attachments can be issued for a number of reasons, including unpaid fines and child support. There are two types of orders: priority and non-priority orders.
Arrestment	Also known as an earning arrestment, is the arrestment of sums of money, payable by an employer, of an employee’s earnings or money held in a bank/building society account. Other jurisdictions might refer to this as a garnishment or attachment of earnings. Arrestment orders are generally issued by HMCS.
AWE	Average Weekly Earnings. An amount used to determine whether the employee earns above the LEL defined by UK legislation.
BACS	Bankers' Automated Clearing Services, now referred to as Bacs Payment Schemes Limited (Bacs).
CAPS	Centralised Attachment of Earnings Payments. A potential payee for arrestments (or attachment of earnings, which are payroll deductions for unpaid maintenance payments or county court judgments, for example.
CIS	Construction Industry Scheme. If you’re a limited company that has had CIS deductions made from payments received for work in the construction industry, enter the total amount of CIS deductions suffered year to date
CMED	Child Maintenance Enforcement Division (Northern Ireland).
CSA	Child Support Agency, which handles existing cases opened with the Child Maintenance Service.
C2W	Cycle to Work. The Cycle to Work Scheme (also Cyclescheme) is an employee salary sacrifice benefit for employees to hire and purchase tax-free bicycles for work.
DACT	Detailed Automatic Credit Transfer
DEA	Direct Earnings Attachment. Deduction of benefit overpayments from an employee’s pay for amounts that an employee owes to the Department for Work and Pensions (DWP). Unlike AEOs, DEAs aren’t issued by HMCS.
DEO	Deduction from Earnings Order. An order sent by Child Maintenance Service or the Child Support Agency (CSA) for collecting child maintenance directly from a paying parent’s earnings or pension.
DER	Deduction from Earnings Request
Director	A director, or company director, has different rights and responsibilities than employees. Directors run limited companies on behalf of shareholders and are, for taxation purposes, classed as office holders, or persons appointed to a job assignment by an organization but who do not have contracts or receive regular payment (see the office holder). In some organizations, appointed office holders can also have an employment contract that meets the criteria for employees. For additional details, see https://www.gov.uk/employment-status.
DPS	Data Provisioning Service. The means by which HMRC sends PAYE notices and reminders to employers online.
DWP	Department of Work and Pensions
EA	Earnings Arrestment
EPS	Employer Payment Summary. EPS must be run and sent to HMRC by the 19th of the month after the FPS is submitted. Corrections can be filed.
EYU	Earlier Year Update. Used to correct EPS and FPS that shows the difference between what you originally reported and the correct figure.
FPS	Full Payment Submission. Used to tell HMRC about payments to your employees and what deductions you’ve made.
GNS	Generic Notification Services. Messages that let employers know that late filing penalties might apply, or that student loan deductions weren't made. Employers can access these messages in PAYE Online Services.
HMRC	His Majesty’s Revenue & Customs, written as HM Revenue and Customs.
IR35	Off-payroll working rules that apply to contractor-type employees.
LEL	Lower Earnings Limit. The total pay at £120 a week (£520 a month) or over (2020 to 2021). Don’t include any smaller payments, even if you’re not required to report it for tax.
Linked PIWs	Linked Period of Incapacity for Work. A series of two or more PIWs that are connected by a span of eight weeks or less. See "Statutory Sick Pay (SSP): employer guide" and "Statutory Sick Pay: manually calculate your employee’s payments" on www.gov.uk.
NDR	Normal Deduction Rate. The amount that an employer must withhold from an employee’s wages for an AEO.
NI	National Insurance. Taxes paid by British employees and employers to fund government benefits programs, including state pensions. The contributions are made through payroll deductions. For information on classes and State Pension age, see https://www.gov.uk/national-insurance.
NI-able	Sometimes written as NIable or niable, used to indicate whether an earning is subject to National Insurance withholding.
NIC	National Insurance contributions. See NI.
National Insurance Number	Number uniquely identifying a person for National Insurance contributions and tax purposes. Can be found on an employee’s payslip, P60, letters about tax, pension, or benefits, and in the National Insurance section of an employee’s personal tax account. A National Insurance number is made up of two letters, six numbers and a final letter, which is always A, B, C, or D.
NRP	Non-Resident Parent
NVR	Number Verification Request. Verification of a new employee’s National Insurance Number.
PAYE	Pay As You Earn. HM Revenue and Customs’ system to collect Income Tax and National Insurance from employment.
Office Holder	Generally, an office holder is a person appointed to a role by a company or organization who doesn’t have a contract or receive regular payment. In some cases, an office holder can also have a contract with the same company or organization that meets the criteria for employees. Also, office holders are sometimes directors. See the Director entry for more information. For additional details, see https://www.gov.uk/employment-status.
Payslip	Provided on or before payday, payslips show earnings before and after deductions, and the amount of any deductions that might change each time an employee is paid (for example, tax and National Insurance). The equivalent North American term is earning statement.
PEP	Protected Earnings Proportion
PER	Protected Earnings Rate. The minimum amount an employee must be able to take home if the employer is withholding amounts from the employee’s wages for an AEO.
Personal Allowance	The amount of income employees don’t have to pay tax on. This amount can change, depending on several factors. See https://www.gov.uk/income-tax-rates.
PIW	Period of Incapacity for Work. A period lasting four days or more in which the employee is too sick to work. This includes workdays, but can also include non-workdays, weekends, and bank holidays. For example, if an employee regularly works Monday to Friday, it's possible for their PIW to start on the weekend.
Plan Type	The income threshold that the application uses to calculate statutory student loan deductions. An employee's plan type depends on factors such as when they applied for loans and where they lived when they applied.
PSA	PAYE Settlement Agreement. Allows employers to make an annual payment to cover all of the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees. Additional information and guidance are available at https://www.gov.uk/paye-settlement-agreements.
PT	Primary Threshold. An amount set each year by the government that triggers liability for an employee to pay National insurance contributions.
P11D	Form submitted by employers to report end-of-year expenses and benefits for employees and directors.
P11D(b)	Form submitted by employers to report Class 1A National Insurance contributions on expenses and benefits and to declare that you've sent form P11D to HMRC.
P45	Provided to employees by employers when the employee stops working for the employer, or when the employee requests it. Indicates how much tax the employee has paid on wages in a given fiscal year (6 April to 5 April). The P45 is also used by an employer to determine how much tax an employee must pay on wages.
P6	A tax code change notice sent to employers if an employee’s tax code changes during the year (for example, if their personal allowance goes up or down or if they start or stop receiving a taxable benefit). Used in the UK Tax Info section of the Payroll > Tax Definitions screen in the People feature.
P6B	Individual budget code changes: electronic only. This message is used for in-year code changes issued in bulk as a result of the budget. Used in the UK Tax Info section of the Payroll > Tax Definitions screen in the People feature.
P60	Employers give a P60 to all employees on the payroll on the last day of the tax year (5 April), and no later than 31 May. The P60 provides a summary for employees of their total pay and deductions for the year.
P9	Individual code changes that come into force in the next tax year. Used in the UK Tax Info section of the Payroll > Tax Definitions screen in the People feature.
QD	Qualifying Day. Days for which an employee is eligible to receive statutory pay.
RTI	Real Time Information. System by which employers and pension providers send PAYE information to HMRC each time they pay their employees, rather than after the end of the tax year.
Salary Sacrifice	An agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit. See Configure Salary Sacrifice for UK Allowances.
SAP	Statutory Adoption Pay. Employers can report how much statutory adoption pay they have claimed and can report how much NIC compensation has been recovered through Small Employers’ Relief.
SCON	Scheme Contracted Out Number. Used if an employer runs a contracted-out workplace pension scheme and the employee’s National Insurance category letter is D, E, I, K, L, N, O or V. You can find your SCON on your contracting-out certificate or from your pension provider.
ShPP	Statutory Shared Parental Pay. Employers can report how much ShPP they have claimed and can report how much NIC compensation has been recovered through Small Employers’ Relief.
SLC	Student Loans Company
SMP	Statutory Maternity Pay. Employers can report how much statutory maternity pay they have claimed and can report how much NIC compensation has been recovered through Small Employers’ Relief.
SPP	Statutory Paternity Pay. Employers can report how much statutory paternity pay they have claimed and can report how much NIC compensation has been recovered through Small Employers’ Relief.
ST	Secondary Threshold
Tax Band	The tax band corresponds with a range of income that is subject to a certain tax rate percentage that changes as the band changes, which determines the rate of taxation on income. For more information, see https://www.gov.uk/income-tax-rates.
UAP	Upper Accrual Point. Employees with a contracted-out pension pay a lower rate of National Insurance up to this point.
UEL	Upper Earnings Limit. All employees pay a lower rate of National Insurance above this point.
WD	Waiting Days. The first three QDs during a PIW, during which an employee is not eligible to receive SPP.