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PAYE, or Pay As You Earn, is a payroll tax collection system used to deduct income tax and National Insurance contributions from employees' wages before payment. In the United Kingdom, PAYE is administered by HM Revenue and Customs (HMRC). The system aims to ensure that tax is collected gradually as income is earned, reducing the need for large end‑year settlements.

Under PAYE, employers use payroll software to apply the employee's tax code, determine applicable tax bands and NIC rates, and withhold the correct amounts from gross pay. Real Time Information (RTI) reporting to HMRC occurs with each payroll run, providing details of pay, tax, NICs, and other deductions. The employee receives a payslip showing gross pay, taxable income, deductions, and net pay.

End‑of‑year documents include the P60, which summarizes pay and deductions for the tax year, and the P45 if the employee leaves a job. Benefits in kind may be reported on a P11D form. Some individuals with additional untaxed income or complex affairs may still need to complete self‑assessment tax returns, though many under PAYE do not.

PAYE is used in other countries under similar names and concepts, though rules differ by jurisdiction. The system provides regular, payroll‑based tax collection and helps align tax with earnings on a pay‑as‑you‑go basis; it also relies on accurate coding and timely reporting to avoid under- or over‑payment of tax.